At September 30, 2018 and June 30, 2018, convertible loans consisted of the following:

		September 30,		June 30,
		2018		2018
July 16, 2018 Note	$	25,000	$	-
August 16, 2018 Note		50,000		-
Total convertible notes payable		75,000		-
Less: Unamortized debt discount		(61,553)		-
Total convertible notes		13,447		-

Less: current portion of convertible notes		13,447		-
Long-term convertible notes	$	-	$	-

During the three months ended September 30, 2018 and 2017, the Company recognized amortization of discount, included in interest expense, of $13,447 and $0, respectively.

During the three months ended September 30, 2018, the Company issued a total of $75,000 notes with the following terms:

· Conversion prices are typically based on the discounted (50% discount) lowest trading prices of the Company’s shares during various periods prior to conversion.

Certain notes allow the Company to redeem the notes at rates ranging from 130% to 140% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the notes include financing costs totaling to $2,750 and the Company received cash of $72,250. Convertible notes are currently in default.

The Company determined that the exercise feature of the warrants met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity’s Own Stock. The Company will bifurcate the embedded conversion option in the note once the note becomes convertible and account for it as a derivative liability.

The Company valued the conversion features using the Black Scholes valuation model. The fair value of the derivative liability for all the note and warrants that became convertible for the three months ended September 30, 2018 amounted to $588,818. $72,250 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $516,568 was recognized as a “day 1” derivative loss.