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5. NOTES PAYABLE

9 Months Ended

Mar. 31, 2018

Convertible Notes Payable

In accounting for its convertible notes payable where derivative accounting does not apply, proceeds from the sale of a convertible debt instrument with Common Stock purchase warrants are allocated to the two elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portions of the proceeds allocated to the warrants are accounted for as paid-in capital with an offset to debt discount. The remainder of the proceeds are allocated to the debt instrument portion of the transaction as prescribed by ASC 470-25-20. The Company then calculates the effective conversion price of the note based on the relative fair value allocated to the debt instrument to determine the fair value of any beneficial conversion feature (“BCF”) associated with the convertible note in accordance with ASC 470-20-30. The BCF is recorded to additional paid-in capital with an offset to debt discount. Both the debt discount related to the issuance of warrants and related to a BCF is amortized over the life of the note.

Convertible Notes Payable – Related Parties

Convertible notes payable due to related parties consisted of the following as of March 31, 2018 and June 30, 2017, respectively:

Convertible Notes Payable – Related Parties
	March 31,		June 30,
	2018		2017
Various term notes with total face value of $3,925,000 issued from February 2010 to April 2013, interest rates range from 10% to 15%, net of unamortized discount of $0 as of March 31, 2018 and June 30, 2017, of which $3,925,000 was extinguished.	$	-	$	3,925,000
$30,000 face value, issued in August 2016, interest rate of 0%, matures January 2017, a gain on extinguishment of debt was recorded totaling $3,818 net unamortized discount of $0 as of March 31, 2018 and June 30, 2017.		30,000		26,182
$10,000 face value, issued in November 2017, interest rate of 0%, matures November 2018, net amortized discount of $0 as of March 31, 2018.		10,000		-
$25,000 face value, issued in December 2017, interest rate of 0%, matures December 2018, net amortized discount of $3,750 as of March 31, 2018.		22,175		-
$10,000 face value, issued in January 2018, interest rate of 0%, matures January 2019, net unamortized discount of $784 as of March 31, 2018.		9,216		-
$15,000 face value, issued in January 2018, interest rate of 0%, matures January 2019, net unamortized discount of $2,064 as of March 31, 2018.		12,936		-
$24,500 face value, issued in February 2018, interest rate of 0%, matures February 2019, net unamortized discount of $0 as of March 31, 2018.		24,500		-
Total convertible notes payable – related parties		108,827		3,951,182
Less current portion		108,827		3,951,182
Convertible notes payable – related parties, long-term	$	-	$	-

As part of a settlement agreement dated March 30, 2018, the agreed to extinguish $3,925,000 in convertible notes with related parties and accrued interest of $240,041, $575,000 in related party notes payable and accrued interest of $43,007 for a total payment of $200,000. As part of the arrangement the note holder agreed to cancel 14,837,251 shares of common stock and 531,250 warrants.

On December 30, 2017, the Company issued a note to a related party for $25,000 that matures on December 30, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $3,750.

On January 4, 2018, the Company issued a note to a related party for $15,000 that matures on January 4, 2019. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $2,700.

On January 11, 2018, the Company issued a note to a related party for $10,000 that matures on January 11, 2019. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $1,000.

On February 14, 2018, the Company issued a note to a related party for $24,500 that matures on February 14, 2019. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share.

Convertible Notes Payable - Non-Related Parties

Convertible notes payable due to non-related parties consisted of the following as of March 31, 2018 and June 30, 2017, respectively:

Convertible Notes Payable - Non-Related Parties
	March 31, 2018		June 30, 2017
	March 31, 2018		June 30, 2017
$7,000 face value, issued in July 2014, interest rate of 6%, matures October 2017, net unamortized discount of $0 as of March 31, 2018 and June 30, 2017, respectively.	$	7,000	$	7,000
$600,000 face value, issued in November 2015, interest rate of 0%, an OID of $190,000, matures January 2018, net unamortized discount of $0 of March 31, 2018 and June 30, 2017, respectively, of which $335,000 has been paid.		355,000		430,000
$100,000 face value, issued in February 2016, interest rate of 10%, matures March 2018, net unamortized discount of $0 as of March 31, 2018 and June 30, 2017, respectively.		100,000		100,000
$25,000 face value, issued in February 2016, interest rate of 10%, matures February 2017, net unamortized discount of $0 as of March 31, 2018 and June 30, 2017, respectively.		25,000		25,000
$100,000 face value, issued in March 2016, interest rate of 10%, matures June 2017, net unamortized discount of $0 as of March 31, 2018 and June 30, 2017, respectively.		100,000		100,000
$10,000 face value, issued in March 2016, interest rate of 10%, matures March 2018, net unamortized discount $0 of March 31, 2018 and June 30, 2017, respectively.		10,000		10,000
$50,000 face value, issued in July 2016, interest rate of 0%, matures October 2017, net unamortized discount of $0 of March 31, 2018 and June 30, 2017, respectively.		50,000		50,000
$50,000 face value, issued in August 2016, interest rate of 0%, matures September which was amended to January 2018, net unamortized discount of $1,403 and $5,418 of March 31, 2018 and June 30, 2017, respectively.		50,000		44,582
$1,000,000 face value, issued in September 2016, interest rate of 10%, matures June 2017, net unamortized discount of $0 as of March 31, 2018 and June 30, 2017, respectively.		1,000,000		1,000,000
$149,000 face value, issued in February 2017, interest rate of 10%, matures February 2018, net amortized discount of $0 and $59,740 as of March 31, 2018 and June 30, 2017, respectively, of which $30,000 has been paid.		119,000		89,260
$224,000 face value, issued in February 2017, interest rate of 10%, matures February 2018, net amortized discount of $32,452 and $119,795 as of March 31, 2018 and June 30, 2017, respectively, of which $57,337 has been paid.		166,663		104,205
$258,000 face value, issued in February 2017, interest rate of 12%, matures August 2017, net amortized discount of $0 and $48,464 as of March 31, 2018 and June 30, 2017, respectively, of which $258,000 has been paid.		-		209,536
$55,000 face value, issued in June 2017, interest rate of 10%, matures April 2018, with additional fees of $20,000 net amortized discount of $3,341 and $50,631 as of March 31, 2018 and June 30, 2017, respectively, of which $30,000 has been paid.		45,000		4,369
$100,000 face value, issued in June 2017, interest rate of 7%, matures June 2018, net amortized discount of $13,043 and $52,317 as of March 31, 2018 and June 30, 2017, respectively.		86,957		47,683
$265,000 face value, issued in May 2017, interest rate of 10%, matures February 2018, net amortized discount of $45,267 and $218,790 as of March 31, 2018 and June 30, 2017, respectively, of which $62,238 has been paid.		202,362		46,210
$78,000 face value, issued in July 2017, interest rate of 12%, matures May 2018, net amortized discount of $848 as of March 31, 2018, of which $72,000 has been paid.		5,152		-
$50,000 face value, issued in August 2017, interest rate of 0%, matures October 2017, net amortized discount of $0 as of March 31, 2018, of which $34,000 has been converted and $16,000 was transferred to a new note		-		-
$60,500 face value, issued in August 2017, interest rate of 12%, matures August 2018, net amortized discount of $0 as of March 31, 2018, of which $60,500 has been paid.		-		-
$10,000 face value, issued in August 2017, interest rate of 0%, matures August 2018, net amortized discount of $2,621 as of March 31, 2018.		7,376		-
$82,250 face value, issued in August 2017, interest rate of 12%, matures May 2018, net amortized discount of $8,213 as of March 31, 2018.		39,033		-
$53,000 face value, issued in August 2017, interest rate of 12%, matures June 2018, net amortized discount of 13,424 as of March 31, 2018.		39,576		-
$65,000 face value, issued in September 2017, interest rate of 12%, matures March 2018, net amortized discount of $0 as of March 31, 2018, of which $65,000 has been paid.		-		-
$10,000 face value, issued in September 2017, interest rate of 10%, matures September 2018, net amortized discount of $4,493 as of March 31, 2018.		5,507		-
$5,000 face value, issued in September 2017, interest rate of 0%, matures March 2018, net amortized discount of $1,354 as of March 31, 2018.		3,646		-
$50,000 face value, issued in September 2017, interest rate of 0%, matures November 2017, net amortized discount of $0 as of March 31, 2018, of which $50,000 was transferred to a new note.		-		-
$110,000 face value, issued in October 2017, interest rate of 10%, matures July 2018, net amortized discount of $43,114 as of March 31, 2018.		66,886		-
$100,000 face value, issued in October 2017, interest rate of 10%, matures October 2018, net amortized discount of $39,129 as of March 31, 2018.		60,871		-
$115,000 face value, issued in November 2017, interest rate of 10%, matures August 2018, net amortized discount of $69,950 as of March 31, 2018.		45,050		-
$50,000 face value, issued in November 2017, interest rate of 10%, matures January 2018, net amortized discount of $0.00 as of March 31, 2018.		50,000		-
$66,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $28,190 as of March 31, 2018.		37,810		-
$100,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $64,384 as of March 31, 2018.		35,616		-
$5,000 face value, issued in November 2017, interest rate of 10%, matures November 2018, net amortized discount of $3,127 as of March 31, 2018.		1,873		-
$53,000 face value, issued in November 2017, interest rate of 12%, matures July 2018, net amortized discount of $24,657 as of March 31, 2018.		28,343		-
$100,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $30,853 as of March 31, 2018.		69,147		-
$20,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $7,141 as of March 31, 2018.		12,859		-
$75,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $34,644 as of March 31, 2018.		40,356		-
$20,000 face value, issued in December 2017, interest rate of 10%, matures December 2018, net amortized discount of $9,238 as of March 31, 2018.		10,762		-
$6,000 face value, issued in February 2018, interest rate of 10%, matures April 2018, net amortized discount of $0.00 as of March 31, 2018.		6,000		-
$20,000 face value, issued in February 2018, interest rate of 10%, matures February 2019, net amortized discount of $6,732 as of March 31, 2018.		13,268		-
$10,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $3,109 as of March 31, 2018.		6,891		-
$15,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $3,800as of March 31, 2018.		11,200		-
$100,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $29,438 as of March 31, 2018.		70,562		-
$115,000 face value, issued in January 2018, interest rate of 10%, matures October 2018, net amortized discount of $69,494 as of March 31, 2018.		45,506		-
$75,075 face value, issued in February 2018, interest rate of 10%, matures November 2018, net amortized discount of $0.00 as of March 31, 2018.		75,075		-
$53,000 face value, issued in January 2018, interest rate of 12%, matures November 2018, net amortized discount of $0.00 as of March 31, 2018.		53,000		-
Total convertible notes payable – non-related parties		3,147,681		2,267,845
Less current portion		3,147,681		2,267,845
Convertible notes payable – non-related parties, long-term	$	-	$	-

