| NOTE 6 - Convertible Notes | CRDF Global On October 24, 2013, the Company obtained financing
for further research on the first patent that it filed on October 28, 2013, for pure hydrogen production. At the same time, two
hundred and twenty two thousand dollars ($222,000) was paid to CRDF Global (U.S. Civilian Research & Development Foundation)
to manage and facilitate the research. The sum of $200,000 of the $220,000 paid to
CRDF Global has been recorded on the balance sheet as a "prepaid expense". This is advance payment for further research
on the Company's first patent on pure hydrogen production. This financing is in the form of an "Unsecured
Convertible Promissory Note" (the Note). The principle sum is three hundred thousand dollars ($300,000) and carries a simple
interest rate of ten per cent (10%) per annum payable quarterly in arrears. The principle loan can be repaid in whole but not in
part with accrued interest, at any time without penalty on the production of a written notice ten days in advance. The note holder has the option to convert the
principle sum plus any accrued interest into non-assessable common shares of stock at a conversion price of seventy-five per cent
(75%) of the fair market value of the shares, five days prior to the conversion date. Once the conversion has taken place, it is
irrevocable. The Company has recorded a beneficial conversion
feature of $100,000 which will amortize over the life of the loan. As of April 30, 2015, the balance of the unamortized
debt discount was $nil (April 30, 2014 $72,212) and the accrued interest on the "Note" was $87,957 (April 30, 2014-$27,976).
During the year ended April 30, 2015, the Company charged interest expense of $132,192, comprising of accrued interest of $59,981
and amortization of debt discount of $72,211. During year ended April 30, 2014, the Company
charged interest expense of $55,764 comprising accrued interest of $27,976 and amortization of debt discount of $27,788. Anton Group Hill Ltd. #1 On December 20, 2013, the Company issued an
Unsecured Convertible Promissory Note (The "Note") to Anton Group Hill Ltd., or it's permitted assigns in the principle
sum of Twenty Five Thousand Dollars ($25,000). This is a working capital loan which carries a simple interest rate of 10% per
annum payable quarterly in arrears and matures in two (2) years from the date of issue. The principle can be repaid in whole but not
in part with accrued interest, at any time without penalty on the production of a written notice ten days in advance. The "Note" holder has the option
to convert the principle sum plus any accrued interest into no-assessable common shares of stock at a conversion price of seventy-five
per cent (75%) of the fair market value of the shares, five days prior to the conversion date. Once the conversion has taken place,
it is irrevocable. The Company has recorded a beneficial conversion
feature of $8,333 which will amortize over the life of note. At April 30, 2015, the balance of unamortized
debt discount was $nil (April 30, 2014-$6,776) and the accrued interest on the "Note" was $6,510 (April 30, 2014-$1,612).
During the year ended April 30, 2015, the Company charged interest expense of $16,663 comprising accrued interest of $4,898 and
amortization of debt discount of $6,775. During the year ended April 30, 2014, the Company charged interest expense of $3,169,
comprising accrued interest of $1,612 and amortization of debt discount of $1,557. Anton Group Hill Ltd. #2 On February 26, 2014, the Company issued an
Unsecured Convertible Promissory Note (The "Note") to Anton Group Hill Ltd. Or its permitted assigns ("Holder")
in the principle sum of twenty thousand ($20,000), plus simple interest thereon from the date of this note until fully paid at
the rate of ten percent (10%) per annum payable in arrears and matures in two (2) years from the date of issue. Interest on this
"Note" shall be computed on the basis of a 360 day year and a 30 day month. This is a working capital loan. The principle can be repaid in whole but not
in part with accrued interest, at any time without penalty on production of a written notice ten days in advance. The "Note" holder has the option
to convert the principle sum plus any accrued interest into no-assessable common shares of stock at a conversion price of seventy-five
per cent (75%) of the fair market value of the shares, five days prior to the conversion date. Once the conversion has taken place,
it is irrevocable. The Company has recorded a beneficial conversion
feature of $6,667 which will amortize over the life of the note. At April 30, 2015, the balance of unamortized
debt discount was $1,321 (April 30, 2014-$6,091) and the accrued interest on the "Note" was $4,437 (April 30, 2014-$614).
