NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2019
(Unaudited)
1. NATURE OF OPERATIONS
AppYea, Inc. ("AppYea", "the Company", "we" or "us") was incorporated in the State of South Dakota on November 26, 2012 to engage in the acquisition, purchase, maintenance and creation of mobile software applications. The Company is in the development stage with no significant revenues and a limited operating history.
The Company incorporated a wholly-owned subsidiary, “AppYea Holdings, Inc.” in state of South Dakota on January 13, 2017 and "The Diagnostic Centers Inc." in State of South Dakota on August 2, 2017.
Through its wholly owned subsidiary, The Diagnostic Centers, Inc., AppYea markets comprehensive diagnostic testing services to physician offices, clinics, hospitals, long term care facilities, healthcare groups, and other healthcare providers.
During the quarter ended March 31, 2019 the Company entered into a management and advisory agreement with Hempori, Inc. to assist the Company in identifying and managing the Company’s overall business strategy and opportunities to enter the hemp based Cannabidiol (CBD) industry. Additionally, the Company entered into an exclusive CBD infused beverage licensing agreement with the Prouty Company to market flavored and non-flavored beverages in various formulas infused with CBD to achieve the following “mood enhancing” affects: Energy, Calm, Focus, and Sleep.
The Company's common stock is traded on the OTC Markets (www.otcmarkets.com) under the symbol "APYP". The first day of trading on the OTC Markets was December 15, 2014.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.
In the opinion of the company’s management, the accompanying unaudited interim financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the company as of March 31, 2019 and the results of operations and cash flows for the periods presented. The results of operations for the nine months ended March 31, 2019 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited financial statements should be read in conjunction with the financial statements and related notes thereto included in the company’s Annual Report on Form 10-K for the year ended June 30, 2018 filed with the SEC on October 15, 2018.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include assumptions about the valuation and recognition of stock-based compensation expense, the valuation and recognition of derivative liability, valuation allowance for deferred tax assets and useful life of fixed assets.
Principles of Consolidation
The consolidated financial statements include the accounts of AppYea and its subsidiaries. Intercompany transactions and balances have been eliminated.
Fair Value of Financial Instruments
As defined in ASC 820” Fair
Value Measurements,”
fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The following table summarizes fair value measurements by level at March 31, 2019 and June 30, 2018, measured at fair value on a recurring basis:
March 31, 2019
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
2,807,468
|
|
|
$
|
2,807,468
|
|
June 30, 2018
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
None
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
1,016,865
|
|
|
$
|
1,016,865
|
|
3. GOING CONCERN AND LIQUIDITY
At March 31, 2019, the Company had cash of $86,335 and current liabilities of $3,738,609 and a working capital deficit of $3,652,274. The Company has generated net losses from operations since inception. The Company anticipates future losses in its business. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. There is no assurance that this series of events will be satisfactorily completed.
4. FIXED ASSETS
As at March 31, 2019 and June 30, 2018, the balance of fixed assets represented a vehicle and mobile application software as follows:
|
|
March 31,
|
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Mobile applications
|
|
$
|
257,870
|
|
|
$
|
257,870
|
|
Accumulated depreciation
|
|
|
(257,070
|
)
|
|
|
(250,570
|
)
|
Fixed assets, net
|
|
$
|
800
|
|
|
$
|
7,300
|
|
Depreciation expense for the nine months ended March 31, 2019 and 2018 was $6,500 and $25,244, respectively.
5. CONVERTIBLE LOANS
At March 31, 2019 and June 30, 2018, convertible loans consisted of the following:
|
|
March 31,
|
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
March 2015 Note
|
|
$
|
-
|
|
|
$
|
-
|
|
November 2016 Note -1
|
|
|
150,000
|
|
|
|
150,000
|
|
Convertible notes - Issued in fiscal year 2018
|
|
|
111,642
|
|
|
|
195,614
|
|
Convertible notes - Issued in fiscal year 2019
|
|
|
105,000
|
|
|
|
-
|
|
Total convertible notes payable
|
|
|
366,642
|
|
|
|
345,614
|
|
|
|
|
|
|
|
|
|
|
Accrued interest
|
|
|
25,961
|
|
|
|
27,177
|
|
Less: Unamortized debt discount
|
|
|
(108,630
|
)
|
|
|
(81,968
|
)
|
Total convertible notes
|
|
|
283,973
|
|
|
|
290,823
|
|
|
|
|
|
|
|
|
|
|
Less: current portion of convertible notes
|
|
|
283,973
|
|
|
|
290,823
|
|
Long-term convertible notes
|
|
$
|
-
|
|
|
$
|
-
|
|
During the nine months ended March 31, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $78,338 and $266,157, respectively.