On November 20, 2015, the Company issued a convertible note to an unrelated company for $600,000 that matures on May 20, 2016. The company paid $200,000 in principle balance leaving a remain balance of $430,000 including the extension fees and is not convertible unless the borrower defaults under the amendment agreement dated January 1, 2017. The note bears 0% interest and had an original issue discount (OID) of $100,000. This note is not convertible unless there is a default event. Per the terms of the note there are no derivatives until it becomes convertible on the original note, however the $30,000 extensions are to be considered derivatives. The Lender released a clarification of amendments to convertible promissory notes that explained the $30,000 extension fees are the only portion that is to be considered as convertible and converts within 2 days of issuance. The intent of the amendment agreements were to insure the original note dated November 20, 2015 in the amount of $600,000. Because the terms do not dictate a maximum numbers of convertible shares, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability Under ASC 815-40. The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares. During the extension and conversion day period no additional convertible instruments were issued, therefore on the extension was considered in the derivative calculation. The Company extended the maturity date seven times since February 27, 2017 for a total of $210,000, of which, the Company paid $135,000 in the nine months ended March 31, 2018. The Company latest and fourteenth extension with consideration of $30,000 was on December 18, 2017 to extending the maturity date to January 31, 2018. The Company evaluated the amendments under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On February 2, 2018, the note converted the principal of $30,000 for 680,118 shares of common stock. On February 23, 2018, the note converted the principal of $30,000 for 1,083,698 shares of common stock.

