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CONVERTIBLE NOTES PAYABLE
6 Months Ended
Jan. 31, 2021
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

NOTE 6 – CONVERTIBLE NOTES PAYABLE


On June 25, 2015, the Company issued a Convertible Promissory Note (“New Note”) to an investor for $399,832. The New Note succeeds two notes issued originally in September 2006, and it superseded the terms of the September 2006 Notes pursuant to an agreement dated June 25, 2015. Terms of the New Note provide for a conversion option into common shares at a discount of 20% off-market, a weighted average interest rate of approximately 7% annual interest (payable to investor), and an original maturity date of June 25, 2016; renewable by investor. As of July 31, 2020 and 2019, the New Note was in default. The New Note was re-issued in November 2020 with a new maturity date in 2021 (see Note 11). The balance of the New Note as of July 31, 2020 and 2019 was $399,832 at the end of both periods, respectively. On December 7, 2020 an agreement was reached that a new Company note, in which $399,832 of principal and $173,400 of interest would be combined. On December 16, 2020, the Company issued the Note in the principal amount of $573,232 to MACA. The Note bears interest at the rate 8% per annum and matures on December 16, 2023. Any amount of principal or interest on the Note that is not paid when due bears interest at the rate of 22% per annum. Pursuant to the terms of the Note, MACA has the right from time to time, and at any time during the period beginning on the date which is 180 days following December 16, 2020 and ending on the later of (i) the maturity date and (ii) the date of payment of the Default Amount (as defined in the Note), each in respect of the remaining outstanding amount of the Note to convert all or any part of the outstanding and unpaid amount of the Note into fully paid and non-assessable shares of the Company’s common stock, subject to, among other things, a 4.99% equity blocker. See Note 11for additional information regarding these Notes.


This New Note of $573,232 had an annual interest rate of 8% and a due date of December 16, 2023. Derivative gain (expense) and corresponding liability associated to the New Note was $1,111 and ($173,400) for the six months ending and as of January 31, 2021 and 2020, respectively. Interest expense incurred for the six months ending January 31, 2021 and July 31, 2020 on the New Note was $7,039 and $-0-, respectively.


On July 31, 2020 the Company entered into a Convertible Promissory Note with an investor in exchange for $40,573 cash consideration advanced incurred during the twelve months ended July 31, 2020 for operating expenses incurred during the period. Terms of the Convertible Promissory Note provide for a conversion option into common shares to the investor at a 20% discount off market, an 8% annual interest payable to investor, and a final maturity date of July 31, 2021; renewable by the lender. Balance of the Convertible Promissory Note as of January 31, 2021 and 2020 was $12,013 and $ -0-, respectively. Derivative expense and corresponding liability associated to this Convertible Promissory Note agreement was $40,573 and $0 for the six months ending and as of January 31, 2021 and 2020, respectively. Interest expense incurred during the six months ended January 31, 2021 and 2020 on the Convertible Promissory Note was $18,849 and $19,123 respectively.


During the six month period ending January 31, 2021, the Company was advanced approximately $79,433 by related parties. The advances were used to pay various operating expenses during this period. At January 31, 2021 and 2020, outstanding advances payable were $79,433 and $-0-, respectively.