| CONVERTIBLE NOTES PAYABLE | NOTE
7 – CONVERTIBLE NOTES PAYABLE On
October 17, 2017, the Company entered into a financing arrangement in the principal amount of $445,000 consisting of a convertible
promissory note and warrants to purchase common shares of the company. As of October 31, 2018, the company has borrowed $225,000
of the available balance of $ 445,000. The outstanding principal of the Note bears interest at the rate of 10% per annum and is
due July 17, 2018. An original debt discount in the amount of $ 25,000 on the issuance of the note and will be amortized over
the life of the note. The
Note is convertible at the option of the holder into common stock of the Company at a conversion price of $0.25 per share. A debt
discount related to the fixed rate conversion feature in the amount of $66,442 was recorded and is being amortized over the life
of the note. In addition, the holder of the note received warrants to purchase shares of the Company’s common stock
equal to $225,000 divided by the market value of the shares on the date the financing arrangement was entered into. Upon issue,
the Company recorded derivative liabilities for the conversion feature of the convertible notes and warrants, based up on the
Binomial Fair Value Model and using the following assumptions: an exercise price of $0.25, our stock price on the date of grant
$.126 expected dividend yield of 0%, expected volatility of 251.50, risk free interest rate of 1.25 for notes payable and 1.97%
for warrants and an expected term of 0.75 years for notes payable and 5 years for warrants. Upon initial valuation, the derivative
liability of $168,573 was recorded as a debt discount which is being amortized over the life of the note payable. The
note payable is currently in default. As a result the lender is entitled to increase the interest rate on the note to 22% and
to increase the conversion eligible amount of the note by 15% for each major default. As
of October 31, 2018 the derivative liability associated with the note payable and the warrants are $ 0 and the balance of debt
discount is $ 0. On
January 17, 2018, the Company issued a convertible note payable the principal amount of $165,000. Principal of the Note bears
interest at the rate of 8% per annum and is due January 17, 2019. An original debt discount in the amount of $ 9,000 on the issuance
of the note and will be amortized over the life of the note. The
Note is convertible at the option of the holder into common stock of the Company at a conversion price he lesser of the trading
price of the common stock on the trading day prior to the closing date of the note or 50% of the lowest trading or closing bid
for the common stock during the 20 trading day period immediately prior to conversion.. Upon issue, the Company recorded derivative
liabilities for the conversion feature of the convertible notes and warrants, based up on the Binomial Fair Value Model and using
the following assumptions: an exercise price of $0.052, our stock price on the date of grant $.024, expected dividend yield of
0%, expected volatility of 113.400, risk free interest rate of 1.79 for notes payable, and remaining term of 1.00 year. Upon initial
valuation, the derivative liability of $156,000 was recorded as a debt discount which is being amortized over the life of the
note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 297,793 and there is an
unamortized balance of debt discount of $ 34,375. On
January 22, 2018, the Company issued a convertible note payable the principal amount of $165,000. Principal of the Note bears
interest at the rate of 12% per annum and is due October 22, 2018. The
“Conversion Price” will be the lesser of (i) the lowest trading price of our common stock during the twenty-five-day
trading period prior to the issue date of the Note and (ii) 50% of the lowest trading price of our common stock during the twenty-five-day
trading period prior to the conversion. Upon issue, the Company recorded derivative liabilities for the conversion feature of
the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following assumptions: an exercise
price of $0.037, our stock price on the date of grant $.079, expected dividend yield of 0%, expected volatility of 113.400, risk
free interest rate of 1.79 for notes payable, and remaining term of .75 year. Upon initial valuation, the derivative liability
of $165,000 was recorded as a debt discount which is being amortized over the life of the note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 297,793 and there is an
unamortized balance of debt discount of $ 34,375. On
May 8, 2018, the Company issued a convertible note payable the principal amount of $125,000. Principal of the Note bears interest
at the rate of 8% per annum and is due January 8, 2019. The
“Conversion Price” will be the lesser of (i) the lowest trading price of our common stock during the twenty-five-day
trading period prior to the issue date of the Note and (ii) 50% of the lowest trading price of our common stock during the twenty-five-day
trading period prior to the conversion. Upon issue, the Company recorded derivative liabilities for the conversion feature of
the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following assumptions: an exercise
price of $0.024, our stock price on the date of grant $.05, expected dividend yield of 0%, expected volatility of 137.100, risk
free interest rate of 2.44 for notes payable, and remaining term of .75 year. Upon initial valuation, the derivative liability
of $125,000 was recorded as a debt discount which is being amortized over the life of the note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 225,674 and there is an
unamortized balance of debt discount of $ 48,611. On
May 10, 2018, the Company issued a convertible note payable the principal amount of $125,000. Principal of the Note bears interest
at the rate of 12% per annum and is due January 9, 2019. The
“Conversion Price” will be the lesser of (i) the lowest trading price of our common stock during the twenty-five-day
trading period prior to the issue date of the Note and (ii) 50% of the lowest trading price of our common stock during the twenty-five-day
trading period prior to the conversion. Upon issue, the Company recorded derivative liabilities for the conversion feature of
the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following assumptions: an exercise
price of $0.024, our stock price on the date of grant $.05, expected dividend yield of 0%, expected volatility of 137.100, risk
free interest rate of 2.44 for notes payable, and remaining term of .75 year. Upon initial valuation, the derivative liability
of $125,000 was recorded as a debt discount which is being amortized over the life of the note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 225,674 and there is an
unamortized balance of debt discount of $ 48,611. On
August 1, 2018, Drone Guarder, Inc., a Nevada corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased
a convertible promissory note evidencing a loan of $153,000. On August 1, 2018, the Company issued Power Up a convertible note
totaling $153,000 (the “Power Up Note”). The Power Up Note entitles the holder to 12% interest per annum and matures
on May 15, 2019. Power
Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day
period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert
the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of
4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates.