On February 15, 2016, the Company issued a convertible note to an unrelated individual for $25,000 that matures on February 15, 2017. The note was amended subsequently in September 28, 2017 to extend the maturity date to October 15, 2017. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt.

On September 15, 2016, the Company issued a convertible note to an unrelated individual for $1,000,000 that matures on June 30, 2017. The note was amended subsequently on June 30, 2017 to extend the maturity date to June 30, 2018. The Company evaluated amendment under ASC 47050, "Debt Modification and Extinguishment", and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt.

On February 23, 2017, the Company issued a convertible note to an unrelated company for $149,000 that matures on November 23, 2017. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids 20 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, that this percentage discount (variable) exercise price indicates is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by paying $10,000 of principal and $1,400 of accrued interest on October 23, 2017 to November 24, 2017 and extend the maturity date to February 21, 2018. The Company extended the possibility to convert date by paying $10,000 of principal and $4,000 of accrued interest on November 29, 2017 to December 22, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt.

On February 23, 2017, the Company issued a convertible note to an unrelated company for $224,000 that matures on November 23, 2017. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at lesser of 40% of the average three lowest closing bids 20 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The Company extended the possibility to convert date by issuing 90,000 warrants valued at $11,720 on September 8, 2017 to November 2, 2017. The Company extended the possibility to convert date by paying $10,000 of principal and $2,100 of accrued interest on October 23, 2017 to November 24, 2017 and extend the maturity date to February 21, 2018. The Company extended the possibility to convert date by paying $20,000 of principal and $6,000 of accrued interest on November 29, 2017 to December 22, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On March 12, 2018, the note converted the principal of $7,337 and $4,278 in accrued interest into for 575,000 shares of common stock.

On August 26, 2016, the Company issued a convertible note to an unrelated individual for $50,000 that matures on August 26, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share. The note was amended on June 30, 2017 to extend the maturity date to October 1, 2017. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. The note was amended again on September 28, 2017 to extend the maturity date to January 1, 2018. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension resulted in significant and consequential changes to the economic substance of the debt and thus resulted in a extinguishment of the debt. The Company recorded a debt discount of $30,000 as a result of the extinguishment.

On March 7, 2016, the Company issued a convertible note to an unrelated individual for $100,000 that matures on March 7, 2017. The note bears interest rate of 10% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share. The Company valued a BCF related to the note valued at $24,269 and debt discount related to the 10,000 shares of common stock issued with the note at a relative fair value of $4,569. The note was amended again on September 28, 2017 to extend the maturity date to January 15, 2018, as additional consideration the Company issued 25,000 shares of common stock valued at $3,998. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt.

On July 26, 2016, the Company issued a convertible note to an unrelated individual for $50,000 that matures on September 26, 2016. The note bears interest rate of 0% per annum and is convertible into shares of the Company’s Common stock at $0.40 per share, as part of the note the company issued warrants to purchase 35,000 shares of 144 restricted common stock at an exercise price $0.30 for a two-year period. The note was amended on September 28, 2017 to extend the maturity date to January 15, 2018, as additional consideration the Company issued 15,000 shares of common stock valued at $2,399. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt.

