At June 30, 2019 and 2018, convertible loan – related party consisted of the following:

	June 30,		June 30,
	2019		2018
Convertible notes - related party -Issued in fiscal year 2018		-		8,333
Total convertible notes payable		-		8,333

Accrued interest -related party		-		644
Less: Unamortized debt discount - related party		-		-
Total convertible notes		-		8,977

Less: current portion of convertible notes - related party		-		8,977
Long-term convertible notes	$	-	$	-

During the year ended June 30, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $0 and $8,333, respectively.

Conversion

During the year ended June 30, 2019, the Company converted notes with principal amounts and accrued interest of $10,158 into 101,597,905 shares of common stock. The corresponding derivative liability at the date of conversion of $30,479 was settled through additional paid in capital.

Promissory Notes - Issued in fiscal year 2018

During the year ended June 30, 2018, the Company issued a total of $8,333 note with the following terms:

	·	Terms of 6 months.
	·	Annual interest rates of 8%.
	·	Convertible at the option of the holders at issuance.
	·	Conversion prices are typically based on the discounted (45% discount) average closing prices of the Company’s shares during 20 days prior to conversion.

The Company received cash of $8,333. Note is currently in default.

The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.

The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible, including the notes issued in prior years, during the year ended June 30, 2018 amounted to $9,371. $8,333 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $1,038 was recognized as a “day 1” derivative loss.