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Note 3 - Related Party Transactions
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6 Months Ended |
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Feb. 28, 2014
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| Related Party Transactions [Abstract] | |
| Related Party Transactions Disclosure [Text Block] |
Note 3 – Related Party Transactions
Notes Payable
From time to time the Company has received loans from the former CEO, Robert Timothy, to fund operations. The total outstanding balance of the unsecured, demand notes, bearing interest at 8% was $5,445 and $5,445 at May 31, 2013 and August 31, 2012, respectively. Accrued interest of $1,576 and $1,251 was outstanding as of May 31, 2013 and August 31, 2012, respectively.
From time to time the Company has received loans from the Company’s CEO, Gerald Ricks, to fund operations. The total outstanding balance of the unsecured, demand notes, bearing interest at 8% was $22,519 and $22,519 at May 31, 2013 and August 31, 2012, respectively. Accrued interest of $3,024 and $1,677 was outstanding as of May 31, 2013 and August 31, 2012, respectively.
From time to time the Company has received loans from a major shareholder, BK Consulting, to fund operations. The total outstanding balance of the unsecured, demand notes, bearing interest at 8% was $27,230 and $15,573 at May 31, 2013 and August 31, 2012. Accrued interest of $2,803 and $1,625 was outstanding as of May 31, 2013 and August 31, 2012, respectively.
On June 3, 2013 the Company amended the terms of the above notes whereby the outstanding principal in the amount of $55,194 and any accrued interest as of May 31, 2013 would be convertible into the Company’s common stock at a rate of $0.002 per share at the holder’s discretion. As of June 3, 2013 the notes no longer bear interest. As a result the Company reclassified $55,194 of notes payable and $7,403 of accrued interest to convertible debt during the three months ended August 31, 2013.
Conversion of Notes Payable
During the six months ended February 28, 2014, the Company converted $25,543 of convertible debt due to the Company’s CEO, Gerald Ricks, into 12,771,500 shares of common stock.
During the six months ended February 28, 2014, the Company converted $7,021 of convertible debt due to the Company’s former CEO, Robert Timothy, into 3,510,500 shares of common stock.
During the six months ended February 28, 2014, the Company converted $30,033 of convertible debt due to the Company’s major shareholder, BK Consulting, into 15,016,500 shares of common stock.
The above note conversions were converted within the conversion terms. The Company recorded no gain or loss related to the conversion of these notes.
Convertible Notes Payable
During the year ended August 31, 2013 the Company issued convertible promissory notes for aggregate proceeds in the amount of $5,471. The loans are non-interest bearing and convertible at the holder’s discretion into Common Stock at a price of $0.002 per share.
On September 3, 2013 the Company received an unsecured convertible loan of $23, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On October 1, 2013 the Company received an unsecured convertible loan of $24, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On October 7, 2013 the Company received an unsecured convertible loan of $1,650 non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On October 17, 2013 the Company received an unsecured convertible loan of $1,500, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On November 1, 2013 the Company received an unsecured convertible loan of $25, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On November 4, 2013 the Company received an unsecured convertible loan of $50, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On November 13, 2013 the Company received an unsecured convertible loan of $2,000, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from BK Consulting, to fund operations.
On December 3, 2013 the Company received an unsecured convertible loan of $2,495, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from a major shareholder, BK Consulting, to fund operations.
On January 3, 2014 the Company received an unsecured convertible loan of $10, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from a major shareholder, BK Consulting, to fund operations.
On January 6, 2014 the Company received an unsecured convertible loan of $1,829, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from a major shareholder, BK Consulting, to fund operations.
On January 13, 2014 the Company received an unsecured convertible loan of $1,250, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from a major shareholder, BK Consulting, to fund operations.
On January 14, 2014 the Company received an unsecured convertible loan of $1,950, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from a major shareholder, BK Consulting, to fund operations.
On February 3, 2014 the Company received an unsecured convertible loan of $12, non-interest bearing, due on demand and convertible into Common Stock at a rate $0.002 per share, from a major shareholder, BK Consulting, to fund operations.
As of February 28, 2014 and August 31, 2013 the balance of the convertible debt was $18,289 and $68,068. The Company recorded imputed interest in the amount of $465 and $0 during the six months ended February 28, 2014 and 2013 at a rate of 8% on the outstanding convertible notes.
Discounts on Convertible Notes Payable
The Company calculates any beneficial conversion feature embedded in its convertible notes via the intrinsic value method. The conversion feature was considered a discount to the notes, to the extent the aggregate value of the conversion feature did not exceed the face value of the notes. These discounts are amortized to interest expense through earlier of the term or conversion of the notes. During the six months ended February 28, 2014 and 2013 the Company recorded debt discounts in the amount of $12,818 and $0. During the six months ended February 28, 2014 and 2013 the Company amortized debt discounts to interest expense in the aggregate amount of $12,818 and $0.
Change in Management
On December 15, 2010, the former CEO, Robert Timothy, resigned as from the Board of Directors and his position as CEO, and appointed Gerald Ricks as the Chairman of the Board of Directors and CEO.
On December 30, 2010, the Board of Directors dismissed Ronald Schurman as Secretary and Treasurer and appointed Vincent Kelly to the Board and positions of Secretary and Treasurer.
On December 31, 2010, the Board of Directors appointed James Hughes to the Board of Directors.
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