CONVERTIBLE DEBENTURES | Current Convertible Debentures: Conversion Feature Issuance Net Principal ($) Discount ($) Carrying Value ($) Interest Rate Maturity Date a ) 2-Apr-13 5,054 - 5,054 0 % 2-Jan-14 d ) 5-Aug-15 474,900 - 474,900 7 % 5-Feb-17 d ) 5-Aug-15 18,750 - 18,750 7 % 5-Feb-17 c ) 17-Feb-15 102,135 - 102,135 8 % 17-Feb-16 b ) 17-Feb-15 5,000 - 5,000 8 % 17-Feb-16 b ) 27-Feb-15 37,500 - 37,500 8 % 27-Feb-16 b ) 19-Mar-15 53,551 - 53,551 8 % 19-Mar-16 b ) 19-Mar-15 8,000 - 8,000 8 % 19-Mar-16 b ) 11-May-15 50,000 - 50,000 8 % 11-May-16 b ) 2-Jun-15 29,500 - 29,500 8 % 2-Jun-16 b ) 2-Jun-15 45,966 - 45,966 8 % 2-Jun-16 b ) 2-Jun-15 10,000 - 10,000 8 % 2-Jun-16 b ) 2-Jun-15 58,540 - 58,540 8 % 2-Jun-16 b ) 2-Jun-15 35,408 - 35,408 8 % 2-Jun-16 b ) 2-Jun-15 20,758 - 20,758 8 % 2-Jun-16 c ) 11-Jun-15 50,000 - 50,000 8 % 27-Mar-16 b ) 19-Jun-15 30,464 - 30,464 8 % 19-Jun-16 b ) 19-Jun-15 30,000 - 30,000 8 % 19-Jun-16 b ) 19-Jun-15 35,408 - 35,408 8 % 19-Jun-16 b ) 24-Jun-15 37,500 - 37,500 8 % 27-Feb-16 b ) 24-Jun-15 35,000 - 35,000 8 % 12-Feb-16 b ) 24-Jun-15 37,500 - 37,500 8 % 12-Mar-16 b ) 7-Jul-15 75,000 - 75,000 8 % 7-Oct-15 b ) 1-Aug-15 17,408 - 17,408 8 % 4-Aug-16 b ) 1-Aug-15 30,000 - 30,000 8 % 1-Aug-16 b ) 1-Aug-15 35,408 - 35,408 8 % 1-Aug-16 b ) 21-Sep-15 64,744 - 64,744 8 % 21-Sep-16 b ) 3-May-16 50,000 - 50,000 8 % 3-May-17 b ) 3-May-16 50,000 - 50,000 8 % 11-May-16 b ) 3-May-16 29,500 - 29,500 8 % 2-Jun-16 b ) 3-May-16 45,965 - 45,965 8 % 2-Jun-16 b ) 24-May-16 61,571 - 61,571 8 % 24-May-17 b ) 24-May-16 30,464 - 30,464 8 % 19-Jun-16 b ) 26-May-16 157,500 - 157,500 8 % 26-May-17 b ) 15-Jun-16 5,000 - 5,000 8 % 15-Jun-17 d ) 3-Jun-16 160,000 - 160,000 7 % 8-Sep-17 d ) 3-Jun-16 4,000 - 4,000 7 % 8-Sep-17 d ) 15-Jun-16 50,000 - 50,000 7 % 8-Sep-17 d ) 15-Jun-16 1,250 - 1,250 7 % 8-Sep-17 d ) 17-May-16 100,000 - 100,000 7 % 8-Sep-17 d ) 17-May-16 2,500 - 2,500 7 % 8-Sep-17 d ) 20-May-16 110,000 - 110,000 7 % 8-Sep-17 d ) 20-May-16 2,750 - 2,750 7 % 8-Sep-17 d ) 27-Jan-16 250,000 - 250,000 7 % 27-Jul-17 d ) 8-Mar-16 110,000 - 110,000 7 % 8-Sep-17 d ) 27-Jan-16 18,750 - 18,750 7 % 27-Jul-17 d ) 8-Mar-16 5,000 - 5,000 7 % 8-Sep-17 d ) 8-Mar-16 90,000 - 90,000 8 % 8-Sep-17 b ) 8-Jul-16 50,000 - 50,000 7 % 8-Sep-17 b ) 4-Aug-16 110,000 - 110,000 7 % 8-Sep-17 d ) 15-Aug-16 157,000 - 157,000 7 % 8-Sep-17 d ) 12-Sep-16 83,000 - 83,000 7 % 8-Sep-17 d ) 8-Jul-16 1,250 - 1,250 7 % 8-Sep-17 d ) 4-Aug-16 2,750 - 2,750 7 % 8-Sep-17 d ) 15-Aug-16 3,925 - 3,925 7 % 8-Sep-17 d ) 12-Sep-16 2,075 - 2,075 7 % 8-Sep-17 d ) 4-Aug-16 110,000 - 110,000 8 % 4-Aug-17 b ) 15-Aug-16 157,500 - 157,500 8 % 15-Aug-17 b ) 8-Sep-16 80,000 - 80,000 8 % 8-Sep-17 b ) 11-Nov-16 80,000 - 80,000 8 % 11-Nov-17 b ) 5-Dec-16 88,000 - 88,000 8 % 5-Dec-17 b ) 9-Jan-17 84,000 - 84,000 8 % 6-Jan-18 b ) 13-Mar-17 32,000 - 32,000 8 % 13-Mar-18 c ) 2-Feb-17 90,198 - 90,198 8 % 2-Feb-18 c ) 15-Mar-17 96,000 - 96,000 8 % 15-Mar-18 d ) 7-Oct-16 465,000 - 465,000 7 % 7-Apr-18 d ) 7-Nov-16 295,000 - 295,000 7 % 7-May-18 d ) 12-Dec-16 295,000 - 295,000 7 % 12-Jun-18 d ) 18-Jan-17 295,000 - 295,000 