Convertible Notes Payable | Note 7. Convertible Notes Payable Convertible notes payable consist of the following as of February 29, 2016 and February 28, 2015 : Issued Maturity Interest Rate Conversion Rate per Share Balance February 29, 2016 Balance February 28, 2015 February 28, 2011 February 27, 2013 7% $0.015 $ 32,600 $ 32,600 January 31, 2013 February 28, 2016 10% $0.01 120,562 138,395 May 31, 2013 November 30,2016 10% $0.01 261,595 261,595 November 30, 2013 November 30, 2017 10% $0.01 396,958 396,958 August 31, 2014 August 31, 2016 10% $0.002 355,652 355,652 November 30, 2014 November 30, 2016 10% $0.002 103,950 103,950 February 28, 2015 February 28, 2017 10% $0.001 63,357 63,357 May 31, 2015 May 31, 2017 10% $1.00 65,383 August 31, 2015 August 31, 2017 10% $0.30 91,629 November 30, 2015 November 30, 2018 10% $0.30 269,791 February 3, 2016 February 3, 2017 5% 49% discount 46,000 February 29, 2016 February 28, 2019 10% 60% discount 95,245 Total convertible notes payable $ 1,902,722 $ 1,352,507 Less: short-term convertible notes payable (46,000 ) Less: current portion of convertible notes payable (937,716 ) (829,548 ) Less: discount on noncurrent convertible notes payable (500,485 ) (500,339 ) Convertible notes payable, net of discount $ 418,521 $ 22,620 Current portion of convertible notes payable 937,716 829,548 Less: discount on current portion of convertible notes payable (422,298 ) (380,949 ) Current portion of convertible notes payable, net of discount $ 515,418 $ 448,599 Short-term convertible notes 46,000 Less: discount on short-term convertible notes (7,333 ) Short-term convertible notes, net of discount $ 38,667 $ All of the notes above are unsecured. The notes dated February 28, 2011 and January 31, 2013 are currently is in default and bear default interest at 18% per annum. Convertible notes issued During the year ended February 29, 2016, we refinanced $522,048 of non-interest bearing advances into a convertible note. All principal and accrued interest is payable on the maturity date. Issued Maturity Interest Rate Conversion Rate per Share Amount of Note Original Issue Discount Beneficial Conversion Feature May 31, 2015 May 31, 2017 10% $ 1.00 $ 65,383 $ $ 65,383 August 31, 2015 August 31, 2017 10% 0.30 91,629 91,629 November 30, 2015 November 30, 2018 10% 0.30 269,791 269,791 February 3, 2016 February 3, 2017 5% 49% discount (1) 46,000 6,000 February 29, 2016 February 28, 2019 10% 60% discount (2) 95,245 95,245 Total $ 568,048 $ 6,000 $ 522,048 __________ (1) This note is convertible beginning six months after the date of issuance at 49% discount to the lowest trading price over the preceding 20 trading days (2) This note is convertible at a 60% discount to the volume weighted average closing price over the preceding five trading days, subject to the condition that the conversion price shall never be less than $0.01 per share. During the year ended February 28, 2018, we refinanced $522,959 of non-interest bearing advances into a convertible note. All principal and accrued interest is payable on the maturity date. Issued Maturity Interest Rate Conversion Rate per Share Amount of Note Beneficial Conversion Feature August 31, 2014 August 31, 2016 10% $ 0.002 $ 355,652 $ 355,652 November 30, 2014 November 30, 2016 10% 0.002 103,950 103,950 February 28, 2015 February 28, 2017 10% 0.001 63,357 63,357 Total $ 522,959 $ 522,959 The Company evaluated the terms of the notes in accordance with ASC Topic No. 815 40, Derivatives and Hedging - Contracts in Entitys Own Stock Conversions to common stock During year ended February 29, 2016, the holders of the Convertible Note Payable dated January 31, 2013 elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.01 per share. No gain or loss was recognized on the conversions as they occurred within the terms of the agreement that provided for conversion. Date Amount Converted Number of Shares Issued April 22, 2015 $ 500 50,000 April 23, 2015 500 50,000 May 20, 2015 1,650 165,000 May 21, 2015 250 25,000 June 11, 2015 600 60,000 June 19, 2015 400 40,000 July 1, 2015 1,200 120,000 July 10, 2015 450 45,000 July 16, 2015 940 94,000 July 17, 2015 950 95,000 August 3, 2015 1,450 145,000 August 5, 2015 1,670 167,000 August 10, 2015 1,930 193,000 August 13, 2015 1,000 100,000 August 24, 2015 540 54,000 August 25, 2015 800 80,000 September 11, 2015 1,200 120,000 September 17, 2015 875 87,500 September 24, 2015 1,720 172,000 September 29, 2015 600 60,000 October 2, 2015 1,290 129,000 October 14, 2015 1,020 102,000 October 16, 2015 3,014 301,400 December 22, 2015 3,010 301,000 January 7, 2016 800 80,000 January 18, 2016 1,493 149,300 February 17, 2016 1,530 153,000 Total $ 31,382 3,138,200 During the year ended February 28, 2015, the holders of the Convertible Note Payable dated January 31, 2013 elected to convert principal and accrued interest in the amounts shown below into shares of common stock at a rate of $0.01 per share. No gain or loss was recognized on the conversions as they occurred within the terms of the agreement that provided for conversion. Date Amount Converted Number of Shares Issued March 24, 2014 $ 10,000 2,000 April 25, 2014 10,000 2,000 May 8, 2014 10,000 2,000 May 16, 2014 4,800 960 June 3, 2014 10,000 2,000 June 12, 2014 10,000 2,000 July 18, 2014 12,000 2,400 August 14, 2014 14,000 2,800 September 24, 2014 15,000 3,000 December 5, 2014 16,000 3,200 January 2, 2015 17,000 3,400 February 6, 2015 17,000 3,400 Total $ 145,800 29,160 |