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CONVERTIBLE NOTES AND NOTES PAYABLE
 6 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES AND NOTES PAYABLE

NOTE 3 – CONVERTIBLE NOTES AND NOTES PAYABLE

 

Convertible notes and notes payable

 

Convertible notes and notes payable includes principal and accrued interest and consists of the following at December 31, 2021 and June 30, 2021:

 

          
   December 31,
2021		  June 30,
2021
(a) Unsecured convertible notes ($20,000 and $19,000 in default)  $63,000   $62,000 
(b) Notes payable (in default)   449,000    440,000 
(c) Notes payable (in default)   27,000    27,000 
Total convertible notes and notes payable  $539,000   $529,000 

 

(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, 2021, convertible notes totaled $62,000. During the period ended December 31, 2021, a nominal amount of interest was added to principal, resulting in a balance owed of $63,000 at December 31, 2021. On December 31, 2021, $20,000 of the convertible notes were in default and convertible at a conversion price of $0.30 per share into 65,286 shares of the Company’s common stock. The balance of $43,000 is due on demand and convertible at a conversion price of $0.08 per share into 539,789 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, 2021, the notes totaled $440,000. During the period ended December 31, 2021, interest of $9,000 was added to principal resulting in a balance owed of $449,000 at December 31, 2021. At December 31, 2021, $404,000 of notes are secured by the Company’s intellectual property and $45,000 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, 2021, the notes totaled $27,000. During the period ended December 31, 2021, a nominal amount of interest was added to principal, resulting in a balance owed of $27,000 at December 31, 2021.

 

Convertible notes and notes payable-related parties

 

Convertible notes and notes payable-related parties includes principal and accrued interest and consists of the following at December 31, 2021 and June 30, 2021:

 

          
   December 31,
2021		  June 30,
2021
(a) Convertible notes-The Matthews Group  $1,798,000   $1,741,000 
(b) Notes payable-The Matthews Group   3,779,000    3,375,000 
(c) Convertible notes-other related parties ($229,000 and $224,000 in default)   314,000    308,000 
Total convertible notes and notes payable-related parties  $5,891,000   $5,424,000 

 

(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 7) 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, 2021, convertible notes due to The Matthews Group totaled $1,741,000. During the period ended December 31, 2021, interest of $57,000 was added to principal, resulting in a balance owed of $1,798,000 at December 31, 2021. At December 31, 2021, the notes are convertible at a conversion price of $0.08 per share into 22,473,937 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 7) dated December 31, 2015. At June 30, 2021, notes due to The Matthews Group totaled $3,375,000. During the period ended December 31, 2021, $260,000 of notes payable were issued and interest of $144,000 was added to principal, resulting in a balance owed of $3,779,000 at December 31, 2021.

 

(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, 2021, convertible notes due to other related parties totaled $308,000. During the period ended December 31, 2021, interest of $6,000 was added to principal resulting in a balance owed of $314,000 at December 31, 2021. At December 31, 2021, $229,000 of the notes were due in 2010 and are in default, and the balance of $85,000 is due on demand. At December 31, 2021, $229,000 of the notes are convertible at a conversion price of $0.30 per share into 762,081 shares of the Company’s common stock, and $85,000 of the notes are convertible at a conversion price of $0.08 per share into 1,070,050 shares of the Company’s common stock.