Note 8 Convertible Notes Payable

6 Months Ended

May. 31, 2015

Note 8 Convertible Notes Payable

	May 31, 2015	November 30, 2014
	May 31, 2015	November 30, 2014
Promissory Note #6	20,000	20,000
Promissory Note #7	20,000	20,000
Promissory Note #8	20,000	20,000
Promissory Note #10	30,000	30,000
Promissory Note #13	3,895	12,710
Promissory Note #15	47,625	88,000
Promissory Note #16	10,325	11,000
Promissory Note #17	-	11,000
Promissory Note #18	-	50,000
Promissory Note #19	-	11,000
Promissory Note #20	-	11,000
Promissory Note #21	-	16,000
Promissory Note #22	-	50,000
Promissory Note #23	16,000	16,000
Promissory Note #24	16,000	16,000
Promissory Note #25	16,000	16,000
Promissory Note #26	16,000	16,000
Promissory Note #27	16,000	16,000
Promissory Note #28	16,000	16,000
Promissory Note #29	-	48,000
Promissory Note #30	75,000	75,000
Promissory Note #31	220,486	220,486
Promissory Note #32	300,000	-
Promissory Note #33	360,000	-
Promissory Note #34	75,000	-
Promissory Note #35	39,255	-
Promissory Note #36	30,000	-
Promissory Note #37	13,500	-
Promissory Note #38	25,000	-
Promissory Note #39	42,000	-
Promissory Note #40	55,000	-
Promissory Note #41	19,194	-
Promissory Note #42	25,000	-
Promissory Note #43	31,500	-
Promissory Note #44	35,000	-
Promissory Note #45	51,861	-
Promissory Note #46	75,000	-
	$ 1,720,641	$ 790,196
Debt discount	(389,758)	(234,649)
Accrued interest	142,348	83,746
Total	$ 1,473,231	$ 639,293

As at May 31, 2015 and November 30, 2014, convertible notes payable are recorded net of unamortized debt discount of $389,758 and $234,649 respectively.

Promissory Note #6

On February 15, 2012, the Company received $20,000 cash and the Company issued a convertible promissory note in the amount of $20,000. The promissory note is unsecured, interest free and repayable upon demand.

Promissory Note #7

Promissory Note #8

Promissory Note #10

On March 20, 2012, the Company received $30,000 cash and the Company issued a convertible promissory note in the amount of $30,000. The promissory note is unsecured, interest free and repayable upon demand.

The note may be converted at the option of the holder into common stock of the Company. The fixed conversion price is $0.01 per share. Accordingly, the note may be converted into 3,000,000 common shares of the Company. The note also contains a provision whereby should the Company perform a stock split or reverse stock split, the conversion price of the note reverts to the lesser of 40% of market value at the time of conversion, or $0.01 per share. Accordingly, subsequent to the period end on June 14, 2013, this conversion provision was triggered.

The Company determined that Promissory notes # 6, 7, 8, and 10 should be accounted for in accordance with FASB ASC 470-20, which addresses “Accounting for Convertible Securities with Beneficial Conversion Features". The intrinsic value of the conversion feature is calculated as the difference between the conversion price $0.01 and the fair value of the common stock into which the debt is convertible at the commitment date (being $0.05 for notes # 6, 7 and 8 and $0.02 for note 10), multiplied by the number of shares into which the debt is convertible. The valuation of the beneficial conversion feature is calculated as pro rata portion of the proceeds from issuance of the convertible debt, being equal to proceeds received multiplied by intrinsic value divided by the total value received (i.e. the aggregate of proceeds and intrinsic value). This beneficial conversion feature is allocated to debt discount and additional paid in capital. Because the debt is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of convertible notes of $0 (six months endedMay 31, 2014 - $0) was recorded in the financial statements, with a corresponding increase to additional paid in capital.

Promissory Note #13

On September 12, 2012, the Company received $75,000 cash and the Company issued a convertible promissory note in the amount of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 14, 2013. Any principal amount not paid by the maturity date bears interest at 22% per annum. During the six months endedMay 31, 2015, the Company accrued $973 (six months endedMay 31, 2014 - $1,837) in interest expense.

After 180 days the note may be converted at the option of the holder into Common stock of the Company. The conversion price is defined as “50% multiplied by market price where market price is determined as the average of the lowest three bid prices during the ten trading days prior to the date of conversion”. The Company determined that the embedded conversion feature would be a derivative liability based upon its variable conversion terms once the holder’s conversion rights were triggered.