Conversion
During the nine months ended March 31, 2019, the Company converted notes with principal amounts and accrued interest of $136,930 into 2,390,969,927 shares of common stock. The corresponding derivative liability at the date of conversion of $703,852 was settled through additional paid in capital.
March 2015 Note
As of March 31, 2019, and June 30, 2018, the outstanding principal balance of the note was $0, the note had accrued interest of $454.
November 2016 Note 1
On November 15, 2016, the Company entered into four separate agreements with Greentree Financial Group, Inc., consisting of a Financial Advisory Agreement, a Loan Agreement, a Convertible Promissory Note, and a Warrant.
The Loan Agreement allows for the Company to borrow up to $250,000 from Greentree, which will be evidenced by various promissory notes, which will automatically mature 12 months from the date of applicable Note, will accrue interest at a rate of 12% per annum, and will include an original issuance discount (“OID”) of 10%. In addition, the promissory notes will be convertible at a price equal to 55% of the lowest trading price during the 10 trading days immediately prior to a conversion date. The conversion price shall not be lower than $0.0001. Note may not be converted prior to 6 months from its issuance. There is a 10% prepayment penalty associated with each of the promissory notes. Each promissory note conversion shall result in $1,500 being added to the principal of each promissory note converted. An initial promissory note of $100,000 was issued on November 15, 2016.
The warrant issued to Greentree allows for the purchase of up to 5,000,000 shares of the Company’s common stock for a three year period, expiring on November 15, 2019, with an exercise price of $0.03 per share. The warrants also contain a cashless exercise feature, based on a cashless exercise formula.
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 fair value of the warrants was recorded as a debt discount being amortized to interest expense over the term of the note.
On January 26, 2017 and June 30, 2017, the Company issued convertible notes of $75,000 and $75,000, respectively, according to the loan agreement on November 15, 2016.
Promissory Notes - Issued in fiscal year 2018
During the year ended June 30, 2018, the Company issued a total of $180,614 of notes with the following terms:
|
·
|
Terms ranging from 6 months to 12 months.
|
|
·
|
Annual interest rates of 5% - 12%.
|
|
·
|
Convertible at the option of the holders at issuance.
|
|
·
|
Conversion prices are typically based on the discounted (35% to 45% discount) average closing prices or lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be a floor of $0.0002 per share.
|
|
·
|
Certain note allows the principal amount will increase by $15,000 and the discount rate of conversion price will decrease by 15% if the conversion price is less than $$0.01. As a result, the discount rate of conversion price changed from 45% to 60% and the Company recognized the penalty of $15,000 and recorded principal amount of $15,000.
|
Certain notes allow the Company to redeem the notes at rates ranging from 115% to 150% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the note includes original issue discounts and financing costs totaling to $38,447 and the Company received cash of $142,167. Certain convertible notes of $54,693 are currently in default.
On June 25, 2018, the Company entered into and closed a financing transaction with Bellridge Capital L.P. consisting of a Securities Purchase Agreement, a Secured Convertible Promissory Note, and a Warrant.
The Securities Purchase Agreement provides that Bellridge Capital L.P. would receive a Secured Convertible Promissory Note in an amount of $78,947 in exchange for a funding amount of $78,947, and as additional consideration would also receive a Warrant for the purchase of an additional 394,735,000 shares of common stock. The Convertible Promissory Note will accrue interest at a rate of 5% per annum, default interest at a rate of 24% per annum, and will be convertible at a price equal to the lesser of (i) $0.0002, and (ii) the variable conversion price, which is defined as 65% of the lowest daily VWAP in the twenty (20) Trading Days prior to the Conversion Date . The “market price” is defined as the lowest trading price for the common stock during the twenty-five trading day period ending on the last complete trading day prior to the conversion date. The “trading price” is defined as the lowest trade price on the OTC Pink, OTCQB or applicable trading market. Bellridge Capital L.P. shall not be able to convert the promissory notes in an amount that would result in the beneficial ownership of greater than 4.99% of the outstanding shares of the Company, with the exception that the limitation may be waived by Bellridge Capital L.P. with 61 days prior notice. If, at any time when the note is issued and outstanding, the Company sells or issues shares of common stock for no consideration or for a consideration price per share less than the conversion price in effect on the date of such issuance, the conversion price for the note would be reduced to the amount of the consideration per share received by the Company for such dilutive issuance. If the Company prepays the note on or before 90 days following the date of the note, the Company shall be required to pay 115%, multiplied by the sum of the outstanding principal of the note, plus all accrued and unpaid interest and default interest if any. If the Company prepays the note during the period beginning 91 days and ending 180 days from the issue date of the note, the Company shall be required to pay 120% multiplied by the sum of the then outstanding principal amount of the note, plus accrued and unpaid interest and default interest, if any. If the Company prepays the note during the period beginning after 180 days from the issue date of the note, the Company shall be required to pay 125% multiplied by the sum of the then outstanding principal amount of the note, plus accrued and unpaid interest and default interest, if any.