On May 12, 2017, the Company issued a convertible note to an unrelated company for $265,000 that matures on February 17, 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at the lesser of $.31 and 60% of the lowest closing bids 25 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On February 22, 2018, the note converted interest of $9,200 and $250 in conversion fees for 450,000 shares of common stock. On March 6, 2018, the note converted principal of $11,138, $13,812 in interest, and $250 in conversion fees for 1,200,000 shares of common stock.

On June 13, 2017, the Company issued a convertible note to an unrelated company for $55,000 that matures on January 13, 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids 30 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. The note was amended on December 13, 2017, to extend the maturity date to January 15, 2018 and again on January 18, 2018, to extend the maturity date to February 15, 2018.As consideration for the extensions two extension fees of $10,000 each had been added to the outstanding principal. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did result in significant and consequential changes to the economic substance of the debt and thus resulted in an extinguishment of the debt and the company recorded a loss on extinguishment of debt of $20,000. On March 5, 2018, the note converted the principal of $15,000 for 745,342 shares of common stock. On March 21, 2018, the note converted the principal of $15,000 for 745,342 shares of common stock.

In conjunction with the note, the Company issued to the holder 55,000 warrants to purchase Common Shares. The value of the debt discount recorded was $41,150 and the debt discount related to the attached relative fair value of warrants was $8,850, for a total debt discount of $50,000, and a derivative expense of $9,432.

On July 31, 2017, the Company issued a convertible note to an unrelated company for $78,000, which included $75,000 in proceeds and $3,000 in legal fees, that matures on April 10, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest two trading prices during the fifteen (15) trading day period ending to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On February 1, 2018, the note converted the principal of $12,000 for 238,284 shares of common stock. On February 1, 2018, the note converted the principal of $12,000 for 238,284 shares of common stock. On February 15, 2018, the note converted the principal of $20,000 for 529,101 shares of common stock. On February 22, 2018, the note converted the principal of $20,000 for 655,738 shares of common stock. On March 2, 2018, the note converted the principal of $20,000 for 809,717 shares of common stock.

On August 2, 2017, the Company issued a convertible note to an unrelated party for $50,000 that matures on August 24, 2017. The note bears 0% interest per annum, in lieu of interest the Company issued 12,000 shares of common stock on August 4, 2017. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $31,287 and debt discount related to the 12,000 shares of common stock issued with the note at a relative fair value of $1,837. The note was amended on September 15, 2017, to extend the maturity date to October 15, 2017. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt. On September 15, 2017, the note converted the principal of $34,000 for 340,000 shares of common stock. On November 17, 2017, the company transferred the remaining balance to a new note, see below.

On August 2, 2017, the Company issued a convertible note to an unrelated company for $60,500, which includes proceeds of $55,000, and $5,500 in OID, that matures on August 2, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest two trading prices during the fifteen (15) trading day period ending to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On August 4, 2017, the Company issued a convertible note to an unrelated party for $10,000 that matures on August 4, 2018. The note bears 0% interest per annum, in lieu of interest the Company issued 3,500 shares of common stock on August 7, 2017. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $7,056 and debt discount related to the 3,500 shares of common stock issued with the note at a relative fair value of $546.

On August 15, 2017, the Company issued a convertible note to an unrelated company for $82,250, which included $75,000 in proceeds and $7,250 in legal and other fees, that matures on April 18, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 60% the lowest trading price during the previous twenty (2) days to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. On February 21, 2018, the note converted the principal of $15,000 for 714,285 shares of common stock. On March 21, 2018, the note converted the principal of $20,000 for 833,333 shares of common stock.

On August 16, 2017, the Company issued a convertible note to an unrelated company for $53,000, which included $50,000 in proceeds and $3,000 in legal fees, that matures on June 16, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest two trading prices during the fifteen (15) trading day period ending to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On September 8, 2017, the Company issued a convertible note to an unrelated company for $65,000, which included $58,500 in proceeds and $6,500 in OID, that matures on March 8, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 55% of either the lowest sales price for common stock on principal market during the twenty-five consecutive trading days including the immediately preceding the conversion date. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On September 11, 2017, the Company issued a convertible note to an unrelated party for $10,000 that matures on September 11, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On September 27, 2017, the Company issued a convertible note to an unrelated party for $5,000 that matures on March 31, 2018. The note bears 0% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $2,995.

