Convertible Debentures | 4. Convertible Debentures a) On January 23, 2014, the Company issued a $53,000 convertible note which is unsecured, bears interest at 8% per annum and due on October 23, 2014. The Company received $50,000, net of issuance fee of $3,000. The note is convertible into shares of common stock 180 days after the date of issuance (July 22, 2014) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum. On July 22, 2014, the note became convertible resulting in the Company recording a derivative liability of $57,846 with a corresponding adjustment to loss on change in fair value of derivative liabilities of $2,767 as accretion expense. During the year ended December 31, 2014, the Company issued 1,574,830 common shares for the conversion of $45,000 and recorded amortization of $17,663. Pursuant to the agreement, the convertible note matured on October 23, 2014 and 150% of the remaining balance in principal and interest is payable. During the year ended December 31, 2014, the Company included a penalty of $9,000 in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company issued 1,912,000 common shares for the conversion of the remaining $17,000 in principal and $2,120 in accrued interest. As at June 30, 2015, the carrying value of the debenture was $nil (December 31, 2014 - $17,000) and the fair value of the derivative liability was $nil (December 31, 2014 - $22,852). The Company recognized a gain in $3,061 for accrued interest forgiven. b) On March 25, 2014, the Company issued a $53,000 convertible note which is unsecured, bears interest at 8% per annum and due on January 2, 2015. The Company received $50,000, net of issuance fee of $3,000. The note is convertible into shares of common stock 180 days after the date of issuance (September 21, 2014) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum. As at June 30, 2015, accrued interest of $11,104 (December 31, 2014 - $3,264) has been recorded in accounts payable and accrued liabilities. On September 21, 2014, the note became convertible resulting in the Company recording a derivative liability of $55,382 with a corresponding adjustment to loss on change in fair value of derivative liabilities of $303 as accretion expense. Pursuant to the agreement, the convertible note matured on January 2, 2015 and 150% of the remaining balance in principal and interest is payable. As at June 30, 2015, the Company included a penalty of $26,500 (2014 - $nil) in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company issued 9,841,978 common shares for the conversion of $53,000 and $2,120 of accrued interest. During the period ended June 30, 2015, the Company had amortized $1,029 (2014 - $nil) of the debt discount to interest expense. As at June 30, 2015, the carrying value of the debenture was $26,500 (December 31, 2014 - $51,971) and the fair value of the derivative liability was $31,049 (December 31, 2014 - $37,823). During the six months ended June 30, 2015, the Company amortized $21 in financing costs (2014 - $1,028). c) On June 13, 2014, the Company issued a $53,000 convertible note which is unsecured, bears interest at 8% per annum and due on March 17, 2015. The Company received $50,000, net of issuance fee of $3,000. The note is convertible into shares of common stock 180 days after the date of issuance (December 10, 2014) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum. As at June 30, 2015, accrued interest of $10,202 (December 31, 2014 - $2,335) has been recorded in accounts payable and accrued liabilities. On December 10, 2014, the note became convertible resulting in the Company recording a derivative liability of $55,314 with a corresponding adjustment to loss on change in fair value of derivative liabilities of $2,314 as accretion expense. Pursuant to the agreement, the convertible note matured on March 17, 2015 and 150% of the remaining balance in principal and interest is payable. During the period ended June 30, 2015, the Company included a penalty of $26,500 (2014 - $nil) in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company had amortized $41,526 (2014 - $nil) of the debt discount to interest expense. As at June 30, 2015, the carrying value of the debenture was $79,500 (December 31, 2014 - $11,474) and the fair value of the derivative liability was $74,691 (December 31, 2014 - $54,348). During the six months ended June 30, 2015, the Company amortized $823 in financing costs (2014 - $184). d) On June 20, 2014, the Company entered into a consulting agreement for consulting services. Pursuant to the agreement, the Company is to pay the consultant a commencement fee of $250,000. On June 23, 2014, the Company issued a $250,000 convertible note which is unsecured, non-bearing interest and due on June 22, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (December 17, 2014) at a conversion rate of 90% of the lowest closing bid prices of the Company’s common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2015, accrued interest of $1,479 (December 31, 2014 - $nil) has been recorded in accounts payable and accrued liabilities. On December 17, 2014, the note became convertible resulting in the Company recording a derivative liability of $94,188 with a corresponding adjustment to loss on change in fair value of derivative liabilities of $1,050 as accretion