The warrant issued to Bellridge Capital L.P. allows for the purchase of up to 394,735,000 shares of the Company’s common stock for a three-year period with an exercise price of $0.0002 per share. The warrants also contain a cashless exercise feature, based on a cashless exercise formula. In connection with the Secured Promissory Note, the Company entered into a Security Agreement which grants the Debtor a security interest in all of the assets of the Company. On March 15, 2019, the Company agreed to amend the exercise price of warrants to $0.0001.
Promissory Notes - Issued in fiscal year 2019
During the nine months ended March 31, 2019, the Company issued a total of $105,000 of notes with the following terms:
|
·
|
Terms ranging from 3 months to 12 months.
|
|
·
|
Annual interest rates of 5% - 8%.
|
|
·
|
Convertible at the option of the holders at issuance.
|
|
·
|
Conversion prices are typically based on the discounted (45% discount) average closing prices or lowest trading prices of the Company’s shares during various periods prior to conversion. Certain notes allow for the conversion price to be a floor of $0.0002 per share.
|
|
·
|
The note of $80,000 is the tranche of Note issued on June 25, 2018.
|
Certain notes allow the Company to redeem the notes at rates ranging from 115% to 125% depending on the redemption date provided that no redemption is allowed after the 180th day. Likewise, the note includes original issue discounts and financing costs totaling to $5,000 and the Company received cash of $100,000. Certain convertible note was also provided with a total of 50,000,000 common shares.
Derivative liabilities
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 fair value of the warrants was recorded as a debt discount being amortized to interest expense over the term of the note.
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 year ended June 30, 2018 amounted to $965,401. $277,167 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $688,234 was recognized as a “day 1” derivative loss.
The fair value of the derivative liability for all the note that became convertible for the nine months ended March 31, 2019 amounted to $387,038. $85,000 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $302,038 was recognized as a “day 1” derivative loss.
Warrants
A summary of activity during the nine months ended March 31, 2019 follows:
|
|
Warrants Outstanding
|
|
|
|
Shares
|
|
|
Weighted Average
Exercise Price
|
|
Outstanding, June 30, 2018
|
|
|
592,916,818
|
|
|
$
|
0.0004
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
Reset feature
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
Forfeited/canceled
|
|
|
-
|
|
|
|
-
|
|
Outstanding, March 31, 2019
|
|
|
592,916,818
|
|
|
$
|
0.0004
|
|
The following table summarizes information relating to outstanding and exercisable warrants as of March 31, 2019:
Warrants Outstanding
|
|
|
Warrants Exercisable
|
|
Number of
|
|
|
Weighted Average Remaining
|
|
|
Weighted Average
|
|
|
Number of
|
|
|
Weighted Average
|
|
Shares
|
|
|
Contractual life (in years)
|
|
|
Exercise Price
|
|
|
Shares
|
|
|
Exercise Price
|
|
|
5,000,000
|
|
|
|
0.63
|
|
|
$
|
0.03
|
|
|
|
5,000,000
|
|
|
$
|
0.03
|
|
|
193,181,818
|
|
|
|
3.54
|
|
|
$
|
0.0001
|
|
|
|
193,181,818
|
|
|
$
|
0.0001
|
|
|
394,735,000
|
|
|
|
2.24
|
|
|
$
|
0.0001
|
|
|
|
394,735,000
|
|
|
$
|
0.0001
|
|
|
592,916,818
|
|
|
|
2.65
|
|
|
$
|
0.0004
|
|
|
|
592,916,818
|
|
|
$
|
0.0004
|
|
6. CONVERTIBLE LOANS – RELATED PARTY
At March 31, 2019 and June 30, 2018, convertible loan – related party consisted of the following:
|
|
March 31,
|
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Convertible notes - related party -Issued in fiscal year 2018
|
|
|
-
|
|
|
|
8,333
|
|
Total convertible notes payable
|
|
|
-
|
|
|
|
8,333
|
|
|
|
|
|
|
|
|
|
|
Accrued interest -related party
|
|
|
-
|
|
|
|
644
|
|
Less: Unamortized debt discount - related party
|
|
|
-
|
|
|
|
-
|
|
Total convertible notes
|
|
|
-
|
|
|
|
8,977
|
|
|
|
|
|
|
|
|
|
|
Less: current portion of convertible notes - related party
|
|
|
-
|
|
|
|
8,977
|
|
Long-term convertible notes
|
|
$
|
-
|
|
|
$
|
-
|
|
During the nine months ended March 31, 2019 and 2018, the Company recognized amortization of discount, included in interest expense, of $0 and $7,587, respectively.
