Notes Payable (Tables)

6 Months Ended

Dec. 31, 2012

Debt Disclosure [Abstract]

Notes payable

Notes payable consists of the following as of:

	December 31, 2012		June 30, 2012
Convertible notes payable (includes $128,953 and $124,921, respectively, to non-related parties), unsecured, interest at 8%, due September 2010 through November 2010. The principal and accrued interest is 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 notes are currently in default.	$	717,996	$	695,815

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 on demand to November 2010. The notes are currently in default.		1,071,235			871,951
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.		250,937			242,871
Note payable to related party, secured by the Company’s intellectual property, interest at 8% due August 2010 and is now in default.		487,334			471,838
Notes payable to related parties, unsecured, interest at 0% to 8%, due on demand.		130,463			126,430
Note payable, unsecured, interest at 10%. The note was due in January 2010 and is now in default.		26,175			25,167
Notes payable, secured by the Company's certificate of deposit with a financial institution and classified on the balance sheet as restricted cash, interest at 5%, convertible into common stock at $0.08 per share, due on demand		30,029			29,293
Convertible note payable, unsecured, principal and interest are convertible into common stock at $0.30 to $0.40 per share subject to board of directors’ approval, interest at 5% to 8%, due January 2011 to March 2013 and is now in default.		22,766			22,110
Notes payable, unsecured, interest at 5%, due January 2013. (1)		449,051			444,374
Note payable, secured by the Company's intellectual property, interest at variable rates starting September 1, 2012, due December 2012 and is now in default.		262,799			257,957
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%. The note was due November 2009 and is now in default.		1,523			1,523
Total		3,450,308			3,189,329
Less valuation discount on notes payable		(4,776	)		(69,742	)
Grand total	$	3,445,532		$	3,119,587

(1) In connection with the issuance of the notes payable, two stockholders of the Company granted the lender the option to acquire 1,600,000 unrestricted shares of the Company’s common stock from the stockholder’s at a price of $0.40 per share. The agreement to provide the lender with the option to purchase shares of the two shareholders was presumed to be a separate arrangement between the Company and the lender. As such, the Company valued the shares as if they had provided the lender an option to acquire these shares. The aggregate value of the 1,600,000 shares was valued at $129,931 using Black-Scholes option valuation model with the following assumptions: expected life, 1 year, risk free interest rate, 0.10%, volatility, 250%, and dividend rate, 0%. The value of the option is being considered as a valuation discount and was amortized over the one year life of the Note. For the six months ended December 31, 2012, the Company recognized $64,966 of expense related to the amortization of this discount and is included in the interest expense in the consolidated statement of operations.

Notes payable as presented on Balance Sheet

	December 31, 2012		June 30, 2012
Notes payable	$	916,521	$	835,602
Notes payable, related party		2,529,011		2,283,985
	$	3,445,532	$	3,119,587