3. Convertible Debenture

3 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

3.                Convertible Debenture

On June 7, 2013, the Company entered into a $32,500 convertible debenture with a non-related party. Under the terms of the debenture, the amount is unsecured, bears interest at 8% per annum, and matures on December 7, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (December 4, 2013) at a conversion rate of 50% of the average of the five lowest closing bid prices of the Company’s common stock for the thirty trading days ending one trading date prior to the date the conversion notice is sent by the holder to the Company. As at June 30, 2013, the Company recorded accrued interest of $164 (December 31, 2012 - $nil), which has been included in accounts payable and accrued liabilities.

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 $32,500 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note. During the six months ended June 30, 2013, the Company had amortized $1,372 (December 31, 2012 - $nil) of the debt discount to interest expense. As at June 30, 2013, the carrying value of the debenture was $1,372 (December 31, 2012 - $nil).