Note 7 - Convertible Notes Payable |
6 Months Ended |
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Feb. 29, 2016 | |
| Debt Disclosure [Abstract] | |
| Debt Disclosure [Text Block] |
Note 7 – Convertible Notes Payable
On October 28, 2015, the Company issued an unsecured convertible loan of $1,700, 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. The Company calculated the beneficial conversion feature embedded in the convertible note. The conversion feature, in the amount of $1,700, was recorded as debt discount.
On November 2, 2015, the Company converted $29,500 of convertible debt due to the Company’s major shareholder, BK Consulting, into 14,750,400 shares of common stock at a conversion price of $0.002. As the note conversion occurred within the terms of the agreement, no gain or loss was recognized.
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 29, 2016 and February 28, 2015, the Company recorded debt discounts in the amount of $1,700 and $11,443, respectively. During the six months ended February 29, 2016 and February 28, 2015, the Company amortized debt discounts to interest expense in the aggregate amount of $1,700 and $11,443.
On November 10, 2015, the Company converted $10,744 of convertible debt due to the debt holder, BK Consulting, into 5,371,500 shares of common stock at a conversion price of $0.002. As the note conversion occurred within the terms of the agreement, no gain or loss was recognized.
As of February 29, 2016 and August 31, 2015 the balance of the convertible debt was $0 and $38,543. The Company records imputed interest on all outstanding convertible notes at a rate of 8%. The Company recorded imputed interest in the amount of $557 and $810 during the six months ended February 29, 2016 and February 28, 2015.
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