Convertible Notes Payable | Note 6. Convertible Notes Payable Convertible notes payable consist of the following as of February 28, 2017 and February 29, 2016 : Issued Maturity Interest Rate Conversion Rate per Share Balance February 28, 2017 Balance February 29, 2016 February 28, 2011 February 27, 2013 * 7% $0.015 $ 32,600 $ 32,600 January 31, 2013 February 28, 2016 * 10% $0.01 119,091 120,562 May 31, 2013 November 30,2016 * 10% $0.01 261,595 261,595 November 30, 2013 November 30, 2017 10% $0.01 394,458 396,958 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 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 5,299 46,000 February 29, 2016 February 28, 2019 10% 60% discount 95,245 95,245 March 22, 2016 March 22, 2017 10% .003 60,000 — May 31, 2016 May 31, 2019 10% .003 35,100 — July 18,2016 July 18,2017 10% .003 6,500 — August 30,2016 August 30,2017 10% .003 — — September 6, 2016 September 6, 2017 10% .003 31,320 — January 4, 2017 January 4, 2018 — — 1,320 — January 13, 2017 October 13, 2017 — — 38,000 — Total convertible notes payable $ 2,030,290 $ 1,902,722 Noncurrent convertible notes payable 400,136 919,006 Less: discount on noncurrent convertible notes payable (358,159 ) (500,485 ) Noncurrent convertible notes payable, net of discount $ 41,977 $ 418,521 Current portion of convertible notes payable 1,630,154 983,716 Less: discount on current portion of convertible notes payable (80,420 ) (429,631 ) Current portion of convertible notes payable, net of discount $ 1,549,734 $ 554,085 * The indicated notes were is in default as of February 28, 2017 and bear default interest of between 18% and 25% per annum. During the year ended February 28, 2017, we incurred original issue discounts of $17,820 and derivative discount of $59,500 on convertible notes issued during that period. These amounts are included in discounts on convertible notes payable and are being amortized to interest expense over the life of the notes. During the year ended February 28, 2017, we incurred default penalties of $46,000 on the notes dated February 3, 2016 and March 22, 2016. The penalties were added to the principal of the notes. We also issued a note of $75,000 to an individual for proceeds of $50,000 and a fee of $25,000 that was not paid as of February 28, 2017. The note is non-interest bearing. All of the notes above are unsecured. As of February 28, 2017, we had accrued interest payable of $497,278. Convertible notes issued During the year ended February 28, 2017, we refinanced $35,100 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, 2016 May 31, 2017 10% $ 0.30 $ 35,100 $ — $ 35,100 Total $ 35,100 $ 0 $ 35,100 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. The Company evaluated the terms of the notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock Conversions to common stock During year ended February 28, 2017, the holders of certain Convertible Note Payable elected to convert principal and accrued interest in the amounts shown below into shares of common stock. No gain or loss was recognized on the conversions as they occurred within the terms of the agreement that provided for conversion. Conversion Principal Interest Total Amount Shares Date Converted Converted Converted Converted March 1, 2016 $ 1,471 $ 429 $ 1,900 190,000 August 8, 2016 9,870 — 9,870 175,000 August 26, 2016 9,425 — 9,425 264,000 September 8, 2016 6,000 3 6,003 193,633 September 9, 2016 7,268 — 7,268 285,000 September 22, 2016 3,065 — 3,065 299,000 September 29, 2016 1,550 8 1,558 259,635 September 29, 2016 1,928 — 1,928 315,000 October 7, 2016 973 — 973 360,000 October 10, 2016 1,700 13 1,713 339,142 November 7, 2016 1,870 25 1,895 715,249 November 23, 2016 2,110 36 2,146 715,356 December 2, 2016 2,930 56 2,986 891,304 December 19, 2016 3,620 82 3,702 892,173 December 28, 2016 2,605 65 2,670 1,067,808 January 5, 2017 580 — 580 580,000 January 24, 2017 1,865 57 1,922 1,130,723 January 25, 2017 1,077 — 1,077 621,000 January 27, 2017 750 24 774 455,005 January 30, 2017 600 — 600 600,000 February 7, 2017 1,630 — 1,630 761,000 February 13, 2017 1,711 — 1,711 799,000 February 22, 2017 1,754 — 1,754 839,000 Total $ 66,352 $ 798 $ 67,150 12,748,028 During year ended February 29, 2016, the holders of certain Convertible Note Payable elected to convert principal and accrued interest in the amounts shown below into shares of common stock. 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 |