Convertible Notes and Notes Payable

6 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

CONVERTIBLE NOTES AND NOTES PAYABLE

NOTE 3 – CONVERTIBLE NOTES AND NOTES PAYABLE

Convertible notes and notes payable

Notes payable includes principal and accrued interest and consists of the following at December 31, 2020 and June 30, 2020:

	December 31, 2020		June 30, 2020
(a) Unsecured convertible notes ($19,000 and $18,000 in default)	$	61,000	$	59,000
(b) Notes payable (in default)		431,000		423,000
(c) Notes payable (in default)		27,000		26,000
Total notes-third parties	$	519,000	$	508,000

(a) The notes are unsecured, convertible into common stock at amounts ranging from $0.08 to $0.30 per share, bear interest at rates ranging from 5% to 8% per annum, were due through 2011 and are in default or due on demand.

At June 30, 2020, convertible notes totaled $59,000. During the period ended December 31, 2020, interest of $2,000 was added to the principal, resulting in a balance owed of $61,000 at December 31, 2020. On December 31, 2020, $19,000 of the convertible notes were in default and convertible at a conversion price of $0.30 per share into 62,619 shares of the Company’s common stock. The balance of $42,000 is due on demand and convertible at a conversion price of $0.08 per share into 521,528 shares of the Company’s common stock. 

(b) The notes are either secured by the Company’s intellectual property or unsecured and bear interest ranging from 6.5% to 10% per annum, were due in 2012, and are in default.

At June 30, 2020, the notes totaled $423,000. During the period ended December 31, 2020, interest of $8,000 was added to principal resulting in a balance owed of $431,000 at December 31, 2020. At December 31, 2020, $389,000 of notes are secured by the Company’s intellectual property and $42,000 of notes are unsecured.

(c) The notes are unsecured and bear interest of 4% per annum and were due on March 17, 2020, and are in default.

At June 30, 2020, the notes totaled $26,000. During the period ended December 31, 2020, interest of $1,000 was added to principal resulting in a balance owed of $27,000 at December 31, 2020.

Convertible notes and notes payable-related parties

Notes payable-related parties includes principal and accrued interest and consists of the following at December 31, 2020 and June 30, 2020:

	December 31, 2020		June 30, 2020
(a) Convertible notes- The Matthews Group	$	1,683,000	$	1,560,000
(b) Notes payable- The Matthews Group		3,017,000		2,630,000
(c) Convertible notes-other related parties ($220,000 and $215,000 in default)		301,000		294,000
Total notes-related parties	$	5,001,000	$	4,484,000

(a) The notes are unsecured, convertible into common stock at $0.08 per share, bear interest at rates ranging from 8% to 10% per annum, and are due on demand.

The Matthews Group is a related party (see Note 6) and is owned 50% by Ms. Van Tran, the Company’s CEO/Executive Chair and a director, and 50% by Larry Johanns, a significant shareholder of the Company. At June 30, 2020, convertible notes due to The Matthews Group totaled $1,560,000. During the period ended December 31, 2020, $67,000 of notes payable were issued and interest of $56,000 was added to principal, resulting in a balance owed of $1,683,000 at December 31, 2020. At December 31, 2020, the notes are convertible at a conversion price of $0.08 per share into 21,042,587 shares of the Company’s common stock.

(b) The notes are unsecured, accrue interest at 10% per annum, and are due on demand. The notes were issued relating to a management services agreement with The Matthews Group (see Note 6) dated December 31, 2015. At June 30, 2020, notes due to The Matthews Group totaled $2,630,000. During the period ended December 31, 2020, $269,000 of notes payable were issued and interest of $118,000 was added to principal, resulting in a balance owed of $3,017,000 at December 31, 2020.

(c) The notes are due to a current and a former director, are unsecured, convertible into common stock at per share amounts ranging from $0.08 to $0.30, and bear interest at rates ranging from 8% to 10% per annum. 

At June 30, 2020, convertible notes due to other related parties totaled $294,000. During the period ended December 31, 2020, interest of $7,000 was added to principal resulting in a balance owed of $301,000 at December 31, 2020. At December 31, 2020, $220,000 of the notes were due in 2010 and are in default, and the balance of $81,000 is due on demand. At December 31, 2020, $220,000 of the notes are convertible at a conversion price of $0.30 per share into 732,081 shares of the Company’s common stock, and $81,000 of the notes are convertible at a conversion price of $0.08 per share into 1,013,800 shares of the Company’s common stock.