Note 9 - Convertible Notes Payable | 9 Months Ended |
Mar. 31, 2014 |
Notes | ' |
Note 9 - Convertible Notes Payable | ' |
Note 9 – Convertible Notes Payable |
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| | | | March 31, | | June 30, |
| | | | 2014 | | 2013 |
| Note #2 | | - | | 20,500 |
| Note #3 | | - | | 32,500 |
| Note #4 | | - | | 37,500 |
| Note #5 | | 10,287 | | 30,000 |
| Note #6 | | 29,410 | | - |
| Note #7 | | 11,000 | | - |
| Note #8 | | 11,000 | | - |
| Note #9 | | 11,000 | | - |
| Note #10 | | 46,215 | | - |
| Note #11 | | 82,504 | | - |
| Note #12 | | 16,000 | | - |
| Note #13 | | 16,000 | | - |
| Note #14 | | 16,000 | | - |
| Note #15 | | 16,000 | | - |
| Note #16 | | - | | - |
| Note #17 | | 23,000 | | - |
| Note #18 | | 20,000 | | - |
| Note #19 | | 16,000 | | - |
| Note #20 | | 16,000 | | - |
| | | | $ 340,416 | | $ 120,500 |
| | Debt discount | (161,984) | | (16,400) |
| | Accrued interest | 15,248 | | 3,085 |
| | | | $ 193,680 | | $ 107,185 |
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Asher Note #2 |
On December 12, 2012, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $32,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of September 14, 2013. The Asher Note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $230 (nine month period ended March 31, 2013 - $719) in interest expense. |
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $66,237 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 nine month period ended March 31, 2014, the Company recorded a gain of $68,008 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $16,400 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 12,871,237common shares upon the conversion of $20,500 of the principal balance and $1,300 interest, and $31,340 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $nil (March 31, 2013 - $719), debt discount of $nil (March 31, 2013 - $nil) and a derivative liability of $nil (March 31, 2013 - $nil) was recorded. |
Asher Note #3 |
On January 30, 2013, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $32,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of November 1, 2013. The Asher Note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $1,229 (nine month period ended March 31, 2013 - $427) in interest expense. |
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $48,237 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 nine month period ended March 31, 2014, the Company recorded a loss of $33,554 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $32,500 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 57,091,170 common shares upon the conversion of $32,500 of the principal balance and $1,300 in interest, and $81,791 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $1,005 (March 31, 2013 - $427), debt discount of $nil (March 31, 2013 - $nil) and a derivative liability of $nil (March 31, 2013 - $nil) was recorded. |
Asher Note #4 |
On April 12, 2013, the Company executed an Unsecured Promissory Note (the “Asher Note”) to Asher Enterprises, Inc. (“Asher”). Under the terms of the Asher Note, the Company has borrowed a total of $37,500 from Asher, which accrues interest at an annual rate of 8% and has a maturity date of January 16, 2014. The Asher Note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $1,504 (nine month period ended March 31, 2013 - $nil) in interest expense. |
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $50,735 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 nine month period ended March 31, 2014, the Company recorded a gain of $10,696 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $37,500 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 63,661,604 common shares upon the conversion of $37,500 of the principal balance, $1,500 in interest and $40,039 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $662 (March 31, 2013 - $nil), debt discount of $nil (March 31, 2013 - $nil) and a derivative liability of $nil (March 31, 2013 - $nil) was recorded. |
Gel Properties Note #5 |
On June 28, 2013, the Company issued a convertible promissory note to Gel Properties, LLC. Under the terms of the note, the Company has borrowed a total of $30,000 from Gel Properties, LLC, which accrues interest at an annual rate of 6% and has a maturity date of June 28, 2014. The note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $699 (nine month period ended March 31, 2013 - $nil) in interest expense. |
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $45,055 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 nine month period ended March 31, 2014, the Company recorded a loss of $61,936 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $27,336 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 127,600,000 common shares upon the conversion of $19,713 of the principal balance and $95,077 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $709 (March 31, 2013 - $nil), debt discount of $2,664 (March 31, 2013 - $nil) and a derivative liability of $11,914 (March 31, 2013 - $nil) was recorded. |
JMJ Financial Note #6 |
On July 18, 2013, the Company issued a convertible promissory note to JMJ Financial, LLC. Under the terms of the note, the Company borrowed $25,000 on July18, 2013 and $31,540 on February 20, 2014 for a total of $56,540 from JMJ Financial. In the event the Company does not repay note on or within 90 days of the date the funds were distributed, a one-time interest charge of 12% will be applied to the principal balance. The note has a maturity date of July 18, 2014 for the first payment and February 20, 2015 for the second payment. The note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $3,000 (nine month period ended March 31, 2013 - $nil) in interest expense. |
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $87,901 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 nine month period ended March 31, 2014, the Company recorded a gain of $13,577 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $28,130 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 70,800,000 common shares upon the conversion of $27,130 of the principal balance and $36,894 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $3,000 (March 31, 2013 - $nil), debt discount of $28,410 (March 31, 2013 - $nil) and a derivative liability of $37,430 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #7 |
On July 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $581 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,000 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $581 (March 31, 2013 - $nil) and debt discount of $nil (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #8 |
On August 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $506 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,000 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $506 (March 31, 2013 - $nil) and debt discount of $nil (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #9 |
On September 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $434 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $11,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $10,970 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $434 (March 31, 2013 - $nil) and debt discount of $30 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #10 |
On September 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $46,215. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $1,824 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $46,215 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $46,090 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $1,824 (March 31, 2013 - $nil) and debt discount of $125 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #11 |
On October 11, 2013, the Company arranged a debt swap whereas Direct Capital Group acquired the debt from a former related party in the amount $190,084.The promissory note is unsecured, bears interest at 6% per annum. During the ninemonth period ending March 31, 2014, the Company accrued $4,359 (nine month period ended March 31, 2013 - $nil) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $218,091 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 nine month period ended March 31, 2014, the Company recorded a gain of $97,456 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $151,338 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