During the year ended April 30, 2015 the Company charged interest expense of $8,594, comprising accrued interest of $3,823 and
amortization of debt discount of $4,771. During the year ended April 30, 2014, the Company charged interest expense of $1,189,
comprising accrued interest of $614 and amortization of debt discount of $575. Anton Group Hill Ltd. #3 On March 18, 2014, the Company issued an Unsecured
Convertible Promissory Note (The "Note") to Anton Group Hill Ltd. Or its permitted assigns ("Holder") in the
principle sum of fifteen thousand ($15,000), plus simple interest thereon from the date of this note until fully paid at the rate
of ten percent (10%) per annum payable in arrears and matures in two (2) years from the date of issue. Interest on this note shall
be computed on the basis of a 360 day year and a 30 day month. This is a working capital loan. The principle can be repaid in whole but not
in part with accrued interest, at any time without penalty on production of a written notice ten days in advance. The "Note" holder has the option
to convert the principle sum plus any accrued interest into no-assessable common shares of stock at a conversion price of seventy-five
per cent (75%) of the fair market value of the shares, five days prior to the conversion date. Once the conversion has taken place,
it is irrevocable. The Company has recorded a beneficial conversion
feature of $5,000 which will amortize over the life of the loan. At April 30, 2015, the balance of unamortized
debt discount was $1,272 (April 30, 2014-$4,706) and the accrued interest on the "Note" was $3,161 (April 30, 2014-$314).
During the year ended April 30, 2015, the Company charged interest expense of 6,281, comprising accrued interest of $2,847 and
amortization of debt discount of $3,434. During the year ended April 30, 2014, the Company charged interest of $314 and amortization
of debt discount of $294. Anton Group Hill Ltd. #4 On April 15, 2014, the Company issued an Unsecured
Convertible Promissory Note (The "Note") to Anton Group Hill Ltd. or its permitted assigns ("Holder") in the
principle sum of fifteen thousand ($15,000), plus simple interest thereon from the date of this note until fully paid at the rate
of ten percent (10%) per annum payable in arrears and matures in two (2) years from the date of issue. Interest on this note shall
be computed on the basis of a 360 day year and a 30 day month. This is a working capital loan. The principle can be repaid in whole but not
in part with accrued interest, at any time without penalty on production of a written notice ten days in advance. The "Note" holder has the option
to convert the principle sum plus any accrued interest into non-assessable common shares of stock at a conversion price of seventy-five
per cent (75%) of the fair market value of the shares, five days prior to the conversion date. Once the conversion has taken place,
it is irrevocable. The Company has recorded a beneficial conversion
feature of $5,000 which will amortize over the life of the note. At April 30, 2015, the balance of unamortized
debt discount was $1,642 (April 30, 2014- $4,897) and the accrued interest on the "Note" was $2,928 (April 30, 2014-$110).
During the year ended April 30, 2015, the Company charged interest expense of $6,073, comprising accrued interest of $2,818 and
amortization of debt discount of $3,255. During the year ended April 30, 2014, the Company charged interest expense of $212, comprising
accrued interest of $110 and amortization of debt discount of $103. LG Capital Funding LLC On June 20, 2014, the Company issued a Convertible
Redeemable Note ("The Note") to LG Capital Funding, LLC., or its permitted assigns ("Holder") in the principle
sum of fifty thousand dollars ($50,000), plus simple interest thereon from the date of this "Note" until fully paid at
the rate of eight percent (8%) per annum payable in arrears and matures in one (1) year from the date of issue. This is a working
capital loan. During the first 180 days that this "Note"
is in effect, it may be prepaid at 150% of the face amount plus any accrued interest. This "Note" may not be prepaid
after the 180 th The "Note" holder has the option
to convert the principle sum plus any accrued interest into non-assessable common shares of stock at a conversion price of fifty-five
per cent (55%) of the lowest daily closing bid , fifteen days prior to the conversion date. Once the conversion has taken place,
it is irrevocable. In the event the Company experiences a DTC "Chill" on its shares, the conversion price shall be decreased
to 45% instead of 55% while that "Chill" is in effect. The Company has recorded a beneficial conversion
feature of $40,909 which will amortize over the life of the "Note". During the year ended April 30, 2015, the note
holder exercised its option to convert $27,500 of the "Note" principle and $1,628 accrued interest and received an aggregate
of 87,445,922 common shares with a fair value of $52,952. As a result of the conversion the Company recorded a loss on conversion
of $23,829 during the year. At April 30, 2015, the balance of unamortized
debt discount was $nil (April 30, 2014-$nil) and the accrued interest on the "Note" was $10,283 (April 30, 2014-$nil).
