7. Short term notes

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

7. Short term notes

7. Short term notes

The Company entered into a Securities Purchase Agreement with JMJ Financial on April 13, 2016, in terms of the agreement the Company borrowed $200,000 in terms of an unsecured convertible promissory note with a maturity date of seven months from the closing date. The principal amount due under the promissory note is $220,000, inclusive of an Original Issue discount and a further 10% once-off interest charge of $20,000 is due in terms of this note. The note is only convertible upon a repayment default, at the lower of $0.03 per share of 60% of the lowest traded price over the preceding 25 day trading period. The Company also issued 3,703,700 warrants exercisable over common shares at $0.03 per share, which warrants contain a cashless exercise option, in terms of the financing arrangement.

Short term notes consist of the following at June 30, 2016:

Description	Interest Rate			Maturity		June 30, 2016
JMJ Financial
Principal		10	%		November 13, 2016		220,000
Accrued interest							7,103
Unamortized debt discount							(59,982	)
							167,121