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Notes Payable
6 Months Ended
Mar. 31, 2017
Notes Payable:  
Notes Payable

4. Notes Payable

 

(a)   On June 15, 2016, the Company entered into a loan agreement with a non-related party for proceeds up to $400,000. During the year ended September 30, 2016, the Company received proceeds of $303,000 (2015 - $nil) on the loan. The loan is unsecured, bears interest at 2.5%, and is due on or before June 15, 2018. During the period ended March 31, 2017, the Company received additional proceeds of $6,000 and repaid $34,068 to the note. As at March 31, 2017, the principal balance on the note payable is $274,932 (September 30, 2016 - $303,000) and accrued interest of $4,972 (September 30, 2016 - $1,289) has been recorded in accounts payable and accrued liabilities.

 

(b)   On July 18, 2016, the Company entered into a convertible note agreement, as amended, with a non-related party for proceeds of $75,000. The terms of the convertible note became effective on February 15, 2017. The amount owing is secured, bears interest at 10%, is convertible into common shares of the Company, and is due on December 31, 2017. As at March 31, 2017, the carrying value of the note payable is $66,918 (September 30, 2016 - $nil), the unamortized discount on the note is $8,082 (September 30, 2016 - $nil), and accrued interest of $925 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.

 

(c)   On July 18, 2016, the Company entered into a loan agreement, as amended, with a non-related party for proceeds of $121,000. The amount owing is secured, bears interest at 10%, is convertible into common shares of the Company at $0.50 per share, and is due on December 31, 2017. During the year ended September 30, 2016, the Company recorded a beneficial conversion feature of $121,000. During the period ended March 31, 2017, the Company recorded accretion expense of $80,372 (March 31, 2016 - $nil). As at March 31, 2017, the carrying value of the note payable is $93,003 (September 30, 2016 - $32,679), the unamortized discount on the note is $27,997 (September 30, 2016 - $88,321), and accrued interest of $9,316 (September 30, 2016 - $3,282) has been recorded in accounts payable and accrued liabilities.

 

As an incentive for the loan, the Company issued 121,000 cashless warrants to the note holder as a bonus incentive, which has an exercise price of $0.50 per warrant until July 18, 2021. The fair value of the cashless warrants was $229,069, and was calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 239%, and risk-free rate of 1%.

 

(d)   On September 28, 2016, the Company entered into a loan agreement, as amended with a non-related party for proceeds up to $550,000. On September 30, 2016, the Company received proceeds of $110,000, net of issuance fees of $10,000. The amount owing is secured, bears interest at 10%, and is due on December 31, 2017, and is convertible into common shares of the Company at $0.10 per share. During the year ended September 30, 2016, the Company recorded a beneficial conversion feature of $110,000. As at March 31, 2017, the carrying value of the note payable is $49,952 (September 30, 2016 - $nil), the unamortized discount on the note is $60,048 (September 30, 2016 - $110,000), and accrued interest of $5,485 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.

 

As an incentive for the loan, the Company issued 121,000 cashless warrants to the note holder as a bonus incentive, which has an exercise price of $0.50 per warrant until September 30, 2021. The fair value of the cashless warrants was $65,990, and was calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 233%, and risk-free rate of 1%.

 

(e)   On February 16, 2017, the Company entered into a loan agreement with a non-related party for proceeds up to $250,000. On February 16, 2017, the Company received proceeds of $32,428, net of issuance fees of $2,948. On February 24, 2017, the Company received proceeds of $77,000, net of issuance fees of $7,000. The aggregate principal amount owed of $109,428 is secured, bears interest at 10%, is due on February 17, 2018, and is convertible into common shares of the Company at $0.10 per share. During the period ended March 31, 2017, the Company recorded a beneficial conversion feature of $109,428. As at March 31, 2017, the carrying value of the note payable is $12,592 (September 30, 2016 - $nil), the unamortized discount on the note is $96,836 (September 30, 2016 - $nil), and accrued interest of $1,141 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.