Convertible Debt

6 Months Ended

Jan. 31, 2016

4.	CONVERTIBLE DEBT

On August 22, 2013 the Company entered into a $50,000 Convertible Loan Agreement with an un-related party. The Loan is convertible into Units at $0.10 per Unit with each Unit consisting of one common share of the Company and ½ warrant with each full warrant exercisable for 1 year to purchase 1 common share at $0.30 per share. The Loan shall bear interest at the rate of Eight Percent (8%) per annum, payable on maturity, calculated on the principal amount of the Loan outstanding.

On July 10, 2014, a further $35,000 was received by the same unrelated party under the same terms.

The Company may require the Lender, at any time following the date that the closing price of the Shares as listed on a Principal Market, as quoted by Bloomberg L.P. (the “Closing Price”) has been at or above $0.40 for a period of twenty consecutive trading days, to exercise the Warrants and acquire the Shares at the Conversion Price. The Lender must exercise the Warrants in accordance with Section 2.6(e) within five (5) business days of the receipt of notice from the Company, after which time the Warrants shall be cancelled if unexercised. As used herein, “Principal Market” shall mean the OTC Bulletin Board, the Nasdaq SmallCap Market, or the American Stock Exchange. If the Common Shares are not traded on a Principal Market, the Closing Price shall mean the reported Closing Price for the Common Shares, as furnished by FINRA for the applicable periods.