Convertible notes

6 Months Ended

Jun. 30, 2012

Convertible notes [Abstract]

Convertible notes

NOTE 7: Convertible notes

During the six months ended June 30, 2012, we issued to two individuals convertible debenture notes in the total amount of $102,500. As of June 30, 2012, four (4) notes issued in fiscal year 2011 have matured; both the investors and the Company are working towards conversion of these notes. The notes are convertible into the Company's common stock at a various values. The Company has converted two out of the four notes mentioned (see Note 10: Stockholder's deficit). The Company is not aware of any default with its convertible notes. The Company wrote off $2,712 in interest as of June 30, 2012. The following table represents the Beneficial Conversion Feature ("BCF") on the various notes:

Description	Note Value		BCF Value		Amortized BCF value		Interest accrued as of JUNE 30, 2012
Convertible note issued on April 15, 2011, at a 20% interest rate for six months, convertible to shares of stock at fixed rate of $0.02 per share	$	124,000	$	124,000	$	124,000	$	59,900
Convertible note issued on April 29, 2011, at a 6% interest rate for one year, convertible to shares of stock at a variable rate upon date of conversion		10,000		10,000		10,000		947
Convertible note issued on January 4, 2012, at a 8% interest rate for nine months, convertible to shares of stock at a variable rate upon date of conversion		15,000		15,000		9,402		569
Convertible note issued on March 14, 2012, at a 10% interest rate for six months, convertible to shares of stock at a fixed rate of $0.004 per share		40,000		10,000		5,870		587
Convertible note issued on June 3, 2012, at a 8% interest rate for nine months, convertible to shares of stock at a variable rate upon date of conversion		47,500		41,321		7,785		541
Total	$	236,500	$	200,321	$	157,057	$	62,544

As of June 30, 2012, the Company has converted a portion of the convertible noted date April 29, 2011. We have converted $5,000 of the note for shares of the Company's restricted stock held per the agreement. We have issued stock in the amount of 8,333,333 shares towards the total note value of $15,000, and as of June 30, 2012, the note holds a value of $10,000 plus accrued interest.

On June 3, 2012, the Company entered into a convertible note agreement in the amount of $47,500, with an interest rate of 8% for a nine month period.

On January 4, 2012, the Company entered into a convertible note agreement in the amount of $15,000, with an interest rate of 8% for a nine month period. The funds from the note were sent directly to the Company's counsel to initiate the submission of our DEF 14A in order to increase our authorized shares of common stock (see Note 10: Stockholder's deficit).

For the year ended December 31, 2011, due to the insufficient authorized but unissued shares of common stock to meet the required amount of shares for convertible instruments, the Company has accounted for the excess in common stock equivalents as a derivative liability in accordance with FASB ASC 815 Derivatives and Hedging. Accordingly, the derivative was marketed to market through earnings at the end of each reporting period. As a result, as of December 31, 2011, the Company recorded an expense of $113,026. As of June 30, 2012, the Company reversed the derivative due to the increase in common stock shares there by relieving the need of derivative liability expense.