NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
Golden Matrix Group, Inc. (“GMGI” or the “Company”), a Nevada corporation, formed on June 4, 2008, under the name Ibex Resources Corp., has a global presence with offices in Las Vegas Nevada and Sydney Australia. GMGI’s sophisticated social gaming software supports multiple languages including English and Chinese.
The accompanying consolidated financial statements of GMGI include the accounts of GMGI and its wholly-owned subsidiary, companies IRC Exploration Ltd., (‘IRC”) a company incorporated in Alberta, Canada on August 1, 2008; Northern Bonanza Inc., (‘NBI”) a company incorporated in Ontario, Canada on June 30, 2010; Source Bonanza LLC, (“SB”) a Limited Liability Company incorporated in Nevada, USA on June 18, 2010; and Vulture Gold LLC (“Vulture”), a Nevada Limited Liability Company which was acquired on August 7, 2010, and have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. All intercompany balances have been eliminated.
NOTE 2 – GOING CONCERN
The accompanying consolidated financial statements of GMGI have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations and had a net working capital deficit of $3,981,442 at July 31, 2016. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Without realization of additional capital, it would be unlikely for GMGI to continue as a going concern. GMGI’s management plans on raising cash from public or private debt or equity financing, on an as needed basis, and in the longer term, revenues from the gambling business. GMGI’s ability to continue as a going concern is dependent on these additional cash financings, and ultimately upon achieving profitable operations through the development of its gambling business.
NOTE 3 – SUMMARY OF ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. Actual results could differ from those estimates.
Reclassification
Certain prior period amounts have been reclassified to conform to current period presentation.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
Allowance for doubtful accounts
The allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. The Company determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. As of July 31, 2016 and 2015, there were no allowances for doubtful accounts.
Long Lived Assets
Long-lived assets to be held and used or disposed of other than by sale are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. When required, impairment losses on assets to be held and used or disposed of other than by sale are recognized based on the fair value of the asset. Long-lived assets to be disposed of by sale are reported at the lower of its carrying amount or fair value less cost to sell.
Intangible Assets
Intangible assets consist of expenditures for domain names and certain intellectual properties acquired for an online horse racing product the Company is developing. The intangible assets are recorded at cost and amortized over its estimated useful life of 3 years.
Derivative Instruments
Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in the statement of operations.
Debt Discount
Debt discount is amortized over the term of the related debt using the effective interest rate method.
Revenues
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.
Fair Value of Financial Instruments
The Company measures its financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
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Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
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·
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Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
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·
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Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one more significant inputs or significant value drivers are unobservable.
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Our financial instruments include cash, accounts payable and accrued liabilities, notes payable, convertible notes payable, advances from shareholder, and derivative liabilities. The carrying values of these financial instruments approximate their fair value due to their short-term nature. The derivative liabilities are stated at their fair value as a level 3 measurement. The Company used a Black-Scholes model to determine the fair values of these derivative liabilities.
Stock-Based Compensation
Stock-based compensation expense is recorded for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is typically the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.
Income Taxes
Deferred income taxes reflect the net effect of (a) temporary differences between the carrying amounts of assets and liabilities for financial purposes and the amounts used for income tax reporting purposes, and (b) net operating loss carry forwards. No net provision for refundable Federal income tax has been made in the accompanying statement of operations because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry forward has been recognized, as it is not deemed likely to be realized.
Loss Per Common Share
Basic loss per share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share are computed similar to basic income per share except that the denominator is increased to include the number of common stock equivalents. Common stock equivalents represent the dilutive effect of the assumed exercise of any outstanding stock equivalents, using the treasury stock method, at either the beginning of the respective period represented or the date of issuance, whatever is late, and only if the common stock equivalents are considered dilutive based upon the Company’s net income (loss) position at the calculation date.
There are no common stock equivalents outstanding and, thus, diluted and basic loss per share is the same.
Subsequent Events
GMGI evaluated subsequent events through the date these financial statements were issued for disclosure purposes.
Recently Issued Accounting Standards
In May 2014, a pronouncement was issued that creates common revenue recognition guidance for U.S. GAAP and International Financial Reporting Standards. The new guidance supersedes most preexisting revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, with an option to adopt the standard one year earlier. The new standard is to be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The Company is currently evaluating the impact of the new pronouncement on its financial statements.
In February 2016, a pronouncement was issued that creates new accounting and reporting guidelines for leasing arrangements. The new guidance requires organizations that lease assets to recognize assets and liabilities on the balance sheet related to the rights and obligations created by those leases, regardless of whether they are classified as finance or operating leases. Consistent with current guidance, the recognition, measurement, and presentation of expenses and cash flows arising from a lease primarily will depend on its classification as a finance or operating lease. The guidance also requires new disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period, with early application permitted. The new standard is to be applied using a modified retrospective approach. The Company is currently evaluating the impact of the new pronouncement on its financial statements.
The Company does not believe that any other recently issued effective pronouncements, or pronouncements issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements.