In March 2013, upon the holders’ option to convert becoming active, the Company recorded debt discount of $75,000, charged $1,800 to interest expense and also recorded a derivative liability of $76,800 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term on the note or to the date of conversion. The derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $12,374 (six months endedMay 31, 2014 – gain of $2,472) due to the change in value of the derivative liability during the period.

During the six months endedMay 31, 2015, the Company issued 4,971,060 common shares upon the conversion of $8,815 of the principal balance into common stock, and $25,179 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of May 31, 2015, principal balance of $3,895 (May 31, 2014 - $30,140), accrued interest of $15,547 (May 31, 2014 - $9,018) and a derivative liability of $7,766 (May 31, 2014 - $29,565) was recorded.

Promissory Note #15

On June 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $88,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 1, 2013. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $8,142 (six months endedMay 31, 2014 - $3,510) in interest expense.

A portion of the proceeds from issuance of the convertible debt, equal to the intrinsic value, is allocated to additional paid-in capital. Because the debt is due on demand and is convertible at the date of issuance, the valuation of the beneficial conversion feature is charged to interest expense at the date of issuance.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $481) was accreted to the statement of operations.

During the six months endedMay 31, 2015, the Company issued 4,225,000 common shares upon the conversion of $5,375 of the principal balance into common stock.

On March 26, 2015, the Company transferred $35,000 of the note balance to Adar Bays, LLC.

As of May 31, 2015, principal amount of $47,625 (May 31, 2014 - $88,000) and accrued interest of $31,012 (May 31, 2014 - $7,020) was recorded.

Promissory Note #16

On July 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on January 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,160 (six months endedMay 31, 2014 - $439) in interest expense.

During the six months endedMay 31, 2015, the Company issued 675,000 common shares upon the conversion of $675 of the principal balance into common stock.

As of May 31, 2015, principal amount of $10,325 (May 31, 2014 - $11,000) and accrued interest of $3,811 (May 31, 2014 - $805) was recorded.

Promissory Note #17

On August 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $703 (six months endedMay 31, 2014 - $439) in interest expense.

On March 16, 2015, the Company transferred $11,000 of the principal balance and $2,262 of interest to Service Trading Company, LLC.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $11,000) and accrued interest of $887 (May 31, 2014 - $731) was recorded.

Promissory Note #18

On August 7, 2013 the Company entered into a Convertible Promissory Note with Syndication Capital in the sum of $50,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 7, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $3,195 (six months endedMay 31, 2014 - $1,994) in interest expense.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $50,000) and accrued interest of $9,003 (May 31, 2014 - $3,254) was recorded.

Promissory Note #19

On September 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $703 (six months endedMay 31, 2014 - $439) in interest expense.

On March 16, 2015, the Company transferred $11,000 of the principal balance and $2,262 of interest to Service Trading Company, LLC.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $11,000) and accrued interest of $691 (May 31, 2014 - $656) was recorded.

Promissory Note #20

On October 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $11,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $703 (six months endedMay 31, 2014 - $439) in interest expense.

On March 16, 2015, the Company transferred $11,000 of the principal balance and $250 of interest to GW Holdings Group, LLC.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $11,000) and accrued interest of $2,503 (May 31, 2014 - $584) was recorded.

Promissory Note #21

On November 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,022 (six months endedMay 31, 2014 - $639) in interest expense.

On March 16, 2015, the Company transferred $16,000 of the principal balance and $250 of interest to GW Holdings Group, LLC.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $16,000) and accrued interest of $3,461 (May 31, 2014 - $741) was recorded.

Promissory Note #22

On November 30, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $50,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on May 30, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $2,381 (six months endedMay 31, 2014 - $1,994) in interest expense.

On February 17, 2015, the Company transferred $50,000 of the principal balance and $4,822 of interest to Union Capital, LLC.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $50,000) and accrued interest of $5,088 (May 31, 2014 - $1,994) was recorded.

Promissory Note #23

On December 1, 2013 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on June 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,755 (six months endedMay 31, 2014 - $635) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $16,000) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $15,955) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $16,000 (May 31, 2014 - $16,000) and accrued interest of $4,145 (May 31, 2014 - $635) was recorded.

Promissory Note #24

On January 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,755 (six months endedMay 31, 2014 - $526) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $16,000) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $14,138) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $16,000 (May 31, 2014 - $16,000) and accrued interest of $3,856 (May 31, 2014 - $526) was recorded.

Promissory Note #25

On February 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on August 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,755 (six months endedMay 31, 2014 - $418) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $16,000) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $11,337) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $16,000 (May 31, 2014 - $16,000), accrued interest of $3,557 (May 31, 2014 - $418) was recorded.

