NOTE 6 – CONVERTIBLE NOTES

At October 31, 2018 and July 31, 2018, convertible note consisted of the following:

	October 31,			July 31,
	2018			2018
	(Unaudited)
Convertible promissory notes outstanding	$	417,498		$	500,000
Less discount		(294,768	)		(417,330	)
Liability component as at date of issue		122,730			82,670
Accrued interest		13,993			8,268
Liability component	$	136,723		$	90,938

On March 20, 2018, the Company entered into a note purchase agreement with a non-affiliated party pursuant to which the purchaser would lend the Company a total of $500,000, for which the Company would issue two-year 5% convertible notes. The notes are convertible into common stock of the Company at $0.02 per share. The Company agreed to grant the lender a security interest in equipment which is purchased from the proceeds of the notes. As of October 31, 2018, the Company had received $500,000 pursuant to the note purchase agreement and issued its convertible notes in the principal amount of $500,000.

Interest of 5% is payable annually until the settlement date. No interest has been paid during the three months ended October 31, 2018.

On September 10, 2018, the holder of the convertible note converted $82,502 of the principal amount of the note into 4,125,100 shares of common stock.