• Filing Date: 2018-11-14
  • Form Type: 10-Q
  • Description: Quarterly report
v3.10.0.1
Notes and Advances Payable Disclosure
9 Months Ended
Sep. 30, 2018
Notes  
Notes and Advances Payable Disclosure

NOTE 3 - NOTES AND ADVANCES PAYABLE

 

The tables below summarize the short-term loans outstanding as at September 30, 2018 and December 31, 2017:

 

As at September 30, 2018

Principal

Outstanding

Interest Rate

per Annum

Accrued

Interest

Total

$

27,000

8%

$

19,148

$

46,148

 

49,500

7%

 

36,723

 

86,223

 

146,775*

6%

 

23,815

 

170,590

 

15,000

0%

 

--

 

15,000

 

600,000

6%

 

120,266

 

720,266

 

110,000

15%

 

31,726

 

141,726

 

333,062

10%

 

49,173

 

382,235

$

1,281,337

 

$

280,851

$

1,562,188

*The carrying value of this loan is denoted in Canadian dollars and is translated into US dollars at the end of each reporting period.

 

As at December 31, 2017

Principal

Outstanding

Interest Rate

per Annum

Accrued

Interest

Total

$

27,000

8%

$

16,477

$

43,477

 

49,500

7%

 

32,336

 

81,836

 

151,455*

6%

 

16,867

 

168,322

 

15,000

0%

 

--

 

15,000

 

600,000

6%

 

88,735

 

688,735

 

110,000

15%

 

19,385

 

129,385

 

305,223

10%

 

23,095

 

328,318

$

1,258,178

 

$

196,895

$

1,455,073

*The carrying value of this loan is denoted in Canadian dollars and is translated into US dollars at the end of each reporting period.

 

Quarry Bay Loans

 

In 2012 the Company entered into series of Loan Agreements with Quarry Bay Capital LLC (“Quarry Bay”) for a total of CAD$190,000 (the “Quarry Bay Loan”). The Quarry Bay Loan accumulates interest at 6% per annum. As at September 30, 2018, the Company owed $170,590 (December 31, 2017 - $168,322), including accrued interest of $23,815 (2017 - $16,867) under the Quarry Bay Loan.

 

Norling Bridge Loans

 

On July 28, 2015, and November 6, 2015, the Company entered into two separate bridge loan agreements (the “Norling Loans”) with its former President and CTO, Rasmus Norling.  Pursuant to the Norling Loans, Mr. Norling agreed to lend to the Company total of $400,000 in exchange for unsecured promissory notes.

 

The Norling Loans have an interest rate of 6% and were due December 31, 2016. During the nine-month period ended September 30, 2018, the Company recorded $21,002 in interest expense associated with the Norling Loans (2017 - $19,782). As at September 30, 2018, the Company owed $479,750 (2017 - $458,748) under the Norling Loans.

 

As of September 30, 2018, the Norling Loans are in default, however, the Company has not been served with a default notice by Mr. Norling.

 

KF Business Ventures Bridge Loan and Note Payable

 

On August 31, 2015, the Company entered into a bridge loan agreement with KFBV, whereby KFBV agreed to lend to the Company $200,000 in exchange for an unsecured promissory note (the “KFBV Bridge Loan”).

 

The KFBV Bridge Loan has an interest rate of 6%, and was due December 31, 2016. During the nine months ended September 30, 2018, the Company recorded $10,529 in interest expense associated with the KFBV Bridge Loan (2017 - $9,918). As at September 30, 2018, the Company owed $240,516 (2017 - $229,987) under the KFBV Bridge Loan.

 

In September 2016, the Company issued an unsecured promissory note to KFBV for gross proceeds of $110,000 (the “KFBV Note”). As part of the terms of the KFBV Note the Company agreed to grant KFBV the right to offset the cash payable by KFBV to exercise the warrants to purchase shares of the Company’s common stock against the corresponding amount the Company would have to pay for outstanding indebtedness under this KFBV Note.

 

The KFBV Note has an interest rate of 10% and was due January 15, 2017. Under the terms of the KFBV Note, in the event of default the interest rate increases to 15% per annum until such time that the default is cured. During the nine months ended September 30, 2018, the Company recorded $12,341 in interest expense associated with the KFBV Note (2017 - $15,226). As at September 30, 2018, the Company owed $141,726 (2017 - $129,385) under the KFBV Note.

 

As of September 30, 2018, the KFBV Bridge Loan and KFBV Note are in default, however, the Company has not been served with a default notice by KFBV.

 

During the nine months ended September 30, 2018, KFBV advanced the Company an additional $27,839 (2017 - $305,223) for working capital. The advances are unsecured, due on demand and accumulate interest at a rate of 10% per annum. During the nine months ended September 30, 2018, the Company recorded $26,078 in interest expense associated with these advances (2017 - $Nil). As at September 30, 2018, the Company owed $382,235 (2017 - $328,318) on account of working capital advances it borrowed from KFBV.

 

Other Loans

 

In September and October of its Fiscal 2010, the Company entered into a number of loan agreements with a third party creditor, whereby the third party creditor agreed to lend to the Company a total of $34,500 in exchange for unsecured promissory notes. On November 9, 2010, the Company entered into a loan agreement with another third party creditor, whereby the third party creditor agreed to lend to the Company $15,000 in exchange for an unsecured promissory note.

 

The loans have an interest rate of 7%, and are due on demand. During the nine months ended September 30, 2018, the Company recorded $4,387 in interest expense associated with these loans from third party creditors (2017 - $4,090). As at September 30, 2018, the Company owed $86,223 (2017 - $81,836) under these loans.

 

On December 12, 2011, the Company entered into a loan agreement with a third party creditor, whereby the third party creditor agreed to lend to the Company $15,000 in exchange for an unsecured promissory note. On February 13, 2012, the third party creditor entered into a second loan agreement with the Company, whereby the third party creditor agreed to lend to the Company an additional $12,000 in exchange for an unsecured promissory note.

 

The loans have an interest rate of 8%, and are due on demand. During the nine months ended September 30, 2018, the Company recorded $2,671 in interest expense associated with these loans (2017 - $2,467). As at September 30, 2018, the Company owed $46,148 (2017 - $43,477) under these loans.

 

On August 14, 2012, the Company entered into a loan agreement with a third party creditor, whereby the third party creditor agreed to lend to the Company $15,000 in exchange for an unsecured non-interest bearing promissory note payable on demand.