Convertible Promissory Notes

3 Months Ended

Apr. 30, 2017

Debt Disclosure [Abstract]

Convertible Promissory Notes

NOTE 8 – Convertible promissory notes

Following is a summary of convertible promissory notes:

	April 30, 2017			January 31, 2017
12% convertible note payable issued December 2016, due December 2017	$	34,457		$	33,467
12% convertible note payable issued February 2017, due February 2018		79,177			—
12% convertible note payable issued April 2017, due January 2018		50,312			—
		163,946			33,467
Less debt discount		(9,119	)		(2,646	)
Less current portion of convertible notes		(154,827	)		(30,821	)
Long-term convertible notes payable	$	—		$	—

On December 14, 2016, we entered into a convertible promissory note (the “December 2016 Note”) to Tangiers Investment Group, LLC (“Tangiers”) for a principal sum of up to $110,000, bearing interest at 12% per annum. The consideration is up to $100,000, which would produce an original issue discount of $10,000 if all the consideration is received. The lender paid $30,000 pursuant to the terms of the December 2016 Note on December 19, 2016, which resulted in the Company recording a $3,000 original issue discount. The maturity date is one year from the effective date of each payment, as well as any unpaid interest and other fees. The December 2016 Note may be convertible into shares of common stock of our company after 180 days of funding at a conversion price of 62.5% of the volume weighted average price of the Company’s common stock during the five trading days previous to the conversion. We may repay the December 2016 Note at any time before 150 days from the effective date of the December 2016 Note, or prepay at 130% of the principal from 151 to 180 days, after which we may not make any further payments on the December 2016 Note prior to the maturity date without written approval from the lender. As of January 31, 2017, we had of $33,467 of principal and interest outstanding for the December 2016 Note. As of April 30, 2017, we had of $34,457 of principal and interest outstanding for the December 2016 Note.

On February 2, 2017, the Company and Tangiers entered into Amendment #1 to the December 2016 Note (“Amendment #1”). Amendment #1 provides that, on or before February 2, 2017, Tangiers would make a payment to the Company of $77,000, which includes a 10% OID. The net proceeds of $70,000 were received on February 2, 2017. The maturity date is February of 2018.

Also on February 2, 2017, the Company and Tangiers entered into Amendment #2 to the December 2016 Note (“Amendment #2”). Amendment #2 provides that the conversion price under the Note is equal to 60% of the lowest trading price of the Company’s common stock during the 20 consecutive trading days prior to Tangier’s conversion election. The default percentages of 5% and 10% of the discount of conversion price point remained the same other than reflecting the amended discount price. In addition, the provision in the Note relating to a right of first refusal was removed by Amendment #2. As of April 30, 2017, we had of $79,177 of principal and interest outstanding

On April 11, 2017, we received proceeds of $48,000, net of a $2,000 fee, under a convertible promissory note dated April 10, 2017 (the “April 2017 Note”). The total principal under the April 2017 Note is $50,000, bears interest at 12% per annum, is due on January 10, 2018, and is convertible in shares of the Company’s common stock after 180 days at a conversion price with a 45% discount to the lowest weighted average market price during the previous 20 trading days to the date of conversion. As of April 30, 2017, we had of $50,312 of principal and interest outstanding

During the three months ended April 30, 2017 and 2016, the Company recorded debt discounts of $0 and $62,160, respectively, due to the derivative liabilities, and original issue debt discounts of $9,000 and $5,000, respectively, due to the convertible notes. The Company recorded amortization of these discounts of $2,527 and $66,605 for the three months ended April 30, 2017 and 2016, respectively.