NOTE 4 – INTANGIBLE ASSETS
On November 6, 2015 and December 7, 2015, the Company purchased 100% interest in the intellectual property “We Buy Gold.” The Company expects the intellectual property to bring value to the Company for the first three years of its service and as such the property is classified as a definitive asset and is amortized over a 3-year period. During the year ended July 31, 2016, management evaluated the carrying value on the intellectual property “We Buy Gold.” and recorded an impairment of $1,800,000 due to uncertain recoverability.
On February 22, 2016 the Company entered into a Know-How and Asset Purchase Agreement with Luxor Capital, LLC, whereby the Company acquired Gaming IP and know-how. The purchase price for these assets consisted of a convertible note in the amount of $2,874,712, included $2,374,712 payable to Luxor Capital, LLC and 1,666,667 shares of the Company’s common stock. During the year ended July 31, 2016, management evaluated the carrying value on the intellectual property and recorded an impairment of $2,874,712 due to uncertain recoverability.
NOTE 5 – RELATED PARTY TRANSACTIONS
All related party transactions have been recorded at the exchange value which was the amount of consideration established and agreed to by the related parties.
On June 30, 2010, the Company purchased from the Company president 13 mineral property claims in the Thunder Bay mining division of Ontario, Canada. As consideration for the purchase the Company issued an unsecured, non-interest bearing promissory note for $20,000 due on November 30, 2010. During the year ended July 31, 2011 this promissory note was settled by payment of $20,000 cash to the president.
During the year ended July 31, 2010, the former president of the Company granted an option to the current president of the Company to acquire up to 7 common shares of the Company.
On November 1, 2009, the Company entered into a Corporate Management Services Agreement with the President of the Company for management services. Pursuant to the agreement the President would receive a signing bonus of $7,500 (paid November 1, 2009) and $5,000 per month beginning December 1, 2009 for services rendered plus reimbursement of the Company's expenses. The agreement may be terminated by either party upon 30 days written notice.
On June 21, 2011, the Company amended the agreement by issuing a resolution to reflect a payment of $6,000 per month for services rendered.
On October 31, 2012, the Former President of the Company acquired 3 common shares of the Company in a private transaction. As of October 31, 2012 the President holds 16.4% interest in the common stock of the Company.
On May 15, 2013 the Company entered into an employment agreement with DhugaldPinchin providing a signing bonus equivalent to $50,000 USD or stock and $7,500 per month salary.
On March 25, 2014, DhugaldPinchin terminated his employment with the Company.
On April 1, 2014, the Company entered into a consulting contract with Edward Aruda. The Company will pay Mr. Aruda $2,000 per month, payable in duly authorized, validly issued, fully paid non assessable common shares of the Company.
On February 22, 2016, the Company entered into an Asset Purchase Agreement with Luxor Capital, LLC, which is wholly owned by Anthony Goodman. The Company purchased a Certain Gaming IP, along with the “know how” of that Gaming IP from Luxor. Pursuant to the Asset Purchase Agreement, 1,666,667 shares of common stock have been issued to Luxor Capital, LLC and its designed party.
On April 1, 2016, the Company entered into a Services Agreement with Articulate Pty Ltd, which is wholly owned by the director of the Company, for consulting services. Pursuant to the agreement Articulated would receive $4,500 per month ending for services rendered plus reimbursement of the Company's expenses. The agreement may be terminated by either party upon 30 days written notice. As of July 31, 2016, the Company has a $78,447 payable to Articulate.
On June 1, 2016, the Company entered a distribution usage rights agreement with Globaltech Software Services LLC. (“Globaltech”), a company owned by the chief executive officer, the Company agreed to provide the rights of usage to its Credit Management system, Social Gaming systems and Technology. As of July 31, 2016, the Company had a $10,000 accounts receivable to Globaltech.
On July 31, 2016, the Company and Edward Aruda, Grid Petroleum Corp entered into a Cancellation and Release Agreement. In terms of Cancellation and Release Agreement, Edward Aruda and Grid Petroleum Corp agreed to cancel the amount with the Company totaling $54,820.
All related party transactions have been recorded at the exchange value which was the amount of consideration established and agreed to by the related parties.
On April 1, 2014, the Company entered into a consulting contract with Edward Aruda. The Company will pay Mr. Aruda $2,000 per month, payable in duly authorized, validly issued, fully paid non assessable common shares of the Company.
On February 18, 2016, Edward Aruda, our Chief Executive Officer, Secretary, Treasurer and Director tendered his resignation as CEO, Secretary and Treasurer. Mr. Aruda will remain a Director of the Company. Mr. Aruda’s resignation was not due to any disagreement on any matter relating to the operations, policies, or practices of the Company.
During the year ended July 31, 2016 and 2015, the Company recorded consulting fees of $44,000 and $32,000 owed to Edward Aruda. As of July 31, 2016 and 2015, due to related party includes $10,820 (July 31, 2014 - $10,820), owing to Grid Petroleum Corp.