During the year ended April 30, 2015, the Company charged interest expense of $52,815, comprising accrued interest of $11,906
and amortization of debt discount of $40,909. During the year ended April 30, 2014, the Company charged interest expense of $nil. Auctus Private Equity Fund LLC On July 29, 2014, the Company issued a Convertible
Promissory Note (The "Note") to Auctus Private Equity Fund, LLC, or its permitted assigns ("Holder") in the
principle sum of fifty six thousand, two hundred and fifty dollars ($56,250) , plus simple interest thereon from the date of this
"Note" until fully paid at the rate of eight percent (8%) per annum payable in arrears and matures in nine (9) months
from the date of issue, namely April 29, 2015. This is a working capital loan. This "Note" may not be prepaid in
whole or part without permission of the "Holder" which may be withheld for any or no reason. The "Note" holder has the option
to convert the principle sum and any accrued interest into non-assessable common shares of stock at a conversion price of fifty
five percent (55%) of the lowest daily closing bid, twenty five days prior to the conversion date. One the conversion has taken
place it is irrevocable. In the event that the Company experiences a DTC "Chill" on its shares, the conversion price
shall be subject to a further fifteen percent (15%) discount while the "Chill" is in effect. The Company has recorded a beneficial conversion
feature of $46,023 which will amortize over the life of the "Note". During the year ended April 30, 2015, the "Note"
holder exercised its option to convert $23,037 of the "Note" principal and $2,824 accrued interest and received an aggregate
of 71,022,727 common shares with a fair value of $47,021. As a result of the conversion the Company recorded a loss on conversion
of $21,159 during the year. At April 30, 2015, the balance of unamortized
debt discount was $nil (April 30, 2014-$nil) and the accrued interest on the "Note" was $8,802 (April 30, 2014-$nil).
During the year ended April 30, 2015, the Company charged interest expense of $57,650, comprising accrued interest of $11,626 and
amortization of debt discount of $46,024. During the year ended April 30, 2014 the Company charged interest expense of $nil. Typenex-Co-Investment LLC On August 7, 2014, the Company issued a Secured
Convertible Promissory Note (the "Note") to Typenex Co-Investment, LLC or its permitted assigns ("Holder")
in the principle sum of two hundred and eighty thousand dollars ($280,000). The funds will be disbursed to the Company in five
tranches. They all carry an interest rate on the principle amount of ten percent (10%) which will accrue from the date of issue
of each tranche. The "Note" matures on September 7, 2015. The "Note" carries an Ordinary Issuer Discount of
$25,000, a loan arrangement fee of $5,000 and the Company granted Typenex a share purchase warrant to purchase up to $140,000 of
common stock. An initial tranche of seventy five thousand
dollars ($75,000) was received by the Company on August 7, 2014. The "Note" is secured by all of the
intellectual property held by the company. The "Note" holder has the option
to convert the principle and any accrued interest into no-assessable common shares of stock at a conversion price of sixty five
percent (65%) of the lowest closing bid twenty (20) trading days before the conversion date. Once the conversion has taken place
it is irrevocable. In the event the Company experiences a DTC "Chill" on its shares, the conversion price will be subject
to a further five percent (5%) discount for all future conversions. If any major default occurs after the effective date of the
"Note" then the conversion factor for all future conversions shall automatically be reduced by an additional 5% for each
of the first three (3) major defaults. Commencing on February 7, 2015, and on the
same day of each month thereafter, the Company shall pay the lender an instalment amount equal to $35,000 plus accrued interest.
