NOTE 7– NOTES PAYABLE

On March 5, 2012, the Company issued an aggregate of four unsecured promissory notes payable for $11,325 each (aggregate of $45,300 due June 5, 2012 with a stated interest rate of 20% per annum, with fixed interest of $2,265 due upon maturity.   In connection with the issuance of the above described promissory notes, the Company issued 100,000 of its common stock per note (total of 400,000). 

The Company recorded a debt discount of $3,000 per note based on the fair value of the Company's common stock at the issuance date of the promissory notes.  The discount is amortized ratably over the  term on the notes. As of September 30, 2012, all four promissory notes were paid in full.

On April 3, 2012, the Company issued a unsecured promissory note payable for $150,000 due April 3, 2013 with a stated interest rate of 20% per annum, with fixed interest of $30,000 due upon maturity.   In connection with the issuance of the above described promissory note, the Company issued 1,000,000 of its common stock.  During the three months ended September 30, 2012, the Company repaid $50,000 of the unsecured promissory note.

The Company recorded a debt discount of $25,100 based on the fair value of the Company's common stock at the issuance date of the promissory note.  The discount is amortized ratably over the  term on the notes.