Related Party Disclosures

6 Months Ended

Dec. 31, 2012

Related Party Disclosures:

Related Party Transactions Disclosure

NOTE 3 - RELATED PARTY TRANSACTIONS

Accounts payable to related parties

As of June 30, 2012, the Company had outstanding accounts payable to related parties of $44,781 due to Mr. Learned Hand, which represented expenses paid by him on behalf of the Company.  Mr. Learned Hand did not have any relationship with the Company as of June 30, 2012; however in September 2012, he was elected as the Company’s director, and Chief Executive and Financial Officer following the resignation of predecessor director and Chief Executive Officer, Mr. Igor Produn.  During the period ended December 31, 2012, Mr. Hand was repaid $40,000 of this amount, and advanced an additional $13,685 during the six months ended December 31, 2012 for Company expenses, resulting in a balance due him of $18,466 as of December 31, 2012.

In addition, a warrant holder exercised her warrants for the purchase of 8,000,000 shares at the total exercise price of $56,000; however, this warrant holder paid $60,000 to the Company and the balance of $4,000 is being treated as a related party payable as of December 31, 2012. The Company intends to repay these $4,000 presently.

As of December 31, 2012, the aggregate balance of Accounts payable to related parties was $22,466.  These advances to related parties are unsecured, due on demand, and are non-interest bearing.

Notes payable to related party

During the year ended June 30, 2012, the Company issued an unsecured promissory note to an entity owned by a shareholder and former director of the Company for the an aggregate principal sum of $9,666.  The unpaid principal sum, together with all other amounts advanced to the Company by the lender from time to time, shall bear interest at 4% per annum until paid, and shall be due and payable on demand.  During the six months ended December 31, 2012, the lender advanced an additional $700 to the Company under the same terms.  As of December 31, 2012, notes payable to this related party had a balance of $10,366.

Notes payable to related party issued upon change of control

In September 2012, the Company issued an unsecured promissory note to an entity controlled by the Company’s Chief Executive and Financial Officer and director, for the principal sum of $140,000. The promissory note was issued in connection with the assignment of two patents and the related intellectual property (see Note 5).  The unpaid principal sum of the the promissory note bears interest at 4% per annum until paid.  The unpaid principal sum and all accrued but unpaid interest thereon shall be due and payable five years from the date of the promissory note.  As of December 31, 2012, the promissory note of $140,000 remained outstanding and was classified as non-current liability on the Company's condensed consolidated balance sheet at December 31, 2012.