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RELATED PARTY TRANSACTIONS | 12 Months Ended
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Nov. 30, 2018
RELATED PARTY TRANSACTIONS [Text Block] |
8. | RELATED PARTY TRANSACTIONS
| The following transactions are in the normal course of operations and are measured at the amount of consideration established and agreed to by related parties.
| Year ended November 30, 2018 As of November 30, 2018, there are no amounts receivable from related parties. As of November 30, 2018, the Company had a payable of $137,780 to related parties. During the year ended November 30, 2018, the Company reimbursed directors for travel and related expenses for $94,000. Effective as of October 1, 2017, the Company entered into an employment agreement (the “Employment Agreement”) with Paul Jensen (“Jensen”) pursuant to which Jensen serves as President and Chief Operating Officer (“COO”) and effective July 13, 2018 serves as CEO of the Company. By the terms of the Employment Agreement, Jensen will receive an annual salary of $200,000, payable as follows. For the period beginning on October 1, 2017 and ending on June 30, 2018, Jensen shall receive quarterly payments of the Company’s common stock, to be issued 15 days after the end of each three-month quarter. Commencing July 1, 2018, the Company will pay $10,000 per month in cash and the balance in Company common stock. At such time as the Company can pay the entire salary in cash and be cash positive on an operating basis, the entire monthly salary will be paid in cash. The Company expensed $200,000 for the services for the year ended November 30, 2018 which includes $136,667 for issuance of 882,303 common shares for services and an accrual for $13,333 for issuance of proportionate shares, in accordance with the consulting contract (See notes 5, 11, and 19). The Company expensed $45,500 for services provided by Rakesh Malhotra, Chief Financial Officer (“CFO”) of the Company which was paid to a corporation in which the CFO has an ownership interest, pursuant to the consulting contract (See note 19). The Company expensed $156,580, which includes $27,600 for the issuance of 180,000 common shares for services and an accrual for $19,200 for issuance of proportionate shares, pursuant to a consulting contract, for services provided by Dean Thrasher, the CEO until July 13, 2018 and effective July 13, 2018, the executive chairman of the Company. This was paid to a corporation in which Dean Thrasher has an ownership interest. (See notes 5, 11 and 19). On March 27, 2017, the board of directors granted options to the CEO to acquire a total of 1,150,000 common shares. The Company expensed $39,046 for the value of options which vested during this period (See note 6). In March 2018, the Company made a share issuance to NEIP under a consulting agreement. The Company issued 507,550 common shares at a price of $0.1231 per share to satisfy the payment of $62,500 due in December 2017 (See note 5). On April 13, 2018, the Company employed Buys as the CTO with compensation of $10,000 per month over a three-year period. The Company expensed $75,000 during the year ended November 30, 2018. On April 13, 2018, the Company granted options to Buys to acquire a total of 1,500,000 common shares. The Company expensed $10,568 for the value of options which vested during this period. (See notes 6 and 11) Effective June 1, 2018 the Company entered into a consulting agreement with Ganz pursuant to which Ganz serves as President of the Company. By the terms of the consulting agreement, Ganz will be paid annually $200,000 in the Company’s common shares for his services and subject to stock exchange approval. The common shares shall be issued quarterly, ending March 31, 2019. For the Company’s third and fourth 2018 fiscal quarters, Ganz shall be paid 500,000 common shares for each quarter. The Company expensed $149,466 being cost for services being compensated by issuance of shares, which includes $72,573 for common shares issued for services and an accrual for $76,893 for issuance of proportionate shares, in accordance with the consulting contract (See notes 5, 11 and 19). During the year ended November 30, 2018, the Company issued 400,000 options to directors. The Company expensed $48,730 for the grant date fair value of options which vested during the year. On October 22, 2018, the Company entered into a Securities Purchase Agreement with several accredited investors to sell $1,275,000 of units, with each $1,000 of unit consisting of (i) a $1,000 10% interest unsecured convertible promissory note (collectively the “Notes”) due April 15, 2020, convertible into the Company’s Common Stock at a conversion price of $0.15 per share, and (ii) four thousand (4,000) warrants each exercisable for one share of Common Stock at an exercise price of $0.25 per share on or before the five year anniversary of the issuance. The directors of the Company subscribed for a total value of $100,000 of units. Effective December 1, 2017, the Company leased office premises at Wakefield, Massachusetts, USA for rent of $700 plus services per month from a corporation owned and controlled by a director of the Company. The Company expensed $12,939 as office rent for the year ended November 30, 2018. As of November 30, 2018, the Company has a payable for $3,353 for the rent.
