Debt Disclosure | 3. Notes Payable a) On May 3, 2011, the Company issued a $17,500 note to a non-related party. Under the terms of the note, the amount is unsecured, due interest at 10% per annum, and due on demand. As at February 28, 2014, the Company recorded accrued interest of $4,948 (May 31, 2013 - $3,639), which has been recorded as accrued liabilities. b) On July 1, 2011, the Company issued a $5,000 note to a non-related party. Under the terms of the note, the amount is unsecured, due interest at 10% per annum, and due on demand. As at February 28, 2014, the Company recorded accrued interest of $1,334 (May 31, 2013 - $960), which has been recorded as accrued liabilities. c) On July 5, 2011, the Company issued a $20,000 note to a non-related party. Under the terms of the note, the amount is unsecured, due interest at 10% per annum, and due on demand. As at February 28, 2014, the Company recorded accrued interest of $5,315 (May 31, 2013 - $3,819), which has been recorded as accrued liabilities. d) On October 24, 2011, the Company issued a $20,000 note to a non-related party. Under the terms of the note, the amount is unsecured, due interest at 10% per annum, and due on demand. As at February 28, 2014, the Company recorded accrued interest of $4,871 (May 31, 2013 - $3,375), which has been recorded as accrued liabilities. e) On April 10, 2012, the Company issued a $25,000 note to a non-related party. Under the terms of the note, the amount is unsecured, due interest at 10% per annum, and due on demand. As at February 28, 2014, the Company recorded accrued interest of $4,726 (May 31, 2013 - $2,856), which has been recorded as accrued liabilities. f) Convertible debt On October 10, 2013, the Company issued a convertible note of $20,000 to a related party, the immediate family member of President and Director of the Company. The note accrues interest at 5% per annum and matures in six months. The note is convertible into shares of Companys common stock at a conversion price of $0.25 per share. As at February 28, 2014, the Company recorded accrued interest of $386 (May 31, 2013 - $nil), which has been included as accrued liabilities. The Company evaluated the Note and determined that the shares issuable pursuant to the conversion option were determinate due to the Fixed Conversion Price and, as such, does not constitute a derivative liability. The Company also determined that there is no beneficial conversion feature discount resulting from the conversion price of $0.25 per share above the market price on October 25, 2012 of $0.08 per share. |