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4. Convertible Notes Payable
9 Months Ended
Jun. 30, 2017
Notes  
4. Convertible Notes Payable

4.     Convertible Notes Payable

 

(a)   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 at $0.24 per share, and is due on December 31, 2017. As at June 30, 2017, the carrying value of the note payable is $69,592 (September 30, 2016 - $nil), the unamortized discount on the note is $5,408 (September 30, 2016 - $nil), and accrued interest of $1,870 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.

 

(b)   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. As at June 30, 2017, the carrying value of the note payable is $102,267 (September 30, 2016 - $32,679), the unamortized discount on the note is $18,733 (September 30, 2016 - $88,321), and accrued interest of $12,332 (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%.

 

(c)   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 June 30, 2017, the carrying value of the note payable is $69,822 (September 30, 2016 - $nil), the unamortized discount on the note is $40,178 (September 30, 2016 - $110,000), and accrued interest of $8,227 (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%.

 

(d)   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. On April 17, 2017, the Company received proceeds of $13,750, net of issuance fees of $1,250. On April 26, 2017, the Company received proceeds of $88,000, net of issuance fees of $8,000. On June 13, 2017, the Company received proceeds of $38,822 net of issuance fees of $3,882. The aggregate principal amount owed of $250,000 is secured, bears interest at 10%, is due one year after the date of funding for each tranche, and is convertible into common shares of the Company at $0.10 per share. During the period ended June 30, 2017, the Company recorded a beneficial conversion feature of $236,978. As at June 30, 2017, the carrying value of the note payable is $72,342 (September 30, 2016 - $nil), the unamortized discount on the note is $177,658 (September 30, 2016 - $nil), and accrued interest of $5,935 (September 30, 2016 - $nil) has been recorded in accounts payable and accrued liabilities.