Notes And Debentures Payable | 9 Months Ended |
Nov. 30, 2013 |
Debt Disclosure [Abstract] | ' |
Notes and Debentures Payable | ' |
NOTE 6 – Notes and Debentures Payable |
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During 2011, 2012 and 2013, a third party loaned the Company $610,000. These loans are unsecured and payable a year from the signed note. A $200,000 loan is accruing 10% simple interest annually and the remaining $410,000 in loans accrue at15% simple interest annually. Of these notes, $260,000 is in default as of November 30, 2013 and $40,000 of this amount accrues interest at the default interest rate of 25%. As of November 30, 2013, the Company owed $610,000 in principal and $106,106 in interest on these notes. |
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As a condition of closing the change of control transaction identified in Note 6 below, the Note (including interest) in the amount of $716,106 was converted to a Convertible Note Payable. This amount has been purchased by an outside third party. |
Following the conversions to common stock of $100,000 on September 19th, and $70,000 on November 20th, 2013, the Company owes $546,106 in principal and $30,196 in interest as of November 30, 2013. |
On September 1, 2011, $110,000 was owed to a third party. This loan is unsecured, accruing 15% simple interest annually and payable on August 31, 2012. This note is now in default as of November 30, 2013 and accruing interest at the default interest rate of 25%. As of November 30, 2013, the Company owes $110,000 in principal and $34,342 in interest on this note. |
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As a condition of closing the change of control transaction identified in Note 6 below, the Note (including interest) in the amount of $144,342 was converted to a Convertible Note Payable. This amount has been purchased by an outside third party. |
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Current Liabilities: Convertible Notes - Third Parties |
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As of November 30, 2013, the Company had convertible notes from third parties including accrued interest in the amount of $768,876. Terms include $730,448 with simple interest accruing to the principal at a rate of 10 percent annually for a total of $38,428. The notes may be converted at the option of the Holder at fixed rate of $0.075 per share. The embedded conversion options are classified as liabilities under ASC 815. . The maturity date of the notes is August 14, 2014. |
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Additionally, as of November 30, 2013, the Company had a convertible note from third parties including accrued interest in the amount of $78,706. Terms include $78,500 with simple interest accruing to the principal at a rate of 8.0 percent annually for a total of $206. On May 18, 2014, the note may be converted at the option of the Holder at a "variable conversion price" representing a discount rate of 42% to the current market price defined as the average of the lowest three (3) trading prices for the common stock during the (10) trading day period ending on the latest complete trading day prior to the conversion date. The maturity date of the notes is August 14, 2014. |
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As of November 30, 2013, the Company had convertible debentures from third parties including accrued interest in the amount of $374,043. Terms include $370,000 with simple interest accruing to the principal at a rate of 10 percent annually for a total of $10,456. The notes may be converted at the option of the Holder at a rate of 50% of the average of the previous 5 days closing price on the common stock. The embedded conversion options are classified as liabilities under ASC 815. |
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Current Liabilities: Notes Payable - Related Parties |
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As of November 30, 2013, the Company had advances from corporate officers of $86,500. The advances are non-interest bearing and have no maturity assigned as of November 30, 2013. |
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Long-Term Liabilities: Note Payable - Third Party |
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As of November 30, 2013, the Company had a long-term note payable from a third party including accrued interest of $26,603. Terms include $25,000 with interest at 15% annually for $1,603. The maturity date is January 31, 2015. |
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Long-Term Liabilities: Note Payable - Related Party |
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As of November 30, 2013, the Company had a long-term note payable from related parties including accrued interest of $79,808. Terms include $75,000 with interest at 15% annually for $4,808. The maturity date is November 29, 2014. |