NOTE 10 - NON-CURRENT NOTES PAYABLE

12 Months Ended

Jun. 30, 2022

Notes

NOTE 10 - NON-CURRENT NOTES PAYABLE

NOTE 10 – NON-CURRENT NOTES PAYABLE

Notes Payable

During the quarter ended December 31, 2021, a shareholder made two secured loans of $200,000 each, with an annual interest rate of 10% and, note maturity dates of two years from the date of the notes. Interest is due and payable on the annual anniversary dates and the principal is due on the maturity date of the notes. The note holder loans are secured by the Duncan, Arizona mill property. Accrued interest on the notes at June 30, 2022 is $26,575. Interest expense on these notes for the year ended June 30, 2022 is $26,575. In conjunction with each note issuance, the Company granted 4,000,000 two-year vested stock options with a strike price of $0.05 per share.

Paycheck Protection Program Loans

During the quarter ending June 30, 2020, the Company entered into a Promissory Notes (the “PPP Notes”) with Bank of Oklahoma as the lender (the “Lender”), pursuant to which the Lender agreed to make the loans to the Company under the Paycheck Protection Program (the "PPP Loan") offered by the U.S. Small Business Administration (the “SBA”) in a principal amount of $224,700 pursuant to Title 1 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”).

The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, other similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. The amount that will be forgiven will be calculated in part with reference to the Company’s full time headcount during the twenty-four week covered period, as adjusted for current regulation updates, following the funding of the PPP Loan. 

During our fiscal year 2021 our PPP loans received in 2020, and the accrued interest thereon were forgiven in the amount of $226,367 and a gain on debt forgiveness was recognized.

During our fiscal year 2022 we received two loans in the second round of the PPP loan program in the principal amount of $109,520.

The PPP Loan proceeds are available to be used to pay for payroll costs, including salaries, and similar compensation, group health care benefits, and paid leaves; rent; utilities; and interest on certain other outstanding debt. Any amount that will be forgiven will be calculated in part with reference to the Company’s fulltime headcount during the twenty-four-week covered period. Under the new regulations for the second draw, at least 60% of the proceeds must be spent on payroll costs.

The interest rate on the PPP Note is a fixed rate of 1% per annum. To the extent that the amounts owed under the PPP Loans, or a portion of them, are not forgiven, the Company will be required to make principal and interest payments. Currently, the deferral period for payments of principal and interest is 10 months from the end of the covered period. A loan forgiveness application must be submitted to the lender within the 10 months after the 24-week covered period. The Company will not have to begin principal and interest payments before the date on which the SBA remits the loan forgiveness amount to the lender.

Under current regulations, any monthly installments would begin approximately seventeen months from March 20, 2021. The PPP Notes have a maturity dates of five years from their effective note date. The PPP Note includes events of default. Upon the occurrence of an event of default, the Lender will have the right to exercise remedies against the Company, including the right to require immediate payment of all amounts due under the PPP Note.

The following summarizes non-current debt at June 30, 2022 and 2021:

	June 30,
	2022		2021
Notes payable	$	400,000	$	-
Loans payable to bank under the Paycheck Protection Program		109,520		109,520
Accrued interest on Paycheck Protection Program Loans	1,266		363
	$	510,786	$	109,883