Notes Payable

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

NOTE 7 - Notes Payable

2017 Notes Payable

During the year ended December 31, 2017, the Company issued an unsecured promissory note in the amount of $9,545 ($12,000 Canadian Dollars). The unsecured promissory note is due in August 2018 and bears interest at a rate of 18% per annum, payable monthly.

During the years ended December 31, 2017, the Company issued secured promissory notes in the amount of $53,847 ($67,700 Canadian Dollars). The secured promissory notes are due in October and November 2018 and bears interest at a rate of 12% per annum. The secured promissory notes are secured by Company inventory and personal assets held by the CEO.

During the years ended December 31, 2017, the Company issued secured promissory notes in the amount of $60,000. The secured promissory notes are due in August and November 2018 and bear interest at a rate of 12% per annum. The secured promissory notes are secured by Company inventory and personal assets held by the CEO.

During the years ended December 31, 2017 and 2016, the Company issued secured promissory notes in the amount of $52,845 and $20,608 ($64,677 and $27,670 Canadian Dollars), respectively. The secured promissory notes are due in July 2018 and bears interest at a rate of 18% per annum. The secured promissory notes are secured by all present and after-acquired property and assets of the Company. The balance owed on these notes payable at December 31, 2017 and 2016 is $73,452 and $20,608 ($92,348 and $27,670 Canadian Dollars), respectively. At December 31, 2017 and 2016 the accrued interest on these notes payable was $13,134 and $948 ($16,513 and $2,024 Canadian Dollars), respectively.

2016 Notes Payable

During the year ended December 31, 2016, the Company issued secured promissory notes in the amount of $79,000. The secured promissory notes are due from July through October 2018 and bears interest at a rate of 18% per annum, payable monthly. The secured promissory notes are secured by all present and after-acquired property and assets of the Company. In connection with the issuance of the secured promissory notes, the Company issued 100,000 shares of its common stock with an aggregate fair value of $15,000 as a commitment fee. The commitment fee was expensed during the year ended December 31, 2016. At December 31, 2017 and 2016 the accrued interest on these notes was $9,327 and $3,528, respectively.

Secured Promissory Note

In October, 2015, the Company entered into a secured promissory note with an investor in the principal amount of 102,000 Canadian Dollars. The Company received proceeds of $58,653 (75,000 Canadian Dollars) and $21,115 (27,000 Canadian Dollars) was recorded as a discount which was accreted over the life of the note. The promissory note requires a daily payment of $249 (324 Canadian Dollars) until January 26, 2017 and carries a 40.0% interest rate.

The promissory note is secured by all assets of the Company. The outstanding principal balance on the note at December 31, 2016 was $44,382 (56,592 Canadian Dollars) and the carrying amount of the discount was $1,163 (1,561 Canadian Dollars). During 2017, the lender agreed to settle the loan for $30,826 ($39,000 Canadian Dollars) resulting in the Company recording a $13,556 gain on the forgiveness of the remaining portion of the secured promissory note.

The amounts repayable under notes payable and secured promissory note at December 31, 2017 and 2016 are as follows:

	2017			2016
Balance owing, December 31,	$	275,844		$	210,069
Less amounts due within one year		(275,844	)		(105,985	)
Long-term portion	$	-		$	104,084