On September 28, 2017, the Company issued a convertible note to an unrelated party for $50,000 that matures on November 28, 2017. The note bears 0% interest per annum, in lieu of interest the Company issued 25,000 shares of common stock. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $33,397 and debt discount related to the 25,000 shares of common stock issued with the note at a relative fair value of $3,702. On November 17, 2017, the company transferred the remaining balance to a new note, see below.

On October 16, 2017, the Company issued a convertible note to an unrelated company for $110,000 that matures on July 16, 2018. The note bears 10% interest per annum and is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bid 30 days prior to the conversion date. Additionally, the note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates that these shares, if issued, are not indexed to the Company’s own stock and, therefore, is an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

The Company extended the possibility to convert date by issuing 60,000 warrants valued at $7,813 on September 8, 2017 to November 2, 2017. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model. The Company extended the possibility to convert date by paying $164,469 in principal on October 23, 2017 to February 21, 2018. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did not result in significant and consequential changes to the economic substance of the debt and thus resulted in a modification of the debt and not extinguishment of the debt.

On October 29, 2017, the Company issued a convertible note to an unrelated party for $100,000 that matures October 29, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 750,002 shares of common stock. The Company valued a BCF related to the note valued at $20,000 and debt discount related to the 750,002 shares of common stock issued with the note at a relative fair value of $47,368.

On November 13, 2017, the Company issued a convertible note to an unrelated party for $115,000 that matures on August 13, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids 30 days prior to the conversion per share. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. As additional consideration the Company also issued 150,000 warrants valued at $12,570. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model.

On November 13, 2017, the Company issued a convertible note to an unrelated party for $50,000 that matures January 10, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a BCF related to the note valued at $18,500.

The note was amended on October 30, 2017, to extend the conversion rights from 180 days to 225 days, in consideration of the extension the Company paid $25,000 and issued 150,000 valued at $6,691. The Company evaluated amendment under ASC 470-50, “Debt - Modification and Extinguishment”, and concluded that the extension did result in significant and consequential changes to the economic substance of the debt and thus resulted in an extinguishment of the debt.

On November 17, 2017, the Company issued a convertible note to an unrelated party for $66,000 that matures November 17, 2018 in exchange for two existing notes for $16,000 issued on August 2, 2017 and $50,000 on September 28, 2017. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 495,001. The Company valued a BCF related to the note valued at $13,266 and debt discount related to the 495,001shares of common stock issued with the note at a relative fair value of $31,277.

On November 21, 2017, the Company issued a convertible note to an unrelated party for $100,000 that matures on November 21, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at 57.5% of the lowest closing bids 20 days prior to the conversion per share. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On November 24, 2017, the Company issued a convertible note to an unrelated party for $5,000 that matures November 24, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 37,500. The Company valued a BCF related to the note valued at $2,200 and debt discount related to the 37,500shares of common stock issued with the note at a relative fair value of $2,596.

On November 28, 2017, the Company issued a convertible note to an unrelated party for $53,000 that matures on July 16, 2018. The note bears 12% interest per annum. The note is convertible into shares of the Company’s common stock at 61% of the lowest closing bids 15 days prior to the conversion per share. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On December 18, 2017, the Company issued a convertible note to an unrelated party for $100,000 that matures December 18, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 750,002. The Company valued a BCF related to the note valued at $100 and debt discount related to the 750,002 shares of common stock issued with the note at a relative fair value of $42,882.

On December 21, 2017, the Company issued a convertible note to an unrelated party for $20,000 that matures December 21, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 150,000 The Company valued a BCF related to the note valued at $1,020 and debt discount related to the 150,000 shares of common stock issued with the note at a relative fair value of $8,816.