expense. Pursuant to the agreement, the convertible note matured on June 22, 2015 and 150% of the remaining balance in principal and interest is payable. During the six months ended June 30, 2015, the Company included a penalty of $125,000 (2014 - $nil) in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company had amortized $88,357 (2014 - $nil) of the debt discount to interest expense. As at June 30, 2015, the carrying value of the debenture was $375,000 (December 31, 2014 - $161,443) and the fair value of the derivative liability was $208,809 (December 31, 2014 - $84,615). e) On June 23, 2014, the Company issued a $50,000 convertible note which is unsecured, bears interest at 8% per annum and due on June 22, 2015. The Company received $49,400, net of issuance fee of $600. The note is convertible into shares of common stock 180 days after the date of issuance (December 20, 2014) at a conversion rate of 60% of the lowest closing bid prices of the Company’s common stock for the five trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2015, accrued interest of $6,164 (December 31, 2014 - $2,093) has been recorded in accounts payable and accrued liabilities. On December 20, 2014, the note became convertible resulting in the Company recording a derivative liability of $49,618 with a corresponding adjustment to loss on change in fair value of derivative liabilities. Pursuant to the agreement, the convertible note matured on June 22, 2015 and 150% of the remaining balance in principal and interest is payable. During the six months ended June 30, 2015, the Company included a penalty of $12,752 (2014 - $nil) in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company issued 2,001,225 common shares for the conversion of $24,495. During the six months ended June 30, 2015, the Company had amortized $46,652 (2014 - $nil) of the debt discount to interest expense. As at June 30, 2015, the carrying value of the debenture was $38,257 (December 31, 2014 - $3,348) and the fair value of the derivative liability was $50,691 (December 31, 2014 - $50,071). During the six months ended June 30, 2015, the Company amortized $285 in financing costs (2014 - $12). f) On June 23, 2014, the Company issued a $50,000 convertible note which is unsecured, bears interest at 8% per annum and due on June 22, 2015. The Company received $49,400, net of issuance fee of $600. The note is convertible into shares of common stock 180 days after the date of issuance (December 20, 2014) at a conversion rate of 60% of the lowest closing bid prices of the Company’s common stock for the five trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2015, accrued interest of $6,164 (December 31, 2014 - $2,093) has been recorded in accounts payable and accrued liabilities. On December 20, 2014, the note became convertible resulting in the Company recording a derivative liability of $49,618 with a corresponding adjustment to loss on change in fair value of derivative liabilities. Pursuant to the agreement, the convertible note matured on June 22, 2015 and 150% of the remaining balance in principal and interest is payable. During the six months ended June 30, 2015, the Company included a penalty of $12,753 (2014 - $nil) in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company issued 2,001,225 common shares for the conversion of $24,495. During the six months ended June 30, 2015, the Company had amortized $46,652 (2014 - $nil) of the debt discount to interest expense. As at June 30, 2015, the carrying value of the debenture was $38,258 (December 31, 2014 - $3,348) and the fair value of the derivative liability was $50,691 (December 31, 2014 - $50,071). During the six months ended June 30, 2015, the Company amortized $285 in financing costs (2014 - $12). g) On June 25, 2014, the Company issued a $50,000 convertible note which is unsecured, bears interest at 8% per annum and due on June 24, 2015. The Company received $49,400, net of issuance fee of $600. The note is convertible into shares of common stock 180 days after the date of issuance (December 22, 2014) at a conversion rate of 60% of the lowest closing bid prices of the Company’s common stock for the five trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2015, accrued interest of $6,309 (December 31, 2014 - $2,071) has been recorded in accounts payable and accrued liabilities. On December 22, 2014, the note became convertible resulting in the Company recording a derivative liability of $49,464 with a corresponding adjustment to loss on change in fair value of derivative liabilities. Pursuant to the agreement, the convertible note matured on June 24, 2015 and 150% of the remaining balance in principal and interest is payable. During the six months ended June 30, 2015, the Company included a penalty of $25,000 (2014 - $nil) in interest expense for the additional amount payable due to defaulting on the loan. During the six months ended June 30, 2015, the Company had amortized $47,244 (2014 – $nil) of the debt discount to interest expense. As at June 30, 2015, the carrying value of the debenture was $75,000 (December 31, 2014 - $2,956) and the fair value of the derivative liability was $92,783 (December 31, 2014 - $50,031). During the six months ended June 30, 2015, the Company amortized $289 in financing costs (2014 - $8). |