The beneficial ownership limitation may not be waived by Power Up. Upon issue, the Company recorded derivative liabilities for
the conversion feature of the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following
assumptions: an exercise price of $0.0143, our stock price on the date of grant $.022, expected dividend yield of 0%, expected
volatility of 131.300, risk free interest rate of 2.16 for notes payable , and remaining term of .80 year. . Upon initial valuation,
the derivative liability of $149,884 was recorded as a debt discount which is being amortized
over the life of the note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $204,305 and there is an
unamortized balance of debt discount of $ 99,923. On
August 29, 2018, Drone Guarder, Inc., a Nevada corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased
a convertible promissory note evidencing a loan of $78,000. On August 29, 2018, the Company issued Power Up a convertible note
of $78,000 (the “Power Up Note”). The Power Up Note entitles the holder to 12% interest per annum and matures on June
19, 2019. Power
Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day
period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert
the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of
4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates.
The beneficial ownership limitation may not be waived by Power Up. Upon issue, the Company recorded derivative liabilities for
the conversion feature of the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following
assumptions: an exercise price of $0.0117, our stock price on the date of grant $.018, expected dividend yield of 0%, expected
volatility of 131.300, risk free interest rate of 2.16 for notes payable , and remaining term of .80 year. . Upon initial valuation,
the derivative liability of $76,411 was recorded as a debt discount which is being amortized over the life of the note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 104,122 and there is an
unamortized balance of debt discount of $ 50,941. On
October 11, 2018, Drone Guarder, Inc., a Nevada corporation (the “Company”) entered into a Securities Purchase Agreement
(the “Power Up SPA”) with Power Up Lending Group Ltd. (“Power Up”) pursuant to which Power Up purchased
a convertible promissory note evidencing a loan of $53,000. On August 1, 2018, the Company issued Power Up a convertible note
of $53,000 (the “Power Up Note”). The Power Up Note entitles the holder to 12% interest per annum and matures on July
30, 2019. Power
Up may convert the Power Up Note into shares of the Company’s common stock beginning on the date which is 180 days from
the issuance date of the Power Up Note, at a price equal to 65% of the lowest two (2) trading prices during the 20 trading day
period ending on the last complete trading date prior to the date of conversion, provided, however, that Power Up may not convert
the Power Up Note to the extent that such conversion would result in Power Up’s beneficial ownership being in excess of
4.99% of the Company’s issued and outstanding common stock together with all shares owned by Power Up and its affiliates.
The beneficial ownership limitation may not be waived by Power Up. Upon issue, the Company recorded derivative liabilities for
the conversion feature of the convertible notes and warrants, based up on the Binomial Fair Value Model and using the following
assumptions: an exercise price of $0.0061, our stock price on the date of grant $.012, expected dividend yield of 0%, expected
volatility of 131.300, risk free interest rate of 2.44 for notes payable , and remaining term of .80 year. . Upon initial valuation,
the derivative liability of $70,200 was recorded as a debt discount which is being amortized over the life of the note payable. As
of October 31, 2018, the derivative liability was recalculated using the Binomial Fair Value Model as $ 75,335 and there is an
unamortized balance of debt discount of $ 35,344. On
issuance of the notes payable, financing fees and legal fees of $ 93,600 were deducted from loan proceeds. These have been deferred
and are being amortized over the terms of the loans. During the period ended October 31, 2018, $ 67,529 of the deferred financing
costs was amortized. The balance of deferred financing costs as at October 31, 2018 is $ 26,071. During the period
ended October 31, 2018, the Company issued 9,550,000 shares of common stock in settlement of promissory notes in the amount of
$43,900. |
