3. Convertible Debentures | 6 Months Ended |
Jun. 30, 2014 |
Debt Disclosure [Abstract] | ' |
Debt Disclosure [Text Block] | ' |
3 | Convertible Debentures | |
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| a) | On June 7, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on December 7, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (December 4, 2013) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2014, the Company recorded accrued interest of $2,764 (December, 31, 2013 - $1,475), which has been included in accounts payable and accrued liabilities. |
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| | In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. On April 9, 2014, the Company issued 8,571,429 common shares for the conversion of $12,000 of this debenture. During the period ended June 30, 2014, the Company had amortized $12,961 (December, 31, 2013 - $4,116) of the debt discount to interest expense. As at June 30, 2014, the carrying value of the debenture was $5,077 (December, 31, 2013 - $4,116). |
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| | On December 4, 2013, the note became convertible resulting in the Company recording a derivative liability of $46,532 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at June 30, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $2,414 (December 31, 2013 - $1,011 gain on change in fair value of derivative liabilities) as a loss on change in fair value of derivative liabilities. As at June 30, 2014, the fair value of the derivative liability was $30,549 (December, 31, 2013 - $45,521). Refer to Note 4. |
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| b) | On July 15, 2013, the Company entered into a $27,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on January 16, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2014, the Company recorded accrued interest of $2,113 (December, 31, 2013 - $1,019), which has been included in accounts payable and accrued liabilities. |
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In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $27,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended June 30, 2014, the Company had amortized $5,401(December, 31, 2013 - $2,779) of the debt discount to interest expense. As at June 30, 2014, the carrying value of the debenture was $8,180 (December, 31, 2013 - $2,779). |
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On January 11, 2014, the note became convertible resulting in the Company recording a derivative liability of $36,272 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at June 30, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $2,580 (December 31, 2013 - $nil) as a loss on change in fair value of derivative liabilities. As at June 30, 2014, the fair value of the derivative liability was $38,852 (December, 31, 2013 - $nil). Refer to Note 4. |
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| c) | On October 4, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on July 8, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (April 2, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2014, the Company recorded accrued interest of $1,916 (December, 31, 2013 - $627), which has been included in accounts payable and accrued liabilities. |
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| | In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended June 30, 2014, the Company had amortized $2,713 (December, 31, 2013 - $1,618) of the debt discount to interest expense. As at June 30, 2014, the carrying value of the debenture was $4,331 (December, 31, 2013 - $1,618) |
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| | On April 2, 2014, the note became convertible resulting in the Company recording a derivative liability of $47,794 with a corresponding adjustment to loss on change in fair value of derivative liabilities. As at June 30, 2014, the Company revalued the derivative liability to its fair value resulting in the Company recording $2,617 (December 31, 2013 - $nil) as a gain on change in fair value of derivative liabilities. As at June 30, 2014, the fair value of the derivative liability was $45,177 (December, 31, 2013 - $nil). Refer to Note 4. |
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| d) | On February 18, 2014, the Company entered into a $15,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and is due on August 20, 2015. The note is convertible into shares of common stock 180 days after the date of issuance (August 17, 2014) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company's common stock for the thirty trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2014, the Company recorded accrued interest of $448 (December, 31, 2013 - $nil), which has been included in accounts payable and accrued liabilities. |
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In accordance with ASC 470-20, "Debt with Conversion and Other Options", the Company recognized the intrinsic value of the embedded beneficial conversion feature of $15,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the period ended June 30, 2014, the Company had amortized $590 (December, 31, 2013 - $nil) of the debt discount to interest expense. As at June 30, 2014, the carrying value of the debenture was $590 (December, 31, 2013 - $nil). |
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As the note does not become convertible until August 17, 2014, the Company has not yet recognized any derivative liability associated with this note. |
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