Conversion
During the nine months ended March 31, 2019, the Company converted notes with principal amounts and accrued interest of $10,158 into 101,597,905 shares of common stock. The corresponding derivative liability at the date of conversion of $30,479 was settled through additional paid in capital.
Promissory Notes - Issued in fiscal year 2018
During the year ended June 30, 2018, the Company issued a total of $8,333 note with the following terms:
|
·
|
Terms of 6 months.
|
|
·
|
Annual interest rates of 8%.
|
|
·
|
Convertible at the option of the holders at issuance.
|
|
·
|
Conversion prices are typically based on the discounted (45% discount) average closing prices of the Company’s shares during 20 days prior to conversion.
|
The Company received cash of $8,333.
The Company determined that the conversion feature met the definition of a liability in accordance with ASC Topic No. 815 - 40, Derivatives and Hedging - Contracts in Entity's Own Stock and therefore bifurcated the embedded conversion option once the note becomes convertible and accounted for it as a derivative liability. The fair value of the conversion feature was recorded as a debt discount and amortized to interest expense over the term of the note.
The Company valued the conversion feature using the Black Scholes valuation model. The fair value of the derivative liability for all the notes that became convertible, including the notes issued in prior years, during the year ended June 30, 2018 amounted to $9,371. $8,333 of the value assigned to the derivative liability was recognized as a debt discount to the notes while the balance of $1,038 was recognized as a “day 1” derivative loss.
7. DERIVATIVE LIABILITIES
The Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options.
Fair Value Assumptions Used in Accounting for Derivative Liabilities.
ASC 815 requires we assess the fair market value of derivative liability at the end of each reporting period and recognize any change in the fair market value as other income or expense item.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of March 31, 2019. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note is estimated using the Black-Scholes valuation model.
At March 31, 2019, the estimated fair values of the liabilities measured on a recurring basis are as follows:
|
|
Nine Months Ended
|
|
|
Year Ended
|
|
|
|
March 31,
|
|
|
June 30,
|
|
|
|
2019
|
|
|
2018
|
|
Expected term
|
|
0.24 - 4.04 years
|
|
|
0.04 - 5.00 years
|
|
Expected average volatility
|
|
270% - 683%
|
|
|
147%-488%
|
|
Expected dividend yield
|
|
|
-
|
|
|
|
-
|
|
Risk-free interest rate
|
|
2.21% - 2.94%
|
|
|
0.96%-2.73%
|
|
The following table summarizes the changes in the derivative liabilities during the nine months ended March 31, 2019:
Fair Value Measurements Using Significant Observable Inputs (Level 3)
|
|
|
|
|
|
Balance - June 30, 2018
|
|
$
|
1,016,865
|
|
|
|
|
|
|
Addition of new derivatives recognized as debt discounts
|
|
|
85,000
|
|
Addition of new derivatives recognized as loss on derivatives
|
|
|
302,038
|
|
Settled due to conversion of debt
|
|
|
(734,331
|
)
|
Loss on change in fair value of the derivative
|
|
|
2,137,896
|
|
Balance - March 31, 2019
|
|
$
|
2,807,468
|
|
The aggregate loss on derivatives during the nine months ended March 31, 2019 and 2018 was $2,439,934 and $509,092, respectively.
8. COMMITMENTS AND CONTINGENCIES
Leases and Long term Contracts
The Company has not entered into any long-term leases, contracts or commitments.
Agreements
In December 2016, the Company entered into a contract agreement with M Endeavors, LLC for marketing the services to Doctors office, clinic and hospitals for the term of 5 years. The Agreements shall automatically renew for successive 12-month periods unless otherwise terminated in accordance with the terms of this Agreement. The Company was required to pay a monthly fee of $8,000 and expenses related to this contract. The Company mutually agreed to terminate this agreement. As of March 31, 2019 and June 30, 2018, the Company recorded accrued expenses of $75,000 and $75,000, respectively.
