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CONVERTIBLE NOTES - RELATED PARTY

6 Months Ended

Jan. 31, 2020

NOTE 6 – CONVERTIBLE NOTES – RELATED PARTY

At January 31, 2020 and July 31, 2019, convertible note consisted of the following:

	January 31,			July 31,
	2020			2019
Convertible promissory notes issued	$	500,000		$	500,000
Less discount		(33,554	)		(162,179	)
Total convertible note		466,446			337,821
Accrued interest		45,870			33,268
Liability component	$	512,316		$	371,089

Pursuant to a note purchase agreement dated March 20, 2018 between the Company and a then non-affiliated lender, the lender made loans to the Company in the total amount of $500,000, for which the Company issued 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 was purchased from the proceeds of the notes. The equipment was not been delivered to the Company. The Company is in default of its obligation to grant the lender a security interest in the inventory. The lender was appointed as a director, chief executive officer, chief financial officer, president and secretary of the Company on August 14, 2019.

Interest of 5% is payable annually until the settlement date. No interest was paid during the six months ended January 31, 2020.