Convertible Debentures Payable

12 Months Ended

Feb. 28, 2022

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 was recorded accordingly to the new Maturity Date of December 31, 2023.

During the year ended February 28, 2022, the Company received gross proceeds of $75,000 for an issuance of a senior secured convertible debenture. The senior secured convertible debenture was issued on November 10, 2021 with a maturity date of December 31, 2023. Table below provides a summary of the senior secured convertible debentures issued through February 28, 2022 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 28, 2021:
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
Debt discount from warrant grant from debt modification											942,812
Amortized discount as of February 28, 2021											(6,204,925	)
Balance as of February 28, 2021									6,850,000		1,455,404		$	5,394,596
Activity for the year ended February 28, 2022:
XII	Nov 10, 2021	December 31, 2023		8	%	$	0.16		75,000
Amortization of discount for the year ended February 28, 2022											(448,149	)
Balance as of February 28, 2022								$	6,925,000	$	1,007,255		$	5,917,745

The preceding table does not reflect two additional Debentures issued after February 28, 2022. See the footnote captioned “11. Subsequent Events” below.

The Company recognized $448,149 and $1,592,604 of debt discount amortization during the years ended February 28, 2022 and February 28, 2021, respectively. During the years ended February 28, 2022 and February 28, 2021, the Company incurred interest expense directly related to the Convertible Debentures of $795,991 and $733,681, respectively, at a rate of 8% per year, compounded quarterly.