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12. Short term convertible note payable
12 Months Ended
Dec. 31, 2014
Payables and Accruals [Abstract]  
12. Short term convertible note payable

12. Short term convertible note payable

 

The Company has one short-term loan agreement during the period totalling $42,465. During the year ended December 31, 2014, an amount of $127,076 was converted into 2,245,991 common shares.

 

The loan is with JMJ Financial in the amount of $42,465. The lender has the right, at any time after 180 days from effective date to convert all or part of the outstanding and unpaid principal sum and accrued interest into shares of common stock, based on the average of the two lowest closing prices during the 22 days prior start of conversion period.

 

The Company has identified the beneficial conversion feature related to the above-described notes. The accounting treatment of beneficial conversion features requires that the Company record fair value of the discount as of the date when the funds were received. The determined fair value of the beneficial conversion feature was charged as a debt discount up to the net proceeds of the note with the remainder if any charged to current period operations as non-cash interest expense.

 

At December 31, 2014 the debt discount on these notes amounted to $12,708.