5. Convertible Debentures

12 Months Ended

Dec. 31, 2013

Convertible Debentures [Abstract]

Convertible Debentures

5.Convertible Debentures

On December 6, 2012, the Company entered into a convertible promissory note agreement for $150,000. Pursuant to the agreement, the loan is unsecured, bears interest at 10% per annum, and is due on December 5, 2014. The note is also convertible into common shares at a conversion price equal to 25% of the average of the three lowest closing prices for the Company’s common shares in the ten trading days prior to conversion, at the option of the note holder, commencing on December 6, 2012.

In accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities”, the Company recognized the fair value of the embedded derivative conversion option of $150,000 as a debt discount and is amortizing it over the life of the note using the effective interest method. During the years ended December 31, 2013 and 2012, the Company recorded accretion expense of $21,363 and $5,144, respectively.