7 % 7-Apr-18 b ) 7-Apr-17 25,000 - 25,000 8 % 7-Apr-18 b ) 3-May-17 27,000 - 27,000 8 % 3-May-18 c ) 5-May-17 30,000 - 30,000 8 % 5-May-18 b ) 2-Jun-17 27,000 - 27,000 8 % 2-Jun-18 s) d ) 21-Jul-17 790,965 - 793,858 10 % 21-Jul-18 s) d ) 14-Aug-18 30,000 27,107 2,893 10 % 31-Dec-18 s) d ) 21-Jul-17 24,000 - 790,965 10 % 21-Jul-18 6,299,407 27,107 6,272,300 a) The conversion price per share equal to the lower of: i. 100% of the average price of the Company’s common stock for the 5 trading days preceding the conversion date; ii. 70% of the daily average price of the Company’s common stock for the 10 trading days preceding the conversion date. b) The conversion price is equal to 50% of the lowest closing bid price of the Company’s common stock for the 15-20 trading days preceding the conversion date subject to a maximum conversion price ranging from $0.0005-$0.05. c) The conversion price equal to 50% of the lowest closing bid price of the Company’s common stock in the 20-25 trading days prior to the conversion. d) The conversion price is fixed ranging from $0.0003 - $0.0078. s) Convertible debenture is secured During the nine months ended September 30, 2018, the Company received net proceeds from convertible debentures of $310,965 (2017: $979,770). During the nine months ended September 30, 2018, $60,300 (2017: $620,336) of convertible debentures were settled by issuing 543,000,000 (2017: 1,899,157,030) shares of common stock of the Company. During the nine months ended September 30, 2018, the Company incurred $255 (2017: $90,250) in transaction costs in connection with the issuance of the convertible debentures that have been offset against the carrying values of the related debentures on the issuance date. During the nine months ended September 30, 2018, the Company incurred $1,874,931 (2017: $2,714,869) in accretion and interest expense in connection with the convertible debentures. At September 30, 2018, convertible debentures with the principal amount of $6,299,407 are subject to a General Security Agreement covering substantially all of the Company’s assets. The Company has evaluated whether separate financial instruments with the same terms as the conversion features above would meet the characteristics of a derivative instrument as described in paragraphs ASC 815-15-25. The terms of the contracts do not permit net settlement, as the shares delivered upon conversion are not readily convertible to cash. The Company’s trading history indicated that the shares are thinly traded and the market would not absorb the sale of the shares issued upon conversion without significantly affecting the price. As the conversion features would not meet the characteristics of a derivative instrument as described in ASC 815-15-25, the conversion features are not required to be separated from the host instrument and accounted for separately. As a result, at September 30, 2018 the conversion features and non-standard anti-dilution provisions would not meet derivative classification. Convertible debentures with maturity dates prior to September 30, 2018 are now due on demand. |