Promissory Note #26

On March 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on September 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,755 (six months endedMay 31, 2014 - $319) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $16,000) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $7,913) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $16,000 (May 31, 2014 - $16,000) and accrued interest of $3,265 (May 31, 2014 - $319 was recorded.

Promissory Note #27

On April 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,755 (six months endedMay 31, 2014 - $210) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $16,000) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $5,246) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $16,000 (May 31, 2014 - $0) and accrued interest of $2,976 (May 31, 2014 - $210) was recorded.

Promissory Note #28

On May 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $16,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on November 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $1,755 (six months endedMay 31, 2014 - $105) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $16,000) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $2,609) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $16,000 (May 31, 2014 - $16,000) and accrued interest of $2,680 (May 31, 2014 - $105) was recorded.

Promissory Note #29

On June 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $48,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 1, 2014. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $4,282 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $132 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

On April 27, 2015, the Company transferred $48,000 of the principal balance and $3,861 of interest to Union Capital, LLC.

As of May 31, 2015, principal amount of $0 (May 31, 2014 - $0) and accrued interest of $2,335 (May 31, 2014 - $0) was recorded.

Promissory Note #30

On October 1, 2014 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on April 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $4,718 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $0 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $50,275 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $75,000 (May 31, 2014 - $0), accrued interest of $5,704 (May 31, 2014 - $0) and debt discount of $0 (May 31, 2014 - $0) was recorded.

Promissory Note #31

On October 1, 2014, the Company entered into a Convertible Promissory note with New Venture Attorneys, PC in the sum of $220,486. The promissory note is unsecured, bears interest at 8% per annum, and matures on October 1, 2015. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $8,795 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $294,767 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $111,842 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $147,670 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal balance of $220,486 (May 31, 2014 - $0), accrued interest of $11,695 (May 31, 2014- $0), debt discount of $36,572 (May 31, 2014 - $0) and a derivative liability of $401,541 (May 31, 2014 - $0) was recorded.

Promissory Note #32

On January 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $300,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $9,863 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $300,000 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $265,084 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $300,000 (May 31, 2014 - $0), accrued interest of $9,863 (May 31, 2014 - $0) and debt discount of $34,916 (May 31, 2014 - $0) was recorded.

Promissory Note #33

On January 1, 2015 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $360,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .00001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $11,836 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $360,000 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $318,100 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $360,000 (May 31, 2014 - $0), accrued interest of $11,836 (May 31, 2014 - $0) and debt discount of $41,900 (May 31, 2014 - $0) was recorded.

Promissory Note #34

On January 2, 2015 the Company entered into a Convertible Promissory Note with Direct Capital in the sum of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on July 2, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $2,449 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $75,000 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $65,916 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $75,000 (May 31, 2014 - $0), accrued interest of $2,449 (May 31, 2014 - $0) and debt discount of $9,084 (May 31, 2014 - $0) was recorded.

Promissory Note #35

On February 17, 2015, the Company arranged a debt swap under which a Direct Capital Group note in the amount of $50,000 in principal and $4,822 in interest was transferred to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $54,822 from Union Capital, LLC, which accrues interest at an annual rate of 8% and has a maturity date of February 17, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $1,182 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $177,731 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a gain of $104,327 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $27,810 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

During the six months endedMay 31, 2015, the Company issued 18,625,000 common shares upon the conversion of $15,567 of the principal balance and $275 of interest into common stock, and $30,799 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of May 31, 2015, principal balance of $39,255 (May 31, 2014 - $0), accrued interest of $907 (May 31, 2014- $0), debt discount of $27,012 (May 31, 2014 - $0) and a derivative liability of $42,605 (May 31, 2014 - $0) was recorded.

Promissory Note #36

On February 17, 2015, the Company entered into a Convertible Promissory note with Union Capital, LLC in the sum of $30,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on February 17, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $677 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $97,259 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a gain of $46,796 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $9,115 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal balance of $30,000 (May 31, 2014 - $0), accrued interest of $677 (May 31, 2014- $0), debt discount of $20,885 (May 31, 2014 - $0) and a derivative liability of $50,463 (May 31, 2014 - $0) was recorded.

