CONVERTIBLE DEBENTURES
|
6 Months Ended |
---|---|
Nov. 30, 2012
|
|
CONVERTIBLE DEBENTURES | |
CONVERTIBLE DEBENTURES | 4. CONVERTIBLE DEBENTURE a) On May 18, 2012 the Company issued a convertible debenture in the amount of $125,000. The convertible debenture is unsecured, bears interest at 10% per annum, is due on May 18, 2014 and is convertible at the holder's discretion into shares of the Company's common stock at $0.10 per share. As of November 30, 2012, $6,747 (May 31, 2012 - $nil) was included in accrued interest. b) On July 10, 2012 the Company issued a convertible debenture in the amount of $100,000. The convertible debenture is unsecured, bears interest at 10% per annum, is due on July 10, 2014 and is convertible at the holder's discretion into shares of the Company's common stock at $0.10 per share. As of November 30, 2012, $3,918 (May 31, 2012 - $nil) was included in accrued interest. 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 $44,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note up to its face value of $100,000 using the effective interest method. As at November 30, 2012, the Company recorded accretion expense of $7,568, and as at November 30, 2012, the book value of the convertible debenture was $63,568. c) On September 7, 2012 the Company issued a convertible debenture in the amount of $35,000. The convertible debenture is unsecured, bears interest at 10% per annum, is due on September 7, 2014 and is convertible at the holder's discretion into shares of the Company's common stock at $0.10 per share. As of November 30, 2012, $805 (May 31, 2012 - $nil) was included in accrued interest. 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 $7,700 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note up to its face value of $35,000 using the effective interest method. As at November 30, 2012, the Company recorded accretion expense of $877, and as at November 30, 2012, the book value of the convertible debenture was $28,177. d) On October 12, 2012 the Company issued a convertible debenture in the amount of $30,000. The convertible debenture is unsecured, bears interest at 10% per annum, is due on October 12, 2014 and is convertible at the holder's discretion into shares of the Company's common stock at $0.10 per share. As of November 30, 2012, $403 (May 31, 2012 - $nil) was included in accrued interest. 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 $24,000 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note up to its face value of $30,000 using the effective interest method. As at November 30, 2012, the Company recorded accretion expense of $894, and as at November 30, 2012, the book value of the convertible debenture was $6,894. |