DISASTER DISASTER In May 2020, we issued $350,000 in principal amount of new convertible notes (which we refer to as the “2020 Fixed Rate Convertible Notes”). As of June 30, 2020, $350,000 (approximately $55,000 net of unamortized deferred loan costs and unamortized beneficial conversion) of 2020 Fixed Rate Convertible Notes were outstanding. The 2020 Fixed Rate Convertible Notes accrue interest at 10% per annum, are convertible into shares of our common stock at a price of $0.005 per share, mature twelve months after issuance and are unsecured. The proceeds from the 2020 Fixed Rate Convertible Notes were used to repay approximately $285,000 of Variable Rate Convertible Notes more fully described below. When issued in May 2020, the 2020 Fixed Rate Convertible Notes had an initial conversion rate below the trading price of the Company’s common stock creating a beneficial conversion feature (“BCF”), which exceeded the total cash proceeds received from its issuance. Accordingly, the BCF was recorded as a debt discount and additional paid-in capital of $300,000. The debt discount is being amortized over the one-year term of the note.
