CONVERTIBLE NOTES - RELATED PARTY

9 Months Ended

Apr. 30, 2020

NOTE 6 – CONVERTIBLE NOTES – RELATED PARTY

At April 30, 2020 and July 31, 2019, convertible note consisted of the following:

	April 30,		July 31,
	2020		2019
Convertible promissory notes issued	$	500,000	$	500,000
Less discount		—		(162,179	)
Total convertible note		500,000		337,821
Accrued interest		54,163		33,268
Liability component	$	554,163	$	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 and the Company did not obtain physical possession of 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 upon the resignation of the Company’s previous sole director and officer.

Interest of 5% is payable annually until the settlement date. The note is currently in default and default interest rate is 12 % per annum. No interest was paid during the nine months ended April 30, 2020.