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Loans and Promissory Notes
9 Months Ended
Mar. 31, 2017
Debt Disclosure [Abstract]  
Loans and Promissory Notes

NOTE 9 – LOANS AND PROMISSORY NOTES

 

SHORT TERM NOTES PAYABLE:

 

As of March 31, 2017 and June 30, 2016, the Company had short-term notes payable amounting to $614,390 and $673,660 with accrued interest of $2,829,429 and $2,879,655, respectively. These notes bear interest rates ranging from 6% to 36% per annum.

 

CONVERTIBLE PROMISSORY NOTES:

 

On February 29, 2016, the Company issued a convertible promissory note in the amount of $56,750 to Auctus Fund, LLC, a Delaware limited liability company. This convertible note is due and payable on November 29, 2016 with interest of 10% per annum. This note is convertible at the election of Auctus Fund, LLC from time to time after the issuance date. In the event of default, the amount of principal and interest not paid when due bear interest at the rate of 24% per annum and the note becomes immediately due and payable. Should an event of default occur, the Company is liable to pay 150% of the then outstanding principal and interest. The note agreement contains covenants requiring Auctus Fund’s written consent for certain activities not in existence or not committed to by the Company on the issuance date of the note, as follows: dividend distributions in cash or shares, stock repurchases, borrowings, sale of assets, certain advances and loans in excess of $100,000, and certain guarantees with respect to preservation of existence of the Company and non-circumvention. Outstanding note principal and interest accrued thereon can be converted in whole, or in part, at any time by Asher after the issuance date into an equivalent of the Company’s common stock determined by 55% of the average of the two lowest closing trading prices of the Company’s common stock during the twenty (20) trading days prior to the date the of the note. The Company may prepay the amounts outstanding to Auctus Fund at any time up to the 180th day following the issue date of this note by making a payment to the note holder of an amount in cash equal to 125% to 150%, multiplied by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note plus (y) Default Interest, depending on the time of prepayment. On August 30, 2016, Auctus Fund, LLC converted the principal amount of $56,750 and $2,829.76 in accrued interest, totaling $59,579.76, into 529,598 shares of free-trading stock of the Company. This note was paid in full as of August 30, 2016.

 

On July 20, 2016, the Company issued a convertible promissory note in the amount of $50,000 to EMA Financial, LLC, a Delaware limited liability company. The note has a coupon rate of 10%, matures in one year and is convertible to Common Stock of the Company at a conversion price equals the lower of: (i) the closing sale price of the Common Stock on the Principal Market on the Trading immediately preceding the Closing Date of this note, and (ii) 55% of the lowest sale price for the Common Stock on the Principal Market during the twenty (20) consecutive Trading Days immediately preceding the Conversion Date. The note may be prepaid at 130% - 145% of outstanding principal and interest up to 180 days. This note was paid in full as of March 08, 2017.

 

On August 16, 2016, the Company issued a convertible promissory note in the amount of $56,750 to Auctus Fund, LLC, a Delaware limited liability company. The note has a coupon rate of 10%, matures on May 16, 2017 and is convertible to Common Stock of the Company at a conversion price equals the lower of:

 

(i) 50% multiplied by the average of the two lowest Trading Price during the previous twenty-five Trading Day period ending on the latest complete Trading Date prior to the date of this note and

  

(ii) 50% multiplied by the average of the two lowest Trading Prices for the Common Stock during the twenty-five Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. The note may be prepaid at 135% - 150% of outstanding principal and interest up to 180 days.

 

On December 15, 2016, the Company issued a convertible promissory note in the amount of $32,000 to Power Up Lending Group. The note has a coupon rate of 8%, matures on September 30, 2017 and is convertible (after 180 days) to Common Stock of the Company at a conversion price equals to 58% multiplied by the average of the two lowest trading prices during the previous ten trading day period ending on the latest complete trading date prior to the conversion date; and the note may be prepaid at 150% of outstanding principal and interest up to 180 days.

 

During the quarter ended 3/31/17 the following transactions occurred with respect to convertible promissory notes:

 

On January 30, 2017, EMA Financial, LLC converted $7,010.50 of the principal amount of the convertible promissory note dated July 20, 2016 into 180,000 shares of Common Stock of the Company at the price of $0.038942 per share, leaving a principal balance of $42,989.50.