Year ended November 30, 2017
| As of November 30, 2017, there are no amounts receivable from related parties. As of November 30, 2017, the Company had a payable of $110,833 to related parties. During the year ended November 30, 2017, the Company reimbursed directors for travel and related expenses for $32,500.
| Effective July 21, 2016, Bryan Ganz was elected as a director of the Company. Prior to his appointment, effective May 1, 2016, the Company executed a one-year consulting agreement with Northeast Industrial Partners, LLC (“NEIP”), a corporation in which the said director has an ownership interest. In January 2017, the Company issued 589,414 common shares at a price of $0.1142 per share to satisfy the payment of $50,000 due on November 15, 2016. In March 2017, the Company issued 503,251 common shares at a price of $0.0994 per share to satisfy the payment of $50,000 due on February 15, 2017. In May 2017, the Company made the final share issuance and issued 534,941 common shares at a price of $0.0935 per share to satisfy the payment of $50,000 due on May 15, 2017. Effective May 1, 2017, the Company and NEIP renewed the agreement. For services rendered by NEIP during the extension, SDI shall pay NEIP $62,500 within 15 days following every consecutive three-month period during the extension. The payment shall be made by issuance of stock.
| In September 2017, the Company made a further share issuance to NEIP and issued 498,423 common shares at a price of $0.1254 per share to satisfy the payment of $62,500 due in August 2017. The agreement was terminated on October 31, 2017. The Company accrued a payable for $62,500 as of November 30, 2017 and this expense was subsequently settled and paid by issuance of shares during the year ended November 30, 2018 (See note 5). In addition, the Company executed a one-year back-office accounting and administration services agreement with NEIP effective January 1, 2017 to pay compensation of $7,500 per month. As at November 30, 2017, the Company has an outstanding payable to NEIP of $15,000 under this back- office accounting and administration services agreement. The Company expensed $82,500 for services provided during the year ended November 30, 2017.
| On December 7, 2016, NEIP participated in the 10% senior secured convertible debt issuance by investing $100,000 in a private placement along with outside investors. This debt along with interest of $17,178 was settled in November 2017 by issuance of 1,105,454 units at $0.106 per unit being the same terms as the private placement.
| Effective as of October 1, 2017, the Company entered into an Employment Agreement with Jensen. By the terms of the Employment Agreement, Jensen will receive an annual salary of $200,000, payable as follows. For the period beginning on October 1, 2017 and ending on June 30, 2018, Jensen shall receive quarterly payments of the Company’s common stock, to be issued 15 days after the end of each three-month quarter (see Note 11). The Company accrued a payable for $33,333 for the months of October and November as of November 30, 2017 and this expense was subsequently settled and paid by the issue of shares during the year ended November 30, 2018 (See note 5).
| On November 28, 2017, Paul Jenson and Don Levintin participated in the issuance of units by investing $100,000 and $7,500, respectively, in the private placement along with outside investors.
| On August 10, 2017, the Company issued a promissory note to Don Levintin, a director of the Company for cash advance receipt for $72,585 (CAD $89,040) at 12% per annum and repayable on February 16, 2018. In November 2017, the said note was settled, and the director was issued 684,762 units at $0.106 per unit being the same terms as the private placement.
| The Company expensed $37,000 for services provided by the CFO of the Company which was paid to a corporation in which the CFO has an ownership interest. The Company expensed $156,000 (CAD$200,000) for services provided by the CEO of the Company and which was paid part in salary and part to two corporations in which the CEO has an ownership interest, in accordance with the consulting contract. During the year ended November 30, 2017, the Company issued 2,141,667 options to directors. The Company expensed $186,704 for fair value of options which vested during this period.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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