Note Payable

3 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Note Payable

E. NOTES PAYABLE

Notes payable consist of the following:	December 31,2011 (UNAUDITED)	June 30, 2011
Convertible notes payable (includes $120,932 and $116,899, respectively, to non-related parties), unsecured, interest at 8%, due September 2010 through November 2010. The principal and accrued interest are convertible at a conversion price of $0.30. The principal and interest is due immediately on the event of default or change of control. The holders also received warrants to purchase one share of common stock for every $2 of investment. The Company recorded a $20,981 discount on the notes payable for the value of the warrants issued. The discount was fully amortized over the term of the notes payable. There was no unamortized discount as of December 31, 2011 and June 30, 2011, respectively. The notes are now in default.	$ 673,809	$ 651,629
Convertible notes payable to related parties, unsecured, principal and interest are convertible into common stock at $0.30 to $0.33 per share, interest at 8 % to 10%, due July to November 2010. The notes are now in default.	815,827	766,914
Convertible note payable to related party, secured by the Company’s intellectual property, principal and interest are convertible into common stock at $0.25 per share subject to board of directors’ approval, interest at 8%. The note was due November 2010 and is now in default.	234,893	226,828
Note payable to related party, secured by the Company’s intellectual property, interest at 8% due August 2010 and is now is default.	456,510	441,014
Notes payable to related parties, unsecured, interest at 0% to 8%, due on demand.	122,441	118,408
Note payable, unsecured, interest at 10%, due January 2010 and is now in default.	24,170	23,162
Convertible note payable, unsecured, principal and interest are convertible into common stock at $0.30 per share subject to board of directors’ approval, interest at 8%, due January 2011 and is now in default.	11,587	11,183
Convertible note payable, unsecured, principal and interest are convertible into common stock at $1.00 per share subject to board of directors’ approval, interest at 8% due November 2009 and is now in default.	1,523	1,523
Total	$ 2,340,760	$ 2,240,661

For the purposes of Balance Sheet presentation notes payable have been grouped as follows:

	December 31,	June 30,
	2011	2011
Notes payable	$ 158,211	$ 152,767
Notes payable, related party	2,182,549	2,087,894
	$ 2,340,760	$ 2,240,661