Promissory Note #37

On March 16, 2015, the Company arranged a debt swap under which two Direct Capital Group notes in the amount of $27,000 in principal and $500 in accrued interest was transferred to GW Holdings Group, LLC. Under the terms of the note, the Company has borrowed a total of $27,500 from GW Holding Group, LLC, which accrues interest at an annual rate of 8% and has a maturity date of March 16, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $365 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $49,259 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $5,600 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $16,803 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

During the six months endedMay 31, 2015, the Company issued 14,570,458 common shares upon the conversion of $14,000 of the principal balance and $130 of interest into common stock, and $29,931 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of May 31, 2015, principal balance of $13,500 (May 31, 2014 - $0), accrued interest of $235 (May 31, 2014- $0), debt discount of $10,697 (May 31, 2014 - $0) and a derivative liability of $24,928 (May 31, 2014 - $0) was recorded.

Promissory Note #38

On March 16, 2015, the Company entered into a Convertible Promissory note with GW Holdings Group, LLC in the sum of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 16, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $416 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $44,781 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $1,381 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $5,191 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal balance of $25,000 (May 31, 2014 - $0), accrued interest of $416 (May 31, 2014- $0), debt discount of $19,809 (May 31, 2014 - $0) and a derivative liability of $46,162 (May 31, 2014 - $0) was recorded.

Promissory Note #39

On March 16, 2015, the Company arranged a debt swap under which a Syndication Capital note in the amount of $50,000 in principal and $5,129 in accrued interest was transferred to LG Capital Funding, LLC. Under the terms of the note, the Company has borrowed a total of $55,129 fromLG Capital Funding, LLC, which accrues interest at an annual rate of 8% and has a maturity date of March 16, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $819 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $98,749 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $6,937 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $21,850 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

During the six months endedMay 31, 2015, the Company issued 12,574,837 common shares upon the conversion of $13,129 of the principal balance and $118 of interest into common stock, and $28,133 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of May 31, 2015, principal balance of $42,000 (May 31, 2014 - $0), accrued interest of $701 (May 31, 2014- $0), debt discount of $33,279 (May 31, 2014 - $0) and a derivative liability of $77,553 (May 31, 2014 - $0) was recorded.

Promissory Note #40

On March 16, 2015, the Company entered into a Convertible Promissory note withLG Capital Funding, LLC in the sum of $55,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 16, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $916 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $98,518 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $3,039 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $11,421 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal balance of $55,000 (May 31, 2014 - $0), accrued interest of $916 (May 31, 2014- $0), debt discount of $43,579 (May 31, 2014 - $0) and a derivative liability of $101,557 (May 31, 2014 - $0) was recorded.

Promissory Note #41

On March 16, 2015, the Company arranged a debt swap under which two Direct Capital notes in the amount of $22,000 in principal and $4,525 in accrued interest was transferred to Service Trading Company, LLC. Under the terms of the note, the Company has borrowed a total of $26,525 fromService Trading Company, LLC, which accrues interest at an annual rate of 8% and has a maturity date of March 16, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $379 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $47,512 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $3,013 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $11,317 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

During the six months endedMay 31, 2015, the Company issued 6,208,851 common shares upon the conversion of $7,331 of the principal balance and $31 of interest into common stock, and $15,084 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of May 31, 2015, principal balance of $19,194 (May 31, 2014 - $0), accrued interest of $348 (May 31, 2014- $0), debt discount of $15,208 (May 31, 2014 - $0) and a derivative liability of $35,441 (May 31, 2014 - $0) was recorded.

Promissory Note #42

On March 16, 2015, the Company entered into a Convertible Promissory note withService Trading Company, LLC in the sum of $25,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 16, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $416 (six months endedMay 31, 2014 - $0) in interest expense.

Promissory Note #43

On March 26, 2015, the Company arranged a debt swap under which a Direct Capital note in the amount of $35,000 was transferred to Adar Bays, LLC. Under the terms of the note, the Company has borrowed a total of $35,000 fromAdar Bays, LLC, which accrues interest at an annual rate of 8% and has a maturity date of March 26, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $475 (six months endedMay 31, 2014 - $0) in interest expense.

Upon the holder’s option to convert becoming active the Company recorded a debt discount and derivative liability of $62,372 being the fair value of the conversion feature which was determined using the Black-Scholes valuation model. The debt discount is accreted to the statement of operations using the effective interest rate method over the term of the note or to the date of conversion, and the derivative liability is revalued at each reporting date to fair value. Any change in fair value is credited or charged to the statement of operations in the period.

During the six months endedMay 31, 2015, the Company recorded a loss of $1,724 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $9,180 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

During the six months endedMay 31, 2015, the Company issued 4,242,424 common shares upon the conversion of $3,500 of the principal balance into common stock, and $5,932 of the derivative liability was re-classified as additional paid in capital upon conversion.