In December 2016, the Company entered into a contract agreement with Big Dreams ventures, LLC for marketing the services to Doctors office, clinic and hospitals for the term of 5 years. The Agreement shall automatically renew for successive 12-month periods unless otherwise terminated in accordance with the terms of this Agreement. The Company was required to pay a monthly fee of $10,000 and expenses related to this contract. The Company mutually agreed to terminate this agreement. As of March 31, 2019 and June 30, 2018, the Company recorded accrued expenses of $105,250 and $105,250, respectively.
On October 2, 2017, the Company entered into an agreement with Pacific Pain & Regenerative Medicine. The Company was required to pay $3,000 per month for a collector in exchange for a minimum of 5 PGX tests per week or 20 per month. During the year ended June 30, 2018, the Company terminated the services and stopped making the monthly payments. As of March 31, 2019 and June 30, 2018, the Company recorded accrued expense of $21,000 and $21,000, respectively.
On October 17, 2017, the Company entered into an agreement of the acquisition financing of up to $30,000,000 (“the “Placement’) with Wellington Shields $ Co. The Company shall pay (i) a success fee equal to 8% of the gross proceeds of the Placement, (ii) 3% of the total Company’s shares outstanding at the time of closing the placement, and (iii) was required to pay $15,000 at the time of signing and $10,000 per month. This engagement agreement terminated at the close of business April 30, 2018. As of March 31, 2019 and June 30, 2018, the Company recorded accrued expense of $60,000 and $60,000, respectively.
Rent
As of January 30, 2013, the Company leases office space at $200 per month with three-month terms, which shall be automatically extended for successive three-month periods unless there is the notice to cancel. The lease can be cancelled at any time by either party with 30 days’ notice prior to expiration of an applicable term. For the nine months ended March 31, 2019 and 2018, the Company incurred $1,869 and $1,863, respectively.
9. SHAREHOLDERS' EQUITY
Series A Preferred Stock
The Company is authorized to issue 60,000,000 shares of Series A Preferred Stock at a par value of $0.0001.
Each Series A preferred share is convertible into 1,500 shares of common stock and has the voting rights of 1,000 shares of common stock.
As at March 31, 2019 and June 30, 2018, 5,000,000 shares of the Company's Series A Preferred Stock were issued and outstanding.
Common Stock
During the nine months ended March 31, 2019, the Company issued 2,572,567,832 shares of common stock as follows;
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2,492,567,832 shares for conversion of debt and accrued interest of $881,419
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50,000,000 shares in conjunction with convertible note for $15,000
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30,000,000 shares exchange for common stock payable
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As at March 31, 2019 and June 30, 2018, 3,813,044,892 and 1,240,477,060 shares of the Company's common stock were issued and outstanding.
Stock payable
The Company had insufficient authorized shares as of June 30, 2017 and as a result, the Company had $105,000 in stock payable for which it is obligated to issue 55,000,000 shares of common stock for consulting services. During the year ended June 30, 2018 the company issued 30,000,000 common shares for cash of $200 and reduced common stock payable by $57,273.
As of March 31, 2019, the Company had $47,727 in stock payable for which it is obligated to issue 25,000,000 shares of common stock for consulting services.
On November 13, 2017, the Company entered into a consulting agreement with a third party for the term of 5 years with a consideration of an issuance of 40,000,000 shares of common stock valued at $20,000. The share shall be issued in two tranches with first tranche of 10,000,000 shares being due at signing of this agreement and an additional 30,000,000 shares are due on the 3 months anniversary of this agreement. During the year ended June 30, 2018, the Company issued 10,000,000 shares with a fair value of $5,000. On February 16, 2019, the Company issued 30,000,000 shares.
10. RELATED PARTY TRANSACTIONS
In March 2016, the Company appointed current CEO and approved a base compensation package of $8,000 per month for CEO. During the nine months ended March 31, 2019 and 2018, the Company paid $4,700 and $0, respectively. As of March 31, 2019, and June 30, 2018, the Company recorded accrued salary of $291,300 and $224,000, respectively.
During the nine months ended March 31, 2019 and 2018, the Company borrowed a total amount of $4,256 and $20,050 from Evergreen Venture Partners LLC (“EVP”), which the CEO is the majority owner, and repaid $9,594 and $6,571, respectively. This loan is a non-interest bearing and due on demand. As of March 31, 2019, and June 30, 2018, the Company owed EVP, a related party $82,749 and $88,087, respectively.
11. SUBSEQUENT EVENTS
Subsequent to March 31, 2019, the Company issued a total of 183,691,200 shares of its restricted common stock for conversion of debt and accrued interest of $14,695.
Subsequent to March 31, 2019, the Company issued 4,750,000 of its restricted preferred stock to its CEO in exchange for $285,000 of accrued compensation.