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CONVERTIBLE NOTE PAYABLE
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6 Months Ended |
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Dec. 31, 2011
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| Notes to Financial Statements | |
| CONVERTIBLE NOTE PAYABLE |
In January of 2011, the Company signed a Convertible Note agreement. Under the agreement, the Company can borrow up to $500,000, on as needed basis. Interest on outstanding balance is due monthly, at a rate of 36% per year, with no schedule set for principal repayments. The Holder of the Note has a right to convert part, or the entire outstanding balance into shares of Company’s common stock at 30% discount to market price. Original one year term of the Note, ending on January 1, 2012, was renewed for another year. Unpaid principal and interest outstanding under the Note, is due on January 1, 2013.
On January 18, 2011, the Company received $60,000 as the first advance under the Note. The Company recorded $25,714 related to the deemed beneficial conversion feature of this advance, of which $13,416 has been amortized to interest expense in the accompanying statements of operations for the six months ended December 31, 2011. As of December 31, 2011, the balance of interest accrued under the note was $900.
On April 12, 2011, the Company received $60,000 as the second advance under the Note. The Company recorded $25,714 related to the deemed beneficial conversion feature of this advance, of which $18,150 has been amortized to interest expense in the accompanying statements of operations for the six months ended December 31, 2011. As of December 31, 2011, the balance of interest accrued under the note was $900.
On November 1, 2011, the Company received $100,000 as the third advance under the Note. The Company recorded $42,857 related to the deemed beneficial conversion feature of this advance, of which $8,571 has been amortized to interest expense in the accompanying statements of operations for the six months ended December 31, 2011. As of December 31, 2011, the balance of interest accrued under the note was $3,000. |