On July 31, 2016, the Company and Edward Aruda, Grid Petroleum Corp entered into a Cancellation and Release Agreement. In terms of Cancellation and Release Agreement, Edward Aruda and Grid Petroleum Corp agreed to cancel the amount with the Company totaling $54,820.
On April 1, 2016, the Company entered a services agreement with Articulate Pty Ltd (“Articulate”), a company owned by the chief executive officer. Articulate provided accounting, customer supporting and programming services to the Company, the Company will pay Articulate $4,500 per month for the first 3 months and $9,000 per month from the fourth month.
As of July 31, 2016 and 2015, the Company had accounts payable of $78,447 and $0, respectively, to its chief executive officer and Articulate for reimbursement of expenses and compensation.
On June 1, 2016, the Company entered a distribution usage rights agreement with Globaltech Software Services LLC. (“Globaltech”), a company owned by the chief executive officer, the Company agreed to provide the rights of usage to its Credit Management system, Social Gaming systems and Technology.
As of July 31, 2016, the Company had accounts receivable of $10,000 to Globaltech.
NOTE 6 – CONVERTIBLE NOTES PAYABLE
Convertible notes payable
Convertible notes payable at July 31, 2016 and 2015 consisted of the following:
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July 31,
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July 31,
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2016
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2015
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Promissory Note #2
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30,000
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30,000
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Promissory Note #5
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-
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12,000
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Promissory Note #6
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-
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11,774
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Promissory Note #11
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-
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57,500
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Promissory Note #12
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-
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7,500
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Promissory Note #13
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-
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7,500
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Promissory Note #14
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-
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11,000
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Promissory Note #15
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-
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7,500
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Promissory Note #16
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-
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11,000
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Promissory Note #17
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-
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7,500
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Promissory Note #18
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-
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11,000
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Promissory Note #19
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-
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7,500
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Promissory Note #20
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-
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1,000
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Promissory Note #21
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-
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11,000
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Promissory Note #22
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-
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7,500
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Promissory Note #23
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-
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16,000
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Promissory Note #25
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-
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7,500
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Promissory Note #26
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-
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7,000
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Promissory Note #27
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-
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7,500
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Promissory Note #28
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-
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16,000
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Promissory Note #29
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-
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7,500
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Promissory Note #30
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-
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16,000
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Promissory Note #31
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23,741
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26,500
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Promissory Note #34
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-
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7,500
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Promissory Note #35
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-
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16,000
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Promissory Note #36
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-
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7,500
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Promissory Note #37
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-
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11,500
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Promissory Note #39
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17,969
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23,995
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Promissory Note #42
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13,955
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24,000
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Promissory Note #44
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25,000
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25,000
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Promissory Note #45
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28,285
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40,000
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Promissory Note #46
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33,000
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33,000
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Promissory Note #49
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-
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360,000
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Promissory Note #50
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313,145
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360,000
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Promissory Note #51
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-
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174,510
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Promissory Note #52
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221,495
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240,000
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Promissory Note #53
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-
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150,000
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Promissory Note #54
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-
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75,000
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Promissory Note #55
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-
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75,000
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Promissory Note #56
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-
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75,000
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Promissory Note #57
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-
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140,000
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Promissory Note #58
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-
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140,000
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Promissory Note #59
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219,460
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240,000
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Promissory Note #68
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1,045,712
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-
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Notes payable, principal
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$
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1,962,212
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$
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2,523,279
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Debt discount
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(277,798
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)
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(161,374
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)
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Notes payable, net of discount
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1,679,414
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2,361,905
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Accrued interest
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259,169
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209,187
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Total notes payable
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$
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1,938,583
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$
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2,571,092
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Promissory Note #2
On March 19, 2012, the Company received $30,000 cash from the issuance of a convertible promissory note in the amount of $30,000. The promissory note is unsecured, interest free and repayable upon demand.
The note may be converted at the option of the holder into Common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly the note may be converted into 2,000 common shares of the Company.
The Company determined that this Promissory note should be accounted for in accordance with FASB ASC 470-20 which addresses “Accounting for Convertible Securities with Beneficial Conversion Features". The beneficial conversion feature is calculated at its intrinsic value (that is, the difference between the conversion price $0.01 and the fair value of the common stock into which the debt is convertible at the commitment date (per share being $0.08), multiplied by the number of shares into which the debt is convertible. The valuation of the beneficial conversion feature recorded cannot be greater than the face value of the note issued.
Promissory Note #5
On October 30, 2012, the Company received funding pursuant to a convertible promissory note in the amount of $12,000. The promissory note is unsecured; bears interest at 8% per annum, and matured on October 30, 2012. Any principal amount not paid by the maturity date bears interest at 22% per annum.
On May 25, 2016, the Company and Direct Capital Group, Inc. (“Direct”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $12,000 accrued interest of $9,352 and a derivative liability of $13,629 was recorded.
