| SHORT-TERM NOTE PAYABLE |
NOTE 6. SHORT-TERM NOTE PAYABLE
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March 31, 2018 |
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December 31, 2017 |
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Nominal
interest rate |
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Date of
maturity |
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Face value |
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Carrying
amount |
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Face value |
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|
Carrying
amount |
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| Current portion of truck loan (i) |
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5.49 |
% |
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January 6, 2022 |
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$ |
32,582 |
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|
$ |
32,582 |
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$ |
32,582 |
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$ |
32,582 |
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| Promissory note (ii) |
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12 |
% |
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June 30, 2018 |
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37,613 |
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|
42,127 |
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— |
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— |
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| Promissory note (iii) |
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12 |
% |
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June 30, 2018 |
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36,451 |
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39,747 |
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— |
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— |
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| Bukit Energy Inc. (iv) |
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8.5 |
% |
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Dec 15, 2017 |
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500,000 |
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538,677 |
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— |
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— |
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| Credit note (v) |
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9 |
% |
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May 11, 2021 |
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800,000 |
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835,855 |
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— |
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— |
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$ |
1,406,646 |
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$ |
1,488,988 |
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$ |
32,582 |
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|
$ |
32,582 |
|
The promissory notes are repayable in full on maturity. The
difference between the face value and carrying amount is attributed to accrued interest.
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(i) |
On January 6, 2017, the Company purchased a truck and entered into an installment note with Don Ringer Toyota in the amount of $35,677 for a term of five years at 5.49% annual percentage rate (APR). |
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(ii) |
The note matures on February 28, 2018 and carries interest at 12% per annum. The note was extended to June 30, 2018. |
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(iii) |
The note matures on February 28, 2018 and carries interest at 12% per annum. The note was extended to June 30, 2018. |
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(iv) |
In conjunction with the closing of the purchase of the Bukit assets, Bow issued a note payable to Bukit Energy Inc. of $500,000 with interest at the rate of 8.5% per annum, calculated monthly, not in advance, on the principal amount. The note matured on August 31, 2017. The note was extended to December 15, 2017. The note is in default and remained in default at the time of issuance of these financial statements. |
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(v) |
Bow has a loan in default of $800,000. The credit note is secured by a general security agreement over the assets of Bow. Interest accrues monthly and is recorded at 9% on the full amount of the original issued notes of USD $1,100,000. The note is in default and remained in default at the time of issuance of these financial statements. The debt holder also was issued warrants to purchase 320,000 shares of common stock exercisable at $0.08 per share, expiring February 27, 2021. The warrants were valued at $103,633 using the Black Scholes options pricing model with volatility of 283%, discount rate of 2.42% and call option value of $0.32. The note was amended on May 9, 2018. Terms of which, are disclosed in Note 12. |
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