Related Party Transactions

9 Months Ended

Oct. 31, 2015

Notes

Related Party Transactions

NOTE 5: Related Party Transactions

As of October 31, 2015 and January 31, 2015, related parties are due a total of $276,910 and $244,295, respectively, which is comprised of $236,045 and $186,045, respectively, in cash loans to the Company, $59,000 and $0 in  accrued compensation converted to convertible notes payable , $14,135 and $0 of unamortized discount on convertible notes payable,  and $(4,000) and $58,250, respectively, in accrued (prepaid) compensation.

Related party transactions consist of the following:

	October 31, 2015			January 31, 2015
Related party payable (prepaid)-compensation	$	(4,000	)	$	58,250
Notes payable for loans to the Company		––			22,000
Convertible notes payable for loans to the Company		236,045			164,045
Convertible notes payable for unpaid compensation		59,000			––
Less: unamortized discount		(14,135	)		––
Total convertible notes payable, net of unamortized discount		280,910			164,045
Total related party loans		280,910			186,045
Total related party transactions	$	276,910		$	244,295

Related party convertible notes payable consists of the following unsecured promissory notes:

Description	Principal			Interest Rate	Conversion Rate	Maturity Date
Note Payable	$	236,045		5%	FMV	01/31/2016
Note Payable	$	59,000		6%	80% of FMV	10/01/2017
Less: unamortized discount		(14,135	)
Note Payable, net of unamortized discount	$	44,865

On October 1, 2015, the Company issued its President a convertible promissory note in the principal amount of $59,000 for unpaid compensation.  The note bears interest at a rate of 6% per annum, matures on October 1, 2017, and contains a repayment provision to convert the debt into the Company's common stock at a rate of 80% of the fair market value of the common stock on the date of conversion.  The conversion discount of 20% of FMV results in a beneficial conversion feature.  As a result, the difference between the conversion rate and the market rate of $14,750 has been classified as a discount on the note.  As of October 31, 2015,  the Company expensed $615 in discount amortization.  As of October 31, 2015, $14,135 of unamortized discount remains, and will be amortized over the next 23 months.

All outstanding related party notes payable bear interest at a rate of between 5% to 6% per annum, mature between January 31, 2017 to October 1, 2017, and are convertible into the Company’s common stock at a per share rate equal to the fair market value on the date of conversion or 80% thereof. Interest in the amount of $12,059 and $2,941 has been accrued as of October 31, 2015 and January 31, 2015, respectively, and is included as an accrued expense on the accompanying balance sheets.

As of October 31, 2015 and January 31, 2015, the Company has accrued $12,059 and $4,306, respectively, in interest on related party loans.