On December 31, 2017, the Company issued a convertible note to an unrelated party for $75,000 that matures December 31, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 150,000. The Company valued a BCF related to the note valued at $11,250 and debt discount related to the 150,000 shares of common stock issued with the note at a relative fair value of $34,732.

On December 31, 2017, the Company issued a convertible note to an unrelated party for $20,000 that matures December 31, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. As additional consideration the Company is to issue shares of common stock as initial interest payment in kind calculated by dividing the principal by $0133333 per share totaling 562,501. The Company valued a BCF related to the note valued at $3,000 and debt discount related to the 562,501 shares of common stock issued with the note at a relative fair value of $9,262.

On January 8, 2018, the Company issued a convertible note to an unrelated company for $53,000, which included $50,000 in proceeds and $3,000 in legal fees, that matures on November 10, 2018. The note bears 12% interest per annum and is convertible into shares of the Company’s common stock at 61% of the lowest two trading prices during the fifteen (15) trading day period ending to the date of conversion. The note contains a percentage discount (variable) exercise price which causes the number to be converted into a number of common shares that “approach infinity”, as the underlying stock price could approach zero. The Company determined under ASC 815, the Company has determined that this percentage discount (variable) exercise price indicates an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value.

On January 10, 2018, the Company issued a convertible note to an unrelated party for $115,000 that matures on October 10, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at the lesser of $.12 and 57.5% of the lowest trading price during the prior 30 days. Due to sequencing on February 2, 2017, the Company determined under ASC 815, the Company has determined that the note is to be treated as an embedded derivative financial liability, which requires bifurcation and to be separately accounted for. At each reporting period, the Company will mark this derivative financial instrument to its estimated fair value. As additional consideration the Company also issued 150,000 warrants valued at $11,056 The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model.

On February 8, 2018, the Company issued a convertible note to an unrelated party for $20,000 that matures February 8, 2019. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a debt discount related to the 150,004 shares of common stock issued with the note at a relative fair value of $7,581.

On February 21, 2018, the Company issued a convertible note to an unrelated party for $6,000 that matures April 1, 2018. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share.

On March 2, 2018, the Company issued a convertible note to an unrelated party for $10,000 that matures March 2, 2019. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a debt discount related to the 75,002 shares of common stock issued with the note at a relative fair value of $3,377.

On March 5, 2018, the Company issued a convertible note to an unrelated party for $15,000 that matures March 5, 2019. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a debt discount related to the 112,503 shares of common stock issued with the note at a relative fair value of $4,091.

On March 12, 2018, the Company issued a convertible note to an unrelated party for $100,000 that matures March 12, 2019. The note bears 10% interest per annum. The note is convertible into shares of the Company’s common stock at $0.10 per share. The Company valued a debt discount related to the 750,019 shares of common stock issued with the note at a relative fair value of $31,055.

On March 29, 2018, the Company issued a convertible note to an unrelated party for $225,000 that matures March 29, 2019. The note bears 10% interest per annum. The Company valued a debt discount related to the 2,000,000 shares of common stock issued with the note at a relative fair value of $78,261.

Notes Payable – Related Parties

Notes payable due to related parties consisted of the following as of March 31, 2018 and June 30, 2017, respectively:

Notes Payable – Related Parties

	March 31,		June 30,
	2018		2017

Various term notes with total face value of $585,000 issued from April 11 to June 17, interest rates range from 0% to 15%, net of unamortized discount of $0 as of March 31, 2018 and June 30, 2017, respectively, of which $210,000 has been paid and 375,000 had been extinguished.	$	-	$	585,000
$5,000 face value, issued in November 2016, interest rate of 0%, with no maturity date.		5,000		-
$25,000 face value, issued in February 2017, interest rate of 0%, matures October 2017., of which $5,000 has been paid.		20,000		-
$18,000 face value, issued in September 2017, interest rate of 0%, matures November 2017.		18,000		-
$15,000 face value, issued in October 2017, interest rate of 0%, matures October 2018.		15,000		-
$25,000 face value, issued in December 2017, interest rate of 0%, matures December 2018.		25,000		-
$35,000 face value, issued in December 2017, interest rate of 0%, matures December 2018, of which $35,000 has been paid.		-		-
$7,500 face value, issued in March 2018, interest rate of 0%, matures March 2019.		7,500		-
$10,000 face value, issued in March 2018, interest rate of 0%, matures March 2019.		10,000		-
Total notes payable – related parties		75,500		610,000
Less current portion		75,500		610,000
Notes payable - related parties, long term	$	-	$	-