As of May 31, 2015, principal balance of $31,500 (May 31, 2014 - $0), accrued interest of $475 (May 31, 2014- $0), debt discount of $25,820 (May 31, 2014 - $0) and a derivative liability of $58,164 (May 31, 2014 - $0) was recorded.

Promissory Note #44

On March 26, 2015, the Company entered into a Convertible Promissory note withAdar Bays, LLC in the sum of $35,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on March 26, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $506 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015, the Company recorded a loss of $2,255 (six months endedMay 31, 2014 - $0) due to the change in value of the derivative liability during the period, and a debt discount of $6,311 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal balance of $35,000 (May 31, 2014 - $0), accrued interest of $506 (May 31, 2014- $0), debt discount of $28,689 (May 31, 2014 - $0) and a derivative liability of $64,627 (May 31, 2014 - $0) was recorded.

Promissory Note #45

On April 27, 2015, the Company arranged a debt swap under which a Direct Capital note in the amount of $48,000 in principal and $3,861 in accrued interest was transferred to Union Capital, LLC. Under the terms of the note, the Company has borrowed a total of $51,861 fromUnion Capital, LLC, which accrues interest at an annual rate of 8% and has a maturity date of April 27, 2016. The note also contains customary events of default. During the six months endedMay 31, 2015, the Company accrued $386 (six months endedMay 31, 2014 - $0) in interest expense.

After 180 days from issuance, the note may be converted at the option of the holder into common stock of the Company. The conversion price is 60% of the market price, where market price is defined as “the lowest closing bid price on the OTCBB for the ten prior trading days including the day upon which a Notice of Conversion is received by the Company.”

As of May 31, 2015, principal balance of $51,861 (May 31, 2014 - $0) and accrued interest of $386 (May 31, 2014- $0) was recorded.

Promissory Note #46

On May 31, 2015 the Company entered into a Convertible Promissory Note with Rancho Capital Management in the sum of $75,000. The promissory note is unsecured, bears interest at 8% per annum, and matures on December 1, 2015. Any principal amount not paid by the maturity date bears interest at 22% per annum. The Conversion Price shall mean par .001 multiplied by the number of Common Stock converted at the time. The transaction was handled as a private sale exempt from registration under Section 4(2) of the Securities Act of 1933. During the six months endedMay 31, 2015, the Company accrued $0 (six months endedMay 31, 2014 - $0) in interest expense.

During the six months endedMay 31, 2015 interest expense relating to the beneficial conversion feature of this convertible note of $22,500 (May 31, 2014 - $0) was recorded in the financial statements with a corresponding increase to additional paid in capital, and debt discount of $0 (six months endedMay 31, 2014 - $0) was accreted to the statement of operations.

As of May 31, 2015, principal amount of $75,000 (May 31, 2014 - $0), accrued interest of $0 (May 31, 2014 - $0) and debt discount of $22,500 (May 31, 2014 - $0) was recorded.

Note 9 Derivative Liabilities

The Company issued financial instruments in the form of convertible notes with embedded conversion features. Many of the convertible notes payable have conversion rates, which are indexed to the market value of the Company’s stock price.

During the six month period ended May 31, 2015, the Company recorded derivative liabilities for embedded conversion features related to convertible notes payable of face value $783,334 (year ended November 30, 2014 - $294,767). During the six month period ended May 31, 2015,$68,946 (year ended November 30, 2014, $51,350) of convertible notes payable principal and accrued interest was converted into common stock of the Company. For the six month period ended May 31, 2015, the Company performed a final mark-to-market adjustment for the derivative liability related to the convertible notes of and the carrying amount of the derivative liability related to the conversion feature of $135,058 (year ended November 30, 2014 - $91,498) was re-classed to additional paid in capital on the date of conversion in the statement of shareholders’ deficit. During the six month period ended May 31, 2015, the Company recognized a gain of $1,577 (year ended November 30, 2014–loss of $16,704) based on the change in fair value (mark-to market adjustment) of the derivative liability associated with the embedded conversion features in the accompanying statement of operations.

These derivative liabilities have been measured in accordance with fair value measurements, as defined by GAAP ASC 815. The valuation assumptions are determined by Level 3 inputs. The following table represents the Company’s derivative liability activity for the embedded conversion features discussed above:

	May 31, 2015	November 30, 2014
	May 31, 2015	November 30, 2014
Balance, beginning of year	$ 310,270	$ 90,297
Initial recognition of derivative liability	783,334	294,767
Conversion of derivative instruments to Common Stock	(135,058)	(91,498)
Mark-to-Market adjustment to fair value	(1,577)	16,704
Balance, end of year	$ 956,969	$ 310,270

FORCE MINERALS CORP 10-Q