In terms of Cancellation and Release Agreement, Direct agreed to cancel the convertible promissory note with the Company totaling $21,352. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #6
On December 18, 2012, the Company converted a loan payable of $11,774 to a convertible promissory note. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 18, 2013. Any principal amount not paid by the maturity date bears interest at 22% per annum.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $11,774 accrued interest of $7,812 and a derivative liability of $13,372 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $19,586. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #11
On May 31, 2013 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $57,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 30, 2013. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 10, 2015, the Company reassigned the principal amount of the note of $57,500 to Santa Rosa Resources.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 31, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $57,500 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Dhugald Pinchin entered into a Cancellation and Release Agreement. As of May 25, 2016, accrued interest of $23,725 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $23,725. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes
Promissory Note #12
On June 30, 2013 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 31, 2013. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On June 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $7,500 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $4,217 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $11,717. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #13
On July 31, 2013 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on January 31, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On July 31, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $5,250 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $4,077 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $11,577. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #14
On August 1, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On August 1, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $7,700 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $11,000 and accrued interest of $5,973 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $16,973. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #15
On August 31, 2013 the Company entered into a Convertible Promissory Note with DhugaldPinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 3, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On August 31, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $2,250 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,937 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $11,437. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #16
On September 1, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On September 1, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $3,300 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $11,000 and accrued interest of $5,780 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $16,780. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #17
On September 30, 2013 the Company entered into a Convertible Promissory Note with DhugaldPinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 31, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On September 30, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $3,000 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,807 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $11,307. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #18
On October 1, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 1, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $5,500 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $11,000 and accrued interest of $5,577 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $16,577. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #19
On October 31, 2013 the Company entered into a Convertible Promissory Note with DhugaldPinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 30, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 31, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $750 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,669 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $11,169. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #20
On November 1, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC (“Syndication “) in the sum of $176,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On November 1, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 19, 2014, a replacement note was issued and the principal balance of $50,000 and interest of $5,000 was transferred Gel Properties, LLC.
On June 6, 2014, a replacement note was issued and the principal balance of $25,000 was transferred Union Capital, LLC.
On July 2, 2014, a replacement note was issued and the principal balance of $25,000 was transferred Union Capital, LLC.
On July 9, 2014, a replacement note was issued and the principal balance of $75,000 was transferred LG Capital, LLC.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $1,000 and accrued interest of $11,688 was recorded.
In terms of Cancellation and Release agreement Syndication agreed to cancel the convertible promissory note with the Company totaling $12,688. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Syndication that Syndication shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Syndication under those Convertible Notes and Syndication shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #21
On November 1, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On November 1, 2013, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $11,000 and accrued interest of $5,373 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $16,373. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #22
On November 30, 2013 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 30, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On November 30, 2013 interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,534 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $11,034. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #23
On December 1, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $16,000 and accrued interest of $7,524was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $23,524. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #25
On December 31, 2013 the Company entered into a Convertible Promissory Note with DhugaldPinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 30, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,394 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $10,894. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #26
On January 1, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $7,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,000 and accrued interest of $3,164 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $10,164. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #27
On January 31, 2014 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 31, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On January 31, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,254 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $10,754. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #28
On February 1, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On February 1, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $16,000 and accrued interest of $6,929 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $22,929. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #29
On February 28, 2014 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 28, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On February 28, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $3,127 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $10,627. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #30
On March 1, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On March 1, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $16,000 and accrued interest of $6,643 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $22,643. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #31
On March 17, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $26,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 17, 2015. Any principal amount not paid by the maturity date bears interest at 24% per annum. During the year ended July 31, 2016, the Company issued 2,481,206 shares of common stock for the conversion of this note of $2,759 and $493 accrued interest.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $42,734 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a gain of $643 (the year ended July 31, 2015–loss of $10,671) due to the change in value of the derivative liability during the period, and debt discount of $0 (the year ended July 31, 2015 $0) was accreted to the statement of operations.
As of July 31, 2016, principal balance of $23,741 (July 31, 2015 - $26,500), accrued interest of $9,956 (July 31, 2015 - $4,490), debt discount of $0 (July 31, 2015 - $0) and derivative liability of $42,734 (July 31, 2015 - $53,000) was recorded.
Promissory Note #34
On March 31, 2014 the Company entered into a Convertible Promissory Note with DhugaldPinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 30, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On March 31, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $2,982 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $10,482. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #35
On April 1, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $16,000 and accrued interest of $6,351 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $22,351. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #36
On April 30, 2014 the Company entered into a Convertible Promissory Note with Dhugald Pinchin in the sum of $7,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 30, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On April 30, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $1,500 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $7,500 and accrued interest of $2,843 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $10,343. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #37
On May 1, 2014 the Company entered into a Convertible Promissory Note with Syndication Capital, LLC, in the sum of $16,500. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On August 8, 2015, the Company transferred the note to Direct Capital Group, Inc.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 1, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $4,950 was recorded in the financial statements with a corresponding increase to additional paid in capital. During the life of the promissory note, the debt discount was accreted to the statement of operations.
