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4. LOANS PAYABLE

12 Months Ended

Dec. 31, 2014

As at December 31, 2014, the Company had the following loans payable:

	i)	$5,000: unsecured; interest at 15% per annum; due on April 20, 2012.
	ii)	$75,000: unsecured; interest at 10% per annum; due on August 2, 2011.

	iii)	$34,160: unsecured; interest at 5% per annum; with no specific terms of repayment.
	iv)	$24,696: unsecured; non-interest bearing; with no specific terms of repayment.

	v)	$100,000: unsecured; non-interest bearing; with no specific terms of repayment.
	v)	$1,767: unsecured; non-interest bearing; with no specific terms of repayment.

vi)

$4,310: unsecured; non-interest bearing; with no specific terms of repayment.

As at December 31, 2013, the Company had the following loans payable:

	i)	$5,000: unsecured; interest at 15% per annum; due on April 20, 2012.
	ii)	$75,000: unsecured; interest at 10% per annum; due on August 2, 2011.

	iii)	$1,642: unsecured; non-interest bearing; with no specific terms of repayment.
	iv)	$8,979: unsecured; non-interest bearing; with no specific terms of repayment.

As of December 31, 2014, interest totaling $30,244 (2013 - $21,110) was accrued on loan amounts.

On March 19, 2015, $4,000 was paid by the Company in partial settlement of the $5,000 loan. The balance of principal and interest, totaling $3,791 at December 31, 2014 remains outstanding.

The other loan balances remain outstanding to date and the Company intends to renegotiate repayment terms with the lenders.

An agreement in principle was reached on March19, 2015 whereby the terms of the $75,000 loan are to be modified as follows:

a)

$26,750, which is the agreed interest accrued to January 9, 2015 together with a premium, will be converted to Company shares at a price of $0.05 per share, equaling 535,000 common shares.

b)

One-half of the outstanding Principal, or $37,500, and any interest accrued from January 10, 2015 shall become due and payable on written demand in full on the earlier of June 9, 2015 or the date on which the Borrower completes one or more debt or equity financings that generate aggregate gross proceeds to the Borrower of at least $250,000.

c)

The balance of the outstanding Principal, or $37,500, and any accrued interest shall become due and payable on written demand in full on January 9, 2016.

d)

The Company shall have the right to repay all or any part of the Principal and any accrued interest to the Lender at any time and from time to time, without any premium.

On January 9, 2015, agreements in principle were reached in connection with the loans of $24,696 (CAD $28,650) and $1,767 (CAD $2,050) whereby the loan amounts are to be converted to Company shares at a price of $0.05 CAD, to result in the issuance of 573,000 and 41,000 common shares respectively.

No shares have been issued to date in connection with the three loan settlement agreements above.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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