NSAV - To Much Convertible Debt Here...
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4. Convertible Promissory Notes Payable
During the six months ended May 31, 2014, the holder of two Convertible Promissory Notes elected to convert a total of
$25,815 in principal and $2,000 in interest into 63,671,719 shares of the Company's common stock at an average conversion
price of $0.0004 per share.
During February 2014, NSL issued an Unsecured Convertible Promissory Note for $23,700 (the "February 2014 Convertible
Promissory Note"). The February 2014 Convertible Promissory Note is unsecured, due nine months from the date of issuance,
accrues interest at 8% per annum and is convertible into shares of NSL's common stock at any time at the option of the holder
at a discount from market of 50% of the fair market value of one share of NSL's common stock based on the lowest bid during
the thirty days prior to the conversion date.
During April 2014, NSL issued an Unsecured Convertible Promissory Note for $5,000 (the "April 2014 Convertible
Promissory Note"). The April 2014 Convertible Promissory Note is unsecured, due nine months from the date of issuance,
accrues interest at 8% per annum and is convertible into shares of NSL's common stock at any time at the option of the holder
at a discount from market of 35% of the fair market value of one share of NSL's common stock based on the average of the
three lowest bid prices during the thirty days prior to the conversion date.
During the six months ended May 31, 2014, two Convertible Promissory Notes became convertible into shares of the
Company's common stock. The fair value of the conversion options was determined to be $309,807 using a Black-Scholes
option-pricing model. Upon the date the Convertible Promissory Notes became convertible, $57,500 was recorded as debt
discount and $252,307 was recorded as day one loss on derivative liability.
During the six months ended May 31, 2014, $25,815 in principal amounts of Convertible Promissory Notes were converted into
common stock (see Notes 4 and 6), $54,819 in related derivative liability was extinguished through a charge to paid-in capital
and $137,606 was recorded as a net loss on mark-to-market of the conversion options and warrants.
-IMHO
