Convertible Debentures Payable

12 Months Ended

Feb. 28, 2021

Debt Disclosure [Abstract]

Convertible Debentures Payable

7. Convertible Debentures Payable

From May 27, 2016 through May 16, 2018, the Company issued eleven rounds (I thru XI) of senior secured convertible debentures, the proceeds of which have funded the initial Nike Survey with respect to the Prospect, the interpretation of seismic data acquired, expenses associated with the Nike Survey, costs associated with the debenture issuances, and general and administrative expenses. The debentures are secured by virtually all of the Company’s assets owned, directly or indirectly, but for the License. As discussed elsewhere, the Company may in the future sell additional senior secured convertible debentures having the same terms as those currently outstanding. The Maturity Date of the Debentures was extended to December 31, 2023. Due to the extension, a debt modification was determined and the amortization of discount for the twelve months ended February 28, 2021 was recorded accordingly to the new Maturity Date of December 31, 2023. Table below provides a summary of the senior secured convertible debentures issued through February 28, 2021 and related debt discount and amortization details.

Round	Issue Date	Maturity Date	Interest Rate			Conversion Price		Principal Amount		Debt Discount				Debentures, net of Debt Discount
Outstanding as of February 29, 2020:
I	May 27, 2016	December 31, 2023		8	%	$	0.16	$	3,500,000	$	3,500,000
II	Aug 16, 2016	December 31, 2023		8	%	$	0.16		200,000		199,999
	Aug 16, 2016	December 31, 2023		8	%	$	0.16		250,000		250,000
III	Dec 30, 2016	December 31, 2023		8	%	$	0.16		287,500		237,587
IV	Feb 15, 2017	December 31, 2023		8	%	$	0.16		1,000,000		1,000,000
V	Mar 31,2017	December 31, 2023		8	%	$	0.20		200,000		200,000
VI	Jul 5, 2017	December 31, 2023		8	%	$	0.20		137,500		137,500
	Jul 5, 2017	December 31, 2023		8	%	$	0.16		150,000		150,000
VII	Sept 19, 2017	December 31, 2023		8	%	$	0.16		400,000		400,000
	Sept 19, 2017	December 31, 2023		8	%	$	0.16		100,000		82,125
VIII	Oct 10, 2017	December 31, 2023		8	%	$	0.20		137,500		72,806
IX	Jan 3, 2018	December 31, 2023		8	%	$	0.20		137,500		137,500
X	April 2, 2018	December 31, 2023		8	%	$	0.20		137,500		137,500
XI	May 16, 2018	December 31, 2023		8	%	$	0.20		212,500		212,500
Amortized discount as of February 29, 2020											(4,612,321	)
Balance as of February 29, 2020									6,850,000		2,105,196		$	4,744,804
Activity for the twelve months ended February 28, 2021:
Debt discount from warrant grant from debt modification											942,812
Amortization of discount for the twelve months ended February 28, 2021											(1,592,604	)
Balance as of February 28, 2021								$	6,850,000	$	1,455,404		$	5,394,596

The Company recognized $1,592,604 and $1,562,777 of debt discount amortization during the years ended February 28, 2021 and February 29, 2020, respectively. During the years ended February 28, 2021 and February 29, 2020, the Company incurred interest expense directly related to the Convertible Debentures of $733,681 and $680,284, respectively, at a rate of 8% per year, compounded quarterly.