 

On February 2, 2017, the Company assigned $33,734.68 to JSJ Investments Inc. a portion of the original principal amount and accrued interest of the EMA Financial, LLC convertible promissory note dated July 20, 2016.

 

On February 2, 2017, the Company issued a convertible promissory note in the amount of $33,734.68 to JSJ Investments Inc. for the assignment of a portion of principal amount and accrued interest of the EMA Financial, LL convertible promissory note dated July 20, 2016.

 

On February 2, 2017, the Company issued a convertible promissory note in the amount of $42,000 to JSJ Investments Inc. with an interest rate of 10%, convertible to common stock at 45% discount.

 

On February 6, 2017, JSJ Investments Inc. paid EMA Financial LLC $33,734.68 in connection with the Note Assignment Agreement among the Company, JSJ Investments Inc. and EMA Financial, LL convertible promissory note dated July 20, 2016.

 

On February 6, 2017, the Company paid EMA Financial LLC $25,301.02 for principal, accrued interest and repayment penalty in connection with the EMA Financial, LL convertible promissory note dated July 20, 2016.

 

On February 7, 2017, JS J Investments, Inc. converted $33,734.68 from the Replacement Convertible Note dated February 2, 2017, in connection with the Note Assignment Agreement with EMA Financial, LLC., into 657,169 shares of Common Stock of the Company at the price of $0.5133 per share.

 

On February 9, 2017, E MA Financial, LLC converted $7,200 of the principal amount of the convertible promissory note dated July 20, 2016 into 200,000 shares of Common Stock of the Company at the price of $0.036 per share.

 

On February 23, 2017, the Company issued a new convertible promissory note to Power Up Lending Group for $28,000, with an interest rate of 8% and convertible to Common Stock of the Company at 45% discount.

 

On March 3, 2017, the Company issued a new convertible promissory note to Auctus Fund, LLC for $75,000, with an interest rate of 10% and convertible to Common Stock of the Company at 50% discount.

 

On March 08, 2017, EMA Financial, LLC converted $4,800 of the balance principal amount, $867.78 in accrued interest of the convertible promissory note dated July 20, 2016 and $2,200 for legal fee reimbursements totaling $7,867.78 into 244,340 shares of Common Stock of the Company at the price of $0.0322 per share. This note was paid in full as of March 08, 2017.

 

As of March 31, 2017, the principal balance of the outstanding convertible notes was $233,750 and the value of the derivative liability was $269,565.

 

DUE TO PREFERRED STOCKHOLDERS OF DISCONTINUED OPERATIONS

 

As of March 31, 2017, the Company has classified $215,000 of preferred stock in Providential Securities, Inc., a former subsidiary of the Company that was closed in the year 2000, as a long-term liability payable to holders of preferred stock of this discontinued subsidiary. The Company has made an offer for these preferred stock holders to receive shares of common stock in the Company in exchange for the preferred shares but so far only a small number of the preferred shareholders have accepted the offer.

 

The interest expenses payable to the preferred stockholders of the discontinued subsidiary in the amounts of $432,150 and $413,255 have been included in Accrued Interest Expenses on the balance sheets as of March 31, 2017 and June 30, 2016, respectively.

 

OTHER CURRENT PAYABLE

 

During the fiscal year ended June 30, 2016, the Company received a total 389,400,000 shares of Common Stock of Sports Pouch Beverage Company, Inc. and recognized 292,050,000 shares as earned revenues. The balance of 97,350,000 shares was recorded as Other Current Payable in the Company’s consolidated financial statements as of September 30, 2016. The Company returned these 97,350,000 shares to Sports Pouch Beverage Company on November 2, 2016.

 

ADVANCES FROM CUSTOMERS

 

As of September 30, 2012, the Company decided to reclassify the previously recorded Unearned Revenues as Advances from Customers because the Company has not been able to complete the consulting services for the related clients due to their inability to provide GAAP-compliant audited financial statements in order to file a registration statement with the Securities and Exchange Commission. As of March 31, 2017, the Company recorded $288,219 as Advances from Customers.