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9. Convertible Notes Payable
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3 Months Ended |
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Sep. 30, 2012
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| Debt Disclosure [Abstract] | |
| 9. Convertible Notes 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 Companys common stock at 30% discount to market price. Unpaid principal and interest outstanding under the Note, is due on January 1, 2013 (extended term), unless the agreement is further extended, with consent of both parties.
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 $6,708 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2011.
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 $9,075 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2011.
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 $14,243 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012.
On March 27, 2012, the Company received $20,000 as the fourth advance under the Note. The Company recorded $3,148 related to the deemed beneficial conversion feature of this advance, of which $1,049 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012.
On May 4, 2012, the Company received $20,000 as the fifth advance under the Note. The Company recorded $1,584 related to the deemed beneficial conversion feature of this advance, of which $594 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012.
On August 22, 2012, the Company received $46,000 as the sixth advance under the Note. The Company recorded $36,853 related to the deemed beneficial conversion feature of this advance, of which $12,213 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012.
During April and May of 2012, $60,000 outstanding under the Note was converted into 9,076,480 shares of common stock of the company, representing $30,348 of principal and $29,652 of interest.
During August and September of 2012, $161,922 outstanding under the Note was converted into 136,509,392 shares of common stock of the company, representing $131,607 of principal and $30,315 of interest.
As of September 30 and June 30, 2012, combined principal balances outstanding under the Note were $114,862 and $209,223, respectively; net of unamortized beneficial conversion features of $29,183 and $20,429, respectively. Balances of interest accrued under the Note as of September 30 and June 30, 2012, were $2,013 and $14,501, respectively.
On April 8, 2012, the Company issued a convertible promissory note in the amount of $25,000, bearing interest at a rate of 20% per annum. The note is unsecured and matures on December 1, 2012. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 30% discount to the market price, at the point of conversion. The Company recorded $24,770 related to the deemed beneficial conversion feature of this note, of which $9,289 has been amortized to interest expense in the accompanying statements of operations for the three months ended September 30, 2012. As of September 30 and June 30, 2012, the principal balance remained unchanged, and accrued interest balances were $2,437 and $1,109, respectively.
On May 25, 2012, the Company issued a convertible promissory note in the amount of $40,000, bearing interest at a rate of 8% per annum. The note is unsecured and matures on February 21, 2013. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 45% discount to the market price, at the point of conversion. The Company determined that the conversion feature of the Note should be accounted for as a convertible note derivative liability, and recorded at its fair value of $32,727. As of September 30 and June 30, 2012, balances of the debt discount were $18,182 and $29,091, respectively. For the three months ended September 30, 2012, amortization of the debt discount was $10,909, reflected on the accompanying statements of operations as interest expense.
On July 13, 2012, the Company issued a convertible promissory note in the amount of $32,500, bearing interest at a rate of 8% per annum. The note is unsecured and matures on March 29, 2013. The entire principal and accrued interest on the note are convertible into common stock of the Company at a variable conversion price, with 45% discount to the market price, at the point of conversion. The Company determined that the conversion feature of the Note should be accounted for as a convertible note derivative liability, and recorded at its fair value of $26,591. As of September 30, 2012, balance of the debt discount was $17,791. For the three months ended September 30, 2012, amortization of the debt discount was $8,800, reflected on the accompanying statements of operations as interest expense. |