The instalment may be settled either by cash or the conversion of the "Note" into common stock as noted above. The loan arrangement fee has been expensed
as incurred and the Original Issuer Discount of $25,000 will amortize over the life of the "Note". The Company also
recorded a beneficial conversion feature of $70,000 which will amortize over the life of the "Note". During the year ended April 30, 2015, $45,630
of the principal of the "Note" was converted into common stock resulting in the issuance of 105,100,000 common shares
with a fair value of $76,050. As a result of the conversion the Company recorded a loss conversion of $30, 420 during the year. At April 30, 2015, the balance of the unamortized
debt discount was $18,536 (April 30, 2014-$nil), the accrued interest on the "Note" was $22,127 (April 30, 2014-$nil)
and the balance of unamortized Ordinary Issuer Discount was $1,790. During the year ended April 30, 2015, the Company
charged interest expense of $96,801, comprising accrued interest of $22,127, amortization of debt discount of $51,464 and amortization
of Ordinary Issuer Discount of $23,210. The Company also recorded $275, 300 of loan arrangement fees comprising the cash paid of
$5,000 and the fair value of the share purchase warrant granted of $270, 300. Typenex Share Purchase Warrant disclosure On August 7, 2014, in connection with the issuance
of the Typenex Co-Investment, LLC note payable the Company issued a share purchase warrant whereby the holder could acquire up
to $140,000 of Common stock until August 7, 2019. The exercise price is defined as the lower of $0.008 and Market Price. Market
Price is comprises sixty five percent (65%) of the lowest 3 closing bid prices during the twenty (20) trading days before August
7, 2014. Should the average price of the three lowest bid prices be less than $0.005 then the conversion factor shall be reduced
to 60% of market price. The Company has determined the exercise price is $0.00198 and accordingly a maximum of 70,707,071 common
shares could be issued pursuant exercise of the share purchase warrant. The fair value of the warrants issuable pursuant was determined
as $270,300, which has been expensed as loan arrangement fee A summary of changes in share purchase warrants
for the years ended April 30, 2015 and 2014 respectively are presented below:
YEAR ENDED APRIL 30, 2015 YEAR ENDED APRIL 30, 2014
NUMBER
WEIGHTED AVERAGE EXERCISE PRICE NUMBER
WEIGHTED AVERAGE EXERCISE PRICE
Balance, beginning of period - $ - - $ -
Issued 70,707,071 0.00198 - -
Balance, end of period 70,707,071 $ 0.00198 - $ - As at April 30, 2015, share purchase warrants
were outstanding for the purchase of common shares as follows:
NUMBER OF WARRANTS PRICE PER WARRANT NUMBER EXERCISABLE AT APRIL 30, 2015 EXPIRY DATE
70,707,071 $ 0.00198 70,707,071 August 7, 2019
The fair value of each finder's warrant issued
is estimated on the date of issuance using the Black-Scholes option pricing model with the following weighted average assumptions:
APRIL 30, 2015 APRIL 30, 2014
Risk free interest rate 1.6 % -
Expected life 5 years -
Expected volatility 195 % -
Expected forfeiture - -
Expected dividend yield - -
Fair value of warrants issued $ 0.0038 - JMJ Financial On August 9, 2014, the Company issued a "Convertible
Promissory Note" (the "Note") to JMJ Financial or its permitted assigns ("Holder") in the principle sum
of five hundred thousand dollars (500,000). The funds will be disbursed to the Company as required. Each disbursement will carry
an interest rate on the principle amount of twelve percent (12%) per annum with the first three months interest free. The maturity
date of each disbursement is two (2) years. The "Note" carries an Ordinary Issuer Discount of $50,000, being 10% of the
"Note". The initial payment of forty four thousand dollars ($44,000) was received by the Company on August 13, 2014. The "Note" holder has the option
to convert the principle and any accrued interest into non-assessable common shares of stock, at a conversion price of the lower
of $0.0035 or sixty percent (60%) of the lowest closing bid twenty five (25) trading days before the conversion date. In the event
the conversion shares are not deliverable by Depository Trust Company (DTC), an additional 10% discount shall apply and if the
Company experiences a DTC "Chill" on its shares, the conversion price will be subject to a further five percent (5%)
discount while the "Chill" is in place. The Original Issuer Discount on the first tranche
of $4,000 will amortize over the life of the "Note". The Company recorded a beneficial conversion feature of $29,333
which will amortize over the life of the "Note". During the year ended April 30, 2015, the "Note"
holder exercised its option to convert $43,300 of the "Note" principal and received an aggregate of 153,960 common shares
with a fair value of $72,167. As a result of the conversion the Company recorded a loss on conversion of $28,867 during the year. At April 30, 2015, the balance of unamortized
debt discount was $18,266 (April 30, 2014-$nil), the accrued interest on the "Note" was $8,800 (April 30, 2014-$nil)
and the balance of unamortized Ordinary Issuer Discount was $1,112. During the year ended April 30, 2015, the Company
charged interest expense of $22,755, comprising accrued interest of $8,800, amortization of debt discount of $11,067 and amortization
of Ordinary Issuer Discount of $2,888. During the year ended April 30, 2014, the Company charged interest expense of $nil. |