Notes Payable – Non-Related Parties

Notes payable due to non-related parties consisted of the following as of March 31, 2018 and June 30, 2017, respectively:

Notes Payable – Non-Related Parties
	March 31,		June 30,
	2018		2017
Various term notes with total face value of $40,488 due upon demand, interest rates range from 0% to 14% of which $40,488 have been extinguished.	$	-	$	40,488
$52,000 face value, issued in August 2017, interest rate of 0%, matures October 2017 net of unamortized discount of $0 as of March 31, 2018.		52,000		-
$52,000 face value, issued in August 2017, interest rate of 0%, matures October 2017 net of unamortized discount of $5,463 as of March 31, 2018.		46,537		-
$81,000 face value, issued in September 2017, interest rate of 8% per month, matures March 2018 net of unamortized discount of $0 as of March 31, 2018.		81,000		-
$255,000 face value, issued in October 2017, interest rate of 2.5% per month, matures February 2018 net of unamortized discount of $0 as of March 31, 2018, of which $255,000 has been paid.		-		-

$50,000 face value, issued in March 2018, interest rate of 10%, matures March 2019, net amortized discount of $3,190 as of March 31, 2018.

50,000

$225,000 face value, issued in March 2018, interest rate of 30% , matures March 2019 net of unamortized discount of $77,832 as of March 31, 2018.		147,168		-
Total note payable – non-related parties		376,705		40,488
Less current portion		376,705		40,488
Notes payable – non-related parties, long-term	$	-	$	-

On August 25, 2017, the Company issued a note to an unrelated party for $52,000 as part of an Accounts Receivable Financing Agreement, which included $50,000 in proceeds and an OID of $2,000, that matures on October 25, 2017. The note bears 0% interest per annum. As additional consideration the Company also issued 50,000 warrants valued at $6,625. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model.

On August 31, 2017, the Company issued a note to an unrelated party for $52,000 as part of an Accounts Receivable Financing Agreement, which included $50,000 in proceeds and an OID of $2,000, that matures on October 31, 2017. The note bears 0% interest per annum. As additional consideration the Company also issued 50,000 warrants valued at $6,773. The warrants are considered derivative liabilities under ASC 815-40 under the Company’s sequencing policy and were valued using the multinomial lattice model.

On September 19, 2017, the Company issued a note to an unrelated party for $81,000 which included $74,504 in proceeds, $6,000 in OID, and $496 in other fees, that matures on March 19, 2018. The note bears 8% interest per month. As additional consideration the Company is to issue 75,000 shares of common stock within 10 days. The note was amended subsequently on March 19,2018, to extend the maturity date to September 19, 2018. The Company evaluated amendment under ASC 47050, "Debt Modification and Extinguishment", and concluded that the extension did result in significant and consequential changes to the economic substance of the debt and thus resulted in an and the company recorded a loss on extinguishment of debt of $0.

On October 31, 2017, the Company issued a secured promissory note to an unrelated party for $255,000, that matures on February 28, 2018. The note bears 2.5% interest per month. The note is to be paid back the greater of $1,000 per day and $75 per unit sold commencing 31 days after closing, the greater of $1,500 per day and $75 per unit sold commencing 61 days after closing, the greater of $2,000 per day and $75 per unit sold commencing 91 days after closing.

On March 2, 2018, the Company issued a note to an unrelated party for $50,000 that matures March 2, 2019. The note bears 10% interest per annum.