On March 24, 2015, a replacement note was issued and $5,000 of the principal balance was transferred Direct Capital Group, Inc.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $11,500 and accrued interest of $4,981 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $16,481. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #39
On May 19, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 19, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the year ended July 31, 2016, the Company issued 6,451,659 shares of common stock for the conversion of this note in the amount of $11,026.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $32,007 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a loss of $7,195 (July 31, 2015 a gain of $9,334) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $25,000 was accreted to the statement of operations.
As of July 31, 2016, principal balance of $12,969 (July 31, 2015 $23,995), accrued interest of $6,280 (July 31, 2015 $2,731), and derivative liability of $23,345 (July 31, 2015 $39,992) was recorded.
Promissory Note #42
On June 6, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 6, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the year ended July 31, 2016, the Company issued 2,222,398 shares of common stock for the conversion of this note in the amount of $10,045 and accrued interest of $964.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $33,550 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a loss of $7,779 (July 31, 2015 a gain of $23,091) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $25,000 was accreted to the statement of operations.
As of July 31, 2016, principal balance of $13,955 (July 31, 2015 - $24,000), accrued interest of $4,432 (July 31, 2015 $2,546), and derivative liability of $25,119 (July 31, 2015 $40,000) was recorded.
Promissory Note #44
On July 2, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 2, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the year ended July 31, 2016, the Company accrued $6,811 (July 31, 2015 - $74) in interest expense.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $40,725 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a loss of $3,332 (July 31, 2015 loss of $942) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $25,000 was accreted to the statement of operations.
As of July 31, 2016, principal balance of $25,000 (July 31, 2015 - $25,000), accrued interest of $6,329 (July 31, 2015 - $2,318), and derivative liability of $44,999 (July 31, 2015 $41,667) was recorded.
Promissory Note #45
On July 9, 2014, the Company arranged a debt swap under which Syndication Capital Note #20 for $75,000 was transferred to LG Capital Funding, LLC. The promissory note is unsecured, bears interest at 8% per annum and matures on July 9, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. The note also contains customary events of default. During the year ended July 31, 2016, the Company issued 285,896 shares of common stock for the conversion of this note in the amount of $11,715 and accrued interest of $1,419.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $202,937 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a loss of $13,517 (July 31, 2015 gain of $55,710) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $75,000 was accreted to the statement of operations.
As of July 31, 2016, principal balance of $28,285 (July 31, 2015 $40,000) accrued interest of $7,564 (July 31, 2015 - $3,588), and a derivative liability of $50,912 (July 31, 2015 $80,000) was recorded.
Promissory Note #46
On July 9, 2014, the Company received funding pursuant to a convertible promissory note in the amount of $33,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 9, 2015. Any principal amount not paid by the maturity date bears interest at 16% per annum. During the year ended July 31, 2016, the Company accrued $8,253 (July 31, 2015 $2,799) in interest expense.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $130,556 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a gain of $6,600 (July 31, 2015 gain of $64,556) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $33,000 was accreted to the statement of operations.
As of July 31, 2016, principal balance of $33,000 (July 31, 2015 $33,000), accrued interest of $8,253 (July 31, 2015 - $2,958), and derivative liability of $59,400 (July 31, 2015 $66,000) was recorded.
Promissory Note #49
On December 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $360,000 and accrued interest of $83,579 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $443,579. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #50
On December 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On April 27, 2016, the Company transferred the note to N600PG, LLC.
During the year ended July 31, 2016, the Company issued 50,061,817 common shares upon the conversion of $46,855 in principal.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On December 31, 2014, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
As of July 31, 2016, principal balance of $313,145 (July 31, 2015 $360,000) and accrued interest of $96,092 (July 31, 2015 $20,870) was recorded.
Promissory Note #51
On March 24, 2015, the Company arranged a debt swap under which four Syndication Capital notes totaling $176,000 were transferred to Direct Capital Group, Inc. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 24, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On March 24, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $176,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
During the nine months ended April 30, 2016, the Company issued 180,134 common shares upon the conversion of 27,737 in principal.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $147,773 and accrued interest of $27,510 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $175,283. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #52
On April 30, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 30, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On April 30, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital. During the year ended July 31, 2016, debt discount of $0 (July 31, 2015 - $120,656) was accreted to the statement of operations.
On January 19, 2016, the note was reassigned to Rockwell Capital Partners. At any time the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the lowest closing price on any day with a fifteen day look back”. On 18th April 2016, Rockwell Capital Partners reassigned $165,000 of the original note back to Direct Capital Group, Inc.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $479,999 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a gain of $11,581 due to the change in value of the derivative liability during the period, and debt discount of $0 (ended July 31, 2015 $119,344) was accreted to the statement of operations.
