Quarterly report pursuant to Section 13 or 15(d)

CONVERTIBLE DEBENTURES (Tables)

v2.4.0.8
CONVERTIBLE DEBENTURES (Tables)
3 Months Ended
Apr. 30, 2014
CONVERTIBLE DEBENTURES (Tables) [Line Items]  
Schedule of Extinguishment of Debt [Table Text Block]

 

For the Three and Six Months Ended April 30, 2014

Face value of debt converted and/or prepaid

$

1,440,000

Less: discount

 

(658,232)

Plus: value of derivative liability

 

1,670,704

Net book value of debt converted

$

2,452,472

Fair value of Common stock and cash issued

 

2,935,387

Loss on extinguishment of debt

$

482,915

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value [Table Text Block]

 

As of

April 30,

2014

 

 

Stock price used for valuation

$

0.34

 

 

6,667 shares issued per $1,000 face value

Aggregate intrinsic value of the $1,150,000 of principal outstanding on April 30, 2014, immediately prior to conversion and repayment

$

1,456,797

 

 

 

Convertible Debt [Table Text Block]

Face value of Convertible Debenture due November 2016

 

 

 

 

$

3,500,000 

Fair value of embedded conversion feature

$

1,570,000

 

 

 

 

Relative fair value of Convertible Debenture Warrant

 

515,936

 

 

 

 

Discount

$

2,085,936

 

 

 

(2,085,936)

Proceeds attributable to the Convertible Debenture due November 2016

 

 

 

 

$

1,414,064

Schedule of Debt Issuance Cost [Table Text Block]

 Attributable to:

 

Accounting Treatment

 


Amount

 

 

 

 

 

 

The embedded conversion feature (derivative)

 

Expensed as incurred

 

$

8,593

The 8% Convertible Debenture Warrant

 

Charged to additional paid-in capital

 

 

2,824

 

 

 

 

 

 

The 8% Convertible Debenture

 

Recorded as deferred issuance costs and amortized under the interest method over the term of the 8% Convertible Debenture

 

 

7,739

Total

 

 

 

$

19,156

Embeded Derivatives Conversion Features [Member]
 
CONVERTIBLE DEBENTURES (Tables) [Line Items]  
Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Table Text Block]

 

As of

November 11,


2013

 

 

Stock price on valuation date

$

0.20

Conversion price

$

0.189

Discount for lack of marketability

 

35.5%

Term (years)

 

3.00

Expected volatility

 

102.8%

Weighted average risk-free interest rate

 

0.62%

Trials

 

100,000

Aggregate fair value

$

1,570,000

 

 

 


 


April 30, 2014

 

 

Stock price used for valuation

$

0.340

Conversion price

 

0.189

Discount for lack of marketability

 

37.8%

Term (years)

 

2.5

Expected volatility

 

103%

Weighted average risk-free interest rate

 

0.65%

Trials

 

100,000

Aggregate fair value

$

2,750,000

 

 

 

Convertible Debenture Warrant [Member]
 
CONVERTIBLE DEBENTURES (Tables) [Line Items]  
Schedule of Assumptions for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Table Text Block]

 

As of

November 11,


2013

 

 

Stock price on valuation date

$

0.20

Exercise price

$

0.378

Discount for lack of marketability

 

22%

Term (years)

 

3.00

 

 

 

Expected volatility

 

102.8%

Weighted average risk-free interest rate

 

0.6%

Number of warrants

 

9,249,472

Aggregate fair value

$

740,000