4. CONVERTIBLE DEBENTURES
a) On April 5, 2013, the Company entered into a convertible promissory note agreement for $46,000. Pursuant to the agreement, the loan is unsecured, bears interest at 6% per annum, and is due on April 5, 2016. The note is convertible into common shares of the Company at any time at a conversion price of $0.01 at the option of the note holder. As at October 31, 2013, accrued interest of $1,588 (2012 - $nil) has been recorded in accounts payable and accrued liabilities.
In accordance with ASC 470-20, the Company recognized the intrinsic value of the embedded beneficial conversion feature of $4,600 as additional paid-in capital and an equivalent discount which will be charged to operations over the term of the convertible note up to its face value of $46,000. For the nine months ended October 31, 2013, $882 (2012 - $nil) had been accreted, increasing the carrying value to $42,282 (January 31, 2013 - $nil).
10
Independence Energy Corp.
(An Exploration Stage Company)
Notes to the Condensed Financial Statements
(expressed in U.S. dollars)
4. CONVERTIBLE DEBENTURES (continued)
b) On July 15, 2013, the Company issued a $57,000 convertible note which is unsecured, bears interest at 8% per annum and due on April 17, 2014. The note is convertible into shares of common stock 180 days after the date of issuance (January 11, 2014) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company's common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum. As at October 31, 2013, accrued interest of $1,349 (2012 - $nil) has been recorded in accounts payable and accrued liabilities.
c) On September 17, 2013, the Company issued a $32,500 convertible note which is unsecured, bears interest at 8% per annum and due on June 19, 2014. The Company received $30,000, net of issuance fee of $2,500. The note is convertible into shares of common stock 180 days after the date of issuance (March 16, 2014) at a conversion rate of 58% of the average of the three lowest closing bid prices of the Company's common stock for the ten trading days ending one trading day prior to the date the conversion notice is sent by the holder to the Company. Upon an event of default, the entire principal balance and accrued interest outstanding is due immediately, and interest shall accrue on the unpaid principal balance at 22% per annum. As at October 31, 2013, accrued interest of $321 (2012 - $nil) has been recorded in accounts payable and accrued liabilities.
Take that, you OTC SCAMS!
