6. Convertible Debentures

Convertible Debentures (Ontario)

In fiscal 2015, the Company issued two tranches, one in April and one in September, of secured convertible debentures with identical terms and maturity dates (together, “the Debentures”) for gross proceeds of $492,500. The Company incurred $39,400 in broker’s commissions resulting in net proceeds of $453,100. The Debentures bear interest at a rate of 8% per annum, with interest payments due semi-annually. The Debentures matured on April 30, 2017, and are currently in default. The debentures became immediately due and payable in default at the request of the note holders. However, the note holders have not made any request for immediate payment. There are no additional terms in the event of default. The Debentures are convertible at any time, in whole, to shares of common stock at a conversion price of $0.15 per share. On July 7, 2023, the Company negotiated settlement of six of its noteholders in exchange for preferred shares of the Company’s stock. In accordance with the agreement, there was 7,644,000 shares of preferred shares issued for settlement of $252,500 principal and $205,986 in accrued interest. At June 30, 2026 and December 31, 2025, the principal balance on these notes was $240,000 and $240,000 and accrued interest was $338,712 and $316,119, respectively.

The conversion feature was determined to be an embedded derivative; however, since the instrument is a conventional convertible debenture the conversion feature was not bifurcated. Additionally, the conversion feature was determined not to be beneficial in both tranches as the fair value of the Company’s share price at the date of issuance was less than the conversion price. Accordingly, no proceeds were allocated to the value of the conversion feature on initial recognition.

Ontario Limitation Period and Enforceability - Each of these debentures was issued in Ontario to an Ontario resident, is payable in Ontario, and stipulates Ontario law as its governing law. The Company has obtained a written opinion of Ontario counsel that the two-year limitation period under the Limitations Act, 2002 (Ontario) expired on April 30, 2025, that the debentures are no longer enforceable against the Company, and that no proceeding could be brought on the related security interests. The opinion has been added to the exhibits (see exhibit 99.1).

Other Convertible Debentures

On August 13, 2018, the Company entered into a secured convertible debenture agreement (the “convertible debenture”) with a service provider amounting to $12,000. The convertible debenture bears interest at 10% per annum calculated monthly and payable on maturity and had a maturity date of August 13, 2021. The debentures became immediately due and payable in default at the request of the note holders. However, the note holders have not made any request for immediate payment. There are no additional terms in the event of default. The conversion price is $0.06 per share. At June 30, 2026 and December 31, 2025, the principal balance on these notes was $12,000 and $12,000 and accrued interest was $9,462 and $8,867, respectively.

On August 10, 2023, the Company entered into a secured convertible debenture agreement (the “convertible debenture”) with a service provider amounting to $10,000. The convertible debenture bears interest at 10% per annum calculated monthly and payable on maturity and had a maturity date of August 10, 2024. The conversion price is $0.001 per share. On March 20, 2024, the Company issued 2,000,000 shares of common stock for the conversion of $2,000 of this principal balance outstanding. The 2,000,000 shares of common stock were valued at $0.15 per share for a value of $30,000. The Company recognized a loss on the extinguishment of debt of $28,000. At June 30, 2026 and December 31, 2025, the principal balance on this note was $8,000 and $8,000 and accrued interest was $2,438 and $2,042, respectively.