On January 31, 2014, the Company transferred $50,000 of the note to Coventry Enterprises, LLC and $25,000 of the notes to Prolific Group, LLC. |
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During the nine month period ended March 31, 2014, the Company issued 25,774,468 common shares upon the conversion of $32,580 of the principal balance and $25,085 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $4,359 (March 31, 2013 - $nil), debt discount of $38,746 (March 31, 2013 - $nil) and a derivative liability of $95,550 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #12 |
On October 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $526 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $14,188 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $526 (March 31, 2013 - $nil) and debt discount of $1,812 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #13 |
On November 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $421 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $11,497 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $421 (March 31, 2013 - $nil) and debt discount of $4,503 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #14 |
On December 31, 2013 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $312 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $7,912 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $312 (March 31, 2013 - $nil) and debt discount of $8,088 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #15 |
On January 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $207 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $5,187 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $207 (March 31, 2013 - $nil) and debt discount of $10,813 (March 31, 2013 - $nil) was recorded. |
Coventry Enterprises Note #16 |
On January 31, 2014, the Company arranged a debt swap under which a Direct Capital note for $50,000 was transferred to Coventry Enterprises, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on January 31, 2015. The note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $244 (nine month period ended March 31, 2013 - $nil) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $171,962 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 nine month period ended March 31, 2014, the Company recorded a gain of $117,103 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $50,000 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 92,556,773 common shares upon the conversion of $50,000 of the principal balance and $54,859 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $244 (March 31, 2013 - $nil), debt discount of $nil (March 31, 2013 - $nil) and a derivative liability of $nil (March 31, 2013 - $nil) was recorded. |
Prolific Group Note #17 |
On January 31, 2014, the Company arranged a debt swap under which a Direct Capital note for $25,000 was transferred to Prolific Group, LLC. The promissory note is unsecured, bears interest at 6% per annum and matures on January 31, 2015. The note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $229 (nine month period ended March 31, 2013 - $nil) in interest expense. |
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Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $85,981 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 nine month period ended March 31, 2014, the Company recorded a gain of $41,050 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $5,718 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 22,000,000 common shares upon the conversion of $2,000 of the principal balance and $18,294 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $229 (March 31, 2013 - $nil), debt discount of $19,282 (March 31, 2013 - $nil) and a derivative liability of $26,637 (March 31, 2013 - $nil) was recorded. |
LG Capital Note #18 |
On February 26, 2014, the Company executed an Unsecured Promissory Noteto LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $30,000, which accrues interest at an annual rate of 8% and has a maturity date of February 26, 2015. The note also contains customary events of default. During the nine month period ended March 31, 2014, the Company accrued $188 (nine month period ended March 31, 2013 - $nil) in interest expense. |
Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $36,343 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 nine month period ended March 31, 2014, the Company recorded a loss of $5,558 (nine month period ended March 31, 2013 - $nil) due to the change in value of the derivative liability during the period, and debt discount of $11,808 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
During the nine month period ended March 31, 2014, the Company issued 26,147,186 common shares upon the conversion of $10,000 of the principal balance and $67 of interest, and $18,739 of the derivative liability was re-classified as additional paid in capital upon conversion. |
As at March 31, 2014, accrued interest of $122 (March 31, 2013 - $nil), debt discount of $18,192 (March 31, 2013 - $nil) and a derivative liability of $23,162 (March 31, 2013- $nil) was recorded. |
Direct Capital Group Note #19 |
On February 28, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $109 (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $2,681 (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $109 (March 31, 2013 - $nil) and debt discount of $13,319 (March 31, 2013 - $nil) was recorded. |
Direct Capital Group Note #20 |
On March 31, 2014 the Company entered into a Convertible Promissory Note with Direct Capital Group in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. 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. During the nine month period ended March 31, 2014, the Company accrued $nil (March 31, 2013 - $nil) in interest expense. |
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. |
During the nine month period ended March 31, 2014 interest expense relating to the beneficial conversion feature of this convertible note of $16,000 (March 31, 2013 - $nil) was recorded in the financial statements, with a corresponding increase to additional paid in capital and debt discount of $nil (nine month period ended March 31, 2013 - $nil) was accreted to the statement of operations. |
As at March 31, 2014, accrued interest of $nil (March 31, 2013 - $nil) and debt discount of $16,000 (March 31, 2013 - $nil) was recorded. |
Note 10 – Derivative Liabilities |
The Company issued financial instruments in the form of convertible notes with embedded conversion features. The convertible notes payable have conversion rates which are indexed to the market value of the Company’s commonstock price. |
During the nine month period ending March 31, 2014, $231,923 of convertible notes payable were converted into common stock of the Company. |
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These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP. The valuation assumptions are classified within Level 3 inputs. |
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The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above: |
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| | March 31, | | | | |
| | 2014 | | | | |
Balance, beginning of year | | $ 99,348 | | | | |
Initial recognition of derivative liability | | 744,305 | | | | |
Fair value change in derivative liability | | (246,842) | | | | |
Conversion of derivative liability to APIC | | | | | | |
Note #2 | | (31,340) | | | | |
Note #3 | | (81,791) | | | | |
Note #4 | | (40,039) | | | | |
Note #5 | | (95,077) | | | | |
Note #6 | | (36,894) | | | | |
Note #11 | | (25,085) | | | | |
Note #16 | | (54,859) | | | | |
Note #17 | | (18,294) | | | | |
Note #18 | | (18,739) | | | | |
Balance as of March 31, 2014 | | $ 194,693 | | | | |
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