During the year ended July 31, 2016, the Company issued 4,432,534 common shares upon the conversion of $28,054 in principal, and $78,915 of the derivative liability was re-classified as additional paid in capital upon conversion.
As of July 31, 2016, principal balance of $211,945 (July 31, 2015 $240,000), accrued interest of $43,691 (July 31, 2015 $4,839), and derivative liability of $381,504 was recorded.
Promissory Note #53
On May 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $150,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2015. Any principal amount not paid by the maturity date bears interest at 12% per annum.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $353,498 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $150,000 and accrued interest of $15,682 and derivative liability $900,000 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $165,682. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #54
On May 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2015. Any principal amount not paid by the maturity date bears interest at 12% per annum.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $176,749 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $75,000, accrued interest of $7,841 and derivative liability $450,000 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $82,841. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #55
On May 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2015. Any principal amount not paid by the maturity date bears interest at 12% per annum.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $176,749being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $75,000, accrued interest of $7,841 and derivative liability $450,000 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $82,841. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #56
On May 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2015. Any principal amount not paid by the maturity date bears interest at 12% per annum.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $176,749 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $75,000, accrued interest of $7,841 and derivative liability $450,000 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $82,841. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #57
On May 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $140,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2015. Any principal amount not paid by the maturity date bears interest at 12% per annum.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $329,931 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $140,000, accrued interest of $14,637 and derivative liability $840,000 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $154,637. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #58
On May 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $140,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2015. Any principal amount not paid by the maturity date bears interest at 12% per annum.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $329,931 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
On May 25, 2016, the Company and Xploration, Inc. (“Xploration”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $140,000, accrued interest of $14,637 and derivative liability $840,000 was recorded.
In terms of Cancellation and Release agreement Xploration agreed to cancel the convertible promissory note with the Company totaling $154,637. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Xploration that Xploration shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Xploration under those Convertible Notes and Xploration shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #59
On July 31, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on January 31, 2016. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par$0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. On July 21, 2016, $25,000 was reassigned to Istvan Elek. At any time the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the lowest closing price on any day with a fifteen day look back”.
During the year ended July 31, 2016, the Company issued 16,331,732 common shares upon the conversion of $20,540 in principal.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On July 31, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $0 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
As of July 31, 2016, principal balance of $219,460 (July 31, 2015 $0) and accrued interest of $25,198 (July 31, 2015 $0) was recorded.
Promissory Note #60
On August 10, 2015, the Company reassigned the principal amount of a DhugaldPinchin note to Santa Rosa Resources. The original note was issued on May 31, 2013 in the sum of $57,500 and matured on November 30, 2013. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
On May 25, 2016, the Company and Santa Rose Resource. (“Santa Rose”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $57,500 was recorded.
In terms of Cancellation and Release agreement Santa Rose agreed to cancel the convertible promissory note with the Company totaling $57,500. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Santa Rose that Santa Rose shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Santa Rose under those Convertible Notes and Santa Rose shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #61
On October 31, 2015, the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $240,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2016. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par$0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On October 31, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $240,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $240,000 and accrued interest of $10,363 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $250,363. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #62
On November 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $150,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2016. Any principal amount not paid by the maturity date bears interest at 12% per annum.
After 180 days from issuance the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the average of the last fifteen closing trading prices on the OTCBB immediately prior to conversion date”.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $150,000, accrued interest of $6,444 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $156,444. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #63
On November 1, 2015 the Company received funding pursuant to a convertible promissory note in the amount of $140,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2016. Any principal amount not paid by the maturity date bears interest at 12% per annum.
After 180 days from issuance the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the average of the last fifteen closing trading prices on the OTCBB immediately prior to conversion date”.
On May 25, 2016, the Company and Xploration, Inc. (“Xploration”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $140,000, accrued interest of $6,014 was recorded.
In terms of Cancellation and Release agreement Xploration agreed to cancel the convertible promissory note with the Company totaling $146,014. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Xploration that Xploration shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Xploration under those Convertible Notes and Xploration shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #64
On November 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2016. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On November 1, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $80,000 and accrued interest of $3,437 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $83,437. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #65
On December 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 1, 2016. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On December 1, 2015, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $80,000 and accrued interest of $2,911 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $82,911. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #66
On January 2, 2016 the Company entered into a Convertible Promissory Note with Direct Capital Group, Inc. in the sum of $80,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 2, 2016. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par $0.00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933.
A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.
On January 2, 2016, interest expense relating to the beneficial conversion feature of this convertible note of $80,000 was recorded in the financial statements, with a corresponding increase to additional paid in capital.
On May 25, 2016, the Company and Direct entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $80,000 and accrued interest of $2,350 was recorded.
In terms of Cancellation and Release agreement Direct agreed to cancel the convertible promissory note with the Company totaling $82,350. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Direct that Direct shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Direct under those Convertible Notes and Direct shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #67
On January 31, 2016 the Company received funding pursuant to a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 31, 2016. Any principal amount not paid by the maturity date bears interest at 12% per annum.
