On July 30, 2018, the Company entered into a binding loan agreement and promissory note with William Matlack, a significant shareholder and a director as of October 29, 2019, (the “Lender”). Under the loan agreement, the Lender loaned the Company $300,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on January 20, 2020, but may be repaid early without penalty. Pursuant to the terms of the loan agreement, the Company issued to the Lender 3,265,500 non-transferrable Series F Warrants to purchase common shares of the Company. The exercise price of the warrants is $0.09, and the warrants contain a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Company’s outstanding common shares. The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $110,900, based upon a total fair value as calculated by a Black-Scholes option-pricing model. The relative fair value of the warrants was recorded as a discount of the note. At September 30, 2019, the note payable was $274,889, which is net of the unamortized discount of $25,111.

On October 4, 2019, the Company entered into an agreement with the note holder to extend the due date of the note for a period of three years to mature on January 20, 2023 on the same terms as the original note. The Series F Warrants were cancelled and replaced with 3,750,000 warrants of a new series designation with expiration at February 1, 2023 and an exercise price of $0.08, the fair value at the date of issuance. As a result of the extension of the due date, this note has been included in long-term debt on the Company’s consolidated balance sheet.

On May 8, 2019, the Company entered into an additional binding loan agreement and promissory note with William Matlack (the “Lender”). Under the loan agreement, the Lender loaned the Company $250,000 in the form of a senior unsecured note, with the principal bearing interest at an annual rate of 18%, compounded monthly. The loan is unsecured and the principal and accrued interest will become due for repayment on November 7, 2020, but may be repaid early without penalty.

Pursuant to the terms of the May 8, 2019 loan agreement, the Company issued to the Lender 3,543,600 non-transferrable Series I Warrants to purchase common shares of the Company. The exercise price of the warrants is $0.07, with a term of eighteen months, and the warrants contain a provision restricting their exercise in the event any such exercise would cause the Lender to own 10% or more of the Company’s outstanding common shares.

The relative fair value of the warrants issued in connection with the senior unsecured note was estimated at $94,300, based upon a total fair value as calculated by a Black-Scholes option-pricing model. The relative fair value of the warrants was recorded as a discount of the note, with $21,666 amortized to interest expense in the year ended September 30, 2019. At September 30, 2019, the note payable was $177,366, which is net of the unamortized discount of $72,634.

	Warrants Issued During the Year Ended September 30, 2019	Warrants Issued During the Year Ended September 30, 2018
Expected volatility	138.5%	132.4%
Stock price on date of the note	$0.07	$0.09
Exercise price	$0.07	$0.24
Expected dividends	-	-
Expected term (in years)	.51.5	.51.5
Risk-free rate	2.26%	2.66%
Expected forfeiture rate	0%	0%

The amortization of discounts was $100,121 and $7,332 for the years ended September 30, 2019 and 2018, respectively. The accrued interest on the senior unsecured notes payable was $83,107 and $5,346 at the years ended September 30, 2019 and 2018, respectively.

The senior unsecured notes payable are senior to all other debt with the exception of the Payment obligation. The notes require that when the Company enters into any other financings, 25% of the proceeds of such financings will be paid toward reduction of the principal and interest accrued on these notes. No such payments have been made by the Company to the Lender, and the Lender has provided a waiver of default on the Notes that would otherwise exist due to these non-payments.