Quarterly report pursuant to Section 13 or 15(d)

Convertible Debentures

v3.19.3
Convertible Debentures
9 Months Ended
May 31, 2019
Convertible Debentures [Abstract]  
CONVERTIBLE DEBENTURES

13. CONVERTIBLE DEBENTURES

 

              Principal due     Principal due  
Lender   Maturity Date   Interest Rate     May 31,
2019
    August 31,
2018
 
                       
Alpha Capital Anstalt   October 31, 2018     5.00 %   $ -     $ 56,500  
Private lenders   January 1, 2019     0.00 %     -       201,904  
GS Capital Partners   May 1, 2019     12.00 %     143,750       -  
Calvary Fund I LP   September 4, 2019     10.00 %     250,000       250,000  
Calvary Fund I LP   September 4, 2019     10.00 %     250,000       -  
SBI Investments LLC   September 4, 2019     10.00 %     250,000       -  
Bay Private Equity, Inc.   September 17, 2019     5.00 %     2,900,000       -  
Bay Private Equity, Inc   October 15, 2019     5.00 %     2,400,000       -  
                  6,193,750       508,404  
Unamortized debt discount                 (936,190 )     -  
Total loans               $ 5,257,560     $ 508,404  

 

The maturity date of the convertible debentures are as follows:

 

    May 31,
2019
    August 31,
2018
 
             
Principal classified as repayable within one year   $ 5,257,560     $ 258,404  
Principal classified as repayable later than one year     -       250,000  
    $ 5,257,560     $ 508,404  

 

  (a) Alpha Capital Anstalt

 

On August 31, 2017, the Company issued a convertible secured note for $565,000 to Alpha Capital Anstalt. The convertible secured note bears interest at a rate of 5% per annum and matures on October 31, 2018. The convertible secured note is convertible into units, consisting of one common share of the Company and one common share purchase warrant of the Company, at a conversion price of $0.29 per unit until August 31, 2022. Each warrant would entitle the holder to acquire one additional common share at an exercise price of $0.315 per share until August 31, 2022. The convertible secured note is secured by all of the assets of the Company.

 

From December 19, 2017 to May 22, 2018, a total of $508,500 of the principal of the convertible secured notes was converted into 1,753,447 units. From March 16, 2018 to July 11, 2018, Alpha Capital Anstalt exercised a total of 1,753,447 warrants to purchase 1,753,447 common shares of the Company. On December 3, 2018, the remaining $56,500 and accrued interest thereon of $13,479 was settled by the issue of 145,788 common shares.

 

(b) Private lenders

 

According to the terms of an amendment made with two debenture holders and the Company on February 9, 2018, a portion of their debentures was convertible into common shares (see Note 12(a)(iii)). On September 11, 2018, the remaining convertible portion of the debenture was converted into common shares of the Company through the issue of 316,223 common shares of the Company

 

(c) GS Capital Partners

 

During December 2018, the Company issued a convertible debenture of $143,750 including an original issue discount of $18,750, together with warrants exercisable for 260,416 shares of common stock at an exercise price of $0.48 per share with a maturity date of April 29, 2019. The debenture has a term of four months and one day and bears interest at a rate of 10% per annum payable at maturity and at the option of the holder the purchase amount of the debenture (excluding the original issue discount of 15%) is convertible into 260,416 common shares of the Company at $0.48 per share in accordance with the terms and conditions set out in the debenture.

 

(d) Calvary Fund I LP

 

On September 4, 2018, the Company issued units to Calvary Fund I LP for $250,000, which was originally advanced on August 9, 2018. The units consist of 250 units of $1,000 convertible debenture and 1,149,424 commons share purchase warrants. The convertible debenture bears interest at 10%, matures on September 4, 2019 and is convertible one common share of the Company at a price of $0.87 per common share. The common share purchase warrants entitle the holder to acquire additional common shares of the Company at a price of $0.87 per share and expires on September 4, 2019.

 

(e) Calvary Fund I LP

 

On October 12, 2018, the Company entered into an agreement with Calvary Fund I LP whereby the Company issued 250 one year units for proceeds of $250,000, each unit consisting of a $1,000 principal convertible unsecured debenture, bearing interest at 10% per annum and convertible into common shares at $0.86 per share, and a warrant exercisable for 1,162 common shares at an exercise price of $0.86 per share.

 

(f) SBI Investments, LLC

 

On October 15, 2018, the Company entered into an agreement with SBI Investments LLC whereby the Company issued 250 one year units for proceeds of $250,000, each debenture consisting of a $1,000 principal convertible unsecured debenture, bearing interest at 10% per annum and convertible into common shares at $0.86 per share, and a warrant exercisable for 1,162 shares of common stock at an exercise price of $0.86 per share.

 

(g) Bay Private Equity, Inc.

 

On September 17, 2018, the Company issued 3 one year convertible units of $1,100,000 each to Bay Private Equity, Inc. ("Bay") for net proceeds of $2,979,980 related to this agreement. These units bear interest at 5% per annum and mature one year from the date of issue. Each unit consists of one senior secured convertible debenture of $1,100,000 and 250,000 common share purchase warrants. Each convertible debenture may be converted to common shares of the Company at a conversion price of $1.00 per share. Each common share purchase warrant entitles the holder to purchase an additional common share of the Company at a price of $1.10 per share for one year after the issue date. On January 23, 2019, $400,000 of the principal outstanding was repaid out of the proceeds raised on the Bay Private Equity convertible debenture (see Note 13(h)).

 

(h) Bay Private Equity, Inc.

 

On January 16, 2019, the Company issued a convertible debenture of $2,400,000, including an original issue discount of $400,000, to Bay for net proceeds of $2,000,000 related to this agreement. The convertible debenture bears interest at 5% per annum and matures on October 19, 2019. The convertible debenture may be converted to 5,000,000 common shares of the Company at a conversion price of $0.40 per share. $400,000 of the proceeds raised was used to repay a portion of the $3,300,000 convertible debenture issued to Bay Private Equity on September 17, 2018 (see Note 13(g)).