CONVERTIBLE NOTES AND DERIVATIVE LIABILITY

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

CONVERTIBLE NOTES AND DERIVATIVE LIABILITY

NOTE 9 - CONVERTIBLE NOTES AND DERIVATIVE LIABILITY

A summary of the Company’s convertible notes is as follows: 

Balance, December 31, 2021	$	943,017
Proceeds received		912,952
Value of convertible notes converted to 97,646,062 common shares		(552,517	)
Note discount		(162,392	)
Balance, net of note discount, December 31, 2022		1,141,060
Proceeds received		439,501
Value of conversion of notes to 166,607,680 common shares		(222,096	)
Note discount		162,393
Balance, December 31, 2023	$	1,520,858

During years ended December 31, 2023 and 2022, the Company recorded a loss on conversion of $654,919 and $929,912, respectively; interest expense of $191,030 and $121,248, respectively; and amortized $162,392 and $478,660, respectively, of note discount which was charged to interest expense.

A summary of the terms and conditions of the convertible notes outstanding as at December 31, 2023 is as follows: 

Maturity Date	Interest Rate	Conversion price	Principal at inception	Principal outstanding
			$	$
Jan. 7, 2021	8%	75% of the lowest 20-day share price before the conversion date	100,000	100,000
Dec. 11, 2022	24%	Lowest of the 60-day share price before the conversion date	312,500	312,500
Nov. 1, 2023	10%	50% of lowest 20-day share price before the conversion date	35,000	38,534
Nov. 3, 2023	10%	61% of the lowest 20-day share price before the conversion date	54,250	17,321
Dec. 13, 2023	10%	61% of lowest 20-day share price before the conversion date	53,750	53,750
Jan. 28, 2024	10%	61% of lowest 20-day share price before the conversion date	43,750	43,750
Feb. 06, 2024	10%	61% of lowest 20-day share price before the conversion date	55,000	55,000
Mar. 28, 2024	10%	61% of lowest 20-day share price before the conversion date	55,000	55,000
May 5, 2024	12%	Lesser of $0.0025 or 70% of lowest 5-day share price before the conversion date	60,000	60,000
			769,250	735,855

As at December 31, 2023, the Company had $348,577 (December 31, 2022 - $151,925) in accrued interest on these notes, recorded in accounts payable and accrued liabilities, and $nil (December 31, 2022 - $162,932) in unamortized note discount related to these notes.

As at the date of this Report, all convertible notes were past their maturity date. Additionally, as a result of the late filing of previous Reports, and the loss of the Company’s active listing in the OTC market, the penalty provisions of all convertible notes outstanding became effective. The Company estimated that the maximum penalty provisions amounted to one times the face value of all convertible notes outstanding and recorded an accrued liability for penalties amounting to $1,303,452, which has been recorded in accounts payable and accrued liabilities.

The convertible notes were determined to be compound instruments, comprising separate financial instruments, being the debt obligation and the conversion option, which were bifurcated and are presented separately on the consolidated balance sheets. As the number of common shares to be issued on exercise of the conversion option is contingent on a variable share price, the conversion option has been classified as a derivative liability.

As at December 31, 2023 the Company had derivative liabilities of $1,264,388 (December 31, 2022 - $1,008,868).

A summary of the Company’s weighted average inputs used in the Black-Scholes option pricing model for derivative liabilities valuation as at December 31, 2023 is as follows: 

	2023
Stock Price	$	0.002
Exercise Price	$	0.001
Risk-free interest rate		3.91%
Expected volatility		240.65%
Expected life		1.00 years
Expected dividend yield		0.00%

The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate the future volatility of its common stock. The expected life of the conversion feature of the notes was based on the remaining term of the notes. The expected dividend yield was based on the fact that the Company has not customarily paid dividends in the past and does not expect to pay dividends in the future.