After 180 days from issuance the note may be converted at the option of the holder into Common stock of the Company. The conversion price is 50% of the market price, where market price is defined as “the average of the last fifteen closing trading prices on the OTCBB immediately prior to conversion date”.
On May 25, 2016, the Company and Rider Capital Group, Inc. (“Rider”) entered into a Cancellation and Release Agreement. As of May 25, 2016, principal balance of $75,000, accrued interest of $1,726 was recorded.
In terms of Cancellation and Release agreement Rider agreed to cancel the convertible promissory note with the Company totaling $76,726. In consideration for the cancellation of the convertible promissory notes and in terms of the Asset Purchase Agreement dated February 22, 2016, the Company has agreed to transfer ownership of mining claims held in the Company’s name. It was also agreed by both the Company and Rider that Rider shall release all future claims to subsequent conversions of the Notes and the Company will have no further obligation to Rider under those Convertible Notes and Rider shall be forever barred from seeking further conversions or claiming obligations of the Company under the Convertible Notes.
Promissory Note #68
On March 1, 2016 the Company entered into a convertible promissory note with Luxor Capital, LLC (“Luxor”) in the amount of $2,374,712. The promissory note is unsecured, bears interest at 6% per annum, and matures on March 1, 2017. During the year ended July 31, 2016, Luxor converted $1,329,000 of this note to 305,385,996 shares of common stock.
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $1,662,243 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.
During the year ended July 31, 2016, the Company recorded a loss of $557,781 (July 31, 2016 $0) due to the change in value of the derivative liability during the period. During the life of the promissory note, the debt discount of $1,384,443 was accreted to the statement of operations.
As of July 31, 2016, principal balance of $1,045,712 (July 31, 2015 - $0) and accrued interest of $50,569 (July 31, 2015 - $0), and derivative liability of $1,293,740 was recorded.
Debt Discount
The table below presents the changes of the debt discount during the years ended July 31, 2016 and 2015:
|
|
Amount
|
|
|
|
|
|
July 31, 2015
|
|
$
|
161,374
|
|
Additions
|
|
|
2,142,243
|
|
Amortization
|
|
|
(2,025,819
|
)
|
July 31, 2016
|
|
|
277,798
|
|
Loans from shareholders
During the year ended July 31, 2016, the Company received a loan of $1,000 from its officer to open a new bank account.
NOTE 7 – DERIVATIVE LIABILITIES – NOTE CONVERSION FEATURE
Due to the conversion features contained in the convertible notes issued, the actual number of shares of common stock that would be required if a conversion of the notes as further described in Note 6 was made through the issuance of the Company’s common stock cannot be predicted, and the Company could be required to issue an amount of shares that may cause it to exceed its authorized share amount. As a result, the conversion feature requires derivative accounting treatment and will be bifurcated from the notes and “marked to market” each reporting period through the income statement. The fair value of the conversion future of the notes was recognized as a derivative liability instrument and will be measured at fair value at each reporting period.
During the years ended July 31, 2016 and 2015, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $3,085,745 and $279,167 respectively. During the years ended July 31, 2016 and 2015, $1,490,608 and $96,990 respectively of convertible notes payable and accrued interest was converted into common stock of the Company. For the years ended July 31, 2016 and 2015, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $5,570,955 and $214,648 respectively, was re-classed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During the years ended July 31, 2016 and 2015, the Company recognized a loss of $4,102,907 and gain of $221,809 respectively, based on the change in fair value (mark-to market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.
The following table provides a summary of the changes in fair value of the derivative financial instruments measured at fair value on a recurring basis using significant unobservable inputs:
|
|
July 31, 2016
|
|
|
July 31, 2015
|
|
Balance, beginning of period
|
|
$
|
322,029
|
|
|
$
|
479,320
|
|
Initial recognition of derivative liability
|
|
|
3,754,182
|
|
|
|
279,167
|
|
Conversion of derivative liability
|
|
|
(5,095,929
|
)
|
|
|
(214,648
|
)
|
Market-to-Market adjustment to fair value
|
|
|
2,959,473
|
|
|
|
(221,809
|
)
|
Balance, end of period
|
|
|
1,939,753
|
|
|
|
322,029
|
|
NOTE 8 – COMMON STOCK
The Company is authorized to issue 2,980,000,000 shares of its $0.00001 par value common stock.
On October 15, 2015, the Company effectuated a 1 for 2,000 reverse stock split, thereby reducing the issued and outstanding shares of common stock from 3,472,433,130 prior to the reverse split to 1,736,217 following the reverse split. An additional 1,043 shares were issued due to no fractional shares used as a result of the reverse stock split.
On November 6, 2015, the Company purchased all data and rights to the "We Buy Gold" website from Santa Rosa Resources. The Company issued 33,334 shares of common stock on November 6, 2015 and 33,334 shares of common stock on December 7, 2015, with a total value equal to $1,800,000, based on the market price of common stock on November 6, 2015 and December 7, 2015 was $23.88 and $29.85 respectively.
On March 9, 2016, the Company's Board of Directors approved 1 for 1,500 reverse split for the Company's authorized, issued and outstanding shares of common stock. The reverse stock split was effective on April 7, 2016 upon approval of shareholders holding a majority of the voting stock.
During the year ended July 31, 2015, the Company issued 680 common shares upon the conversion of $96,990 in principal and interest of promissory notes into common stock.
During the year ended July 31, 2016, the Company issued 389,669,609 common shares upon the conversion of $1,487,932 in principal and $2,876 interest of promissory notes into common stock.
As of July 31, 2016, 2,980,000,000 common shares of par value $0.00001 were authorized, of which 389,670,767 shares were issued and outstanding.
NOTE 9 – PREFERRED STOCK
The Company is authorized to issue 20,000,000 shares of it $0.00001 par value preferred stock.
On August 10, 2015, the Company's Board of Directors authorized the creation of 1,000 shares of Series B Voting Preferred Stock. The holder of the shares of the Series B Voting Preferred Stock has the right to vote those shares of the Series B Voting Preferred Stock regarding any matter or action that is required to be submitted to the shareholders of the Company for approval. The vote of each share of the Series B Voting Preferred Stock is equal to and counted as 4 times the votes of all of the shares of the Company's (i) common stock, and (ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the shareholders of the Company regarding each and every matter submitted to the shareholders of the Company for approval.
On August 10, 2015, the Company filed a Certificate of Designation with the Nevada Secretary of State creating the 1,000 shares of Series B Voting Preferred Stock
On August 14, 2015, the Company issued 1,000 shares of Series B Voting Preferred Stock to Santa Rosa Resources, representing 100% of the total issued and outstanding shares of the Company's Series B Voting Preferred Stock.
On April 3, 2016, the Company cancelled 1,000 shares of Series B Voting Preferred Stock to Santa Rosa Resources and a new certificate issued in the name of Luxor Capital LLC in the amount of 1000 Series B shares.
As of July 31, 2016, 20,000,000 Series B preferred shares of par value $0.00001 were authorized, of which 1,000 Series B shares were issued and outstanding, (0 preferred shares issued and outstanding as of July 31, 2015).
NOTE 10 – INCOME TAXES
No net provision for refundable federal income tax has been made in the accompanying statement of operations because no recoverable taxes were paid previously. Similarly, no deferred tax asset attributable to the net operating loss carry forward has been recognized, as it is not deemed likely to be realized. Additionally, as a result of the change in control in common stock transactions, the utilization of some or all of the net operating losses may be restricted as defined under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended.
NOTE 11 – CONCENTRATIONS
The Company’s revenues for the year ended July 31, 2016 were from one customer. As of July 31, 2016, the aggregate amount due from the customer was $20,000, which included $10,000 receivable for expenses paid on behalf of one customer.
As of July 31, 2014, the Company’s revenue was $0.
NOTE 12 – RELATED PARTY REVENUE
All of the Company's revenues for the year ended July 31, 2016 were from Globaltech Software Services LLC, a Company owned by the chief executive officer in which the Company agreed to provide the rights of usage to its credit management system, social gaming systems and technology.
NOTE 13 – COMMITMENTS AND CONTINGENCIES
On July 1, 2013, the Company entered into a lease agreement for office space in Sydney Australia with Articulate Pty Ltd a company wholly owned and controlled by Anthony Brian Goodman the CEO. Rent contribution is $1,500 per month.
NOTE 14 – SUBSEQUENT EVENTS
Subsequent to July 31, 2016, the Company issued 827,159,119 shares of common stock for the conversion of various convertible notes as follows:
Note holder
|
|
Share Issued
|
|
|
Principal
Converted
|
|
|
Accrued Interest Converted
|
|
Adar Bays
|
|
|
93,070,925
|
|
|
$
|
13,363
|
|
|
$
|
4,377
|
|
LG
|
|
|
100,525,000
|
|
|
|
3,480
|
|
|
|
1,546
|
|
Rockwell
|
|
|
365,000,000
|
|
|
|
27,250
|
|
|
|
-
|
|
Union
|
|
|
268,563,194
|
|
|
|
19,125
|
|
|
|
4,486
|
|
Total
|
|
|
827,159,119
|
|
|
$
|
63,218
|
|
|
$
|
10,409
|
|
On September 20, 2016, the Company entered into a Cancellation and Release Agreement with Direct Capital Group Inc., as well as N600PG, LLC to extinguish the convertible promissory notes in total value of $822,754. Upon further evaluation of the notes which had been extinguished on May 25, 2016, in exchange for Oil Asset held in the former Source Gold Corp, it was determined by the Company, Golden Matrix Group, Inc., acknowledged and agreed to by Direct Capital Group and N600 PG, LLC that exchanging the oil and mining exploration assets for their outstanding notes.