CONVERTIBLE NOTE PAYABLE	19 Months Ended
Dec. 31, 2011
CONVERTIBLE NOTE PAYABLE	6. CONVERTIBLE NOTE PAYABLE On April 1, 2010, the lenders on the Company’s outstanding related party demand notes instructed the Company to repay those notes along with accrued interest at the earliest possible date. The Company was unable to obtain replacement financing to repay those notes. As a result, the Company and the lenders agreed to refinance the debt as described below. On May 23, 2010, the Company entered into a 10% Subordinated Convertible Note payable with Infox Ltd. (a related party) in the amount of $297,567 in repayment of demand notes in the amount of $275,091 and accrued interest of $22,476. The note bears interest at 10% per annum, matures on March 31, 2013 and is convertible into shares of common stock at $0.01 per share. The note requires quarterly payments of interest or, upon agreement of both parties, the interest may be capitalized to principal each quarter. There have been no payments of interest on the note. All interest accrued during the year ended December 31, 2011 was capitalized to principal. On May 23, 2010, the Company entered into a 10% Subordinated Convertible Note payable with Zaccam Trading Ltd. (a related party) in the amount of $109,441 in repayment of demand notes in the same amount. The note bears interest at 10% per annum, matures on March 31, 2013 and is convertible into shares of common stock at $0.01 per share. The note requires quarterly payments of interest or, upon agreement of both parties, the interest may be capitalized to principal each quarter. There have been no payments of interest on the note. All interest accrued during the year ended December 31, 2011 was capitalized to principal. On June 2, 2010, the Company entered into a 10% Subordinated Convertible Note payable with Zaccam Trading Ltd. (a related party) in the amount of $13,709 in repayment of demand notes in the same amount. The note bears interest at 10% per annum, matures on March 31, 2013 and is convertible into shares of common stock at $0.01 per share. The note requires quarterly payments of interest or, upon agreement of both parties, the interest may be capitalized to principal each quarter. There have been no payments of interest on the note. All interest accrued during the year ended December 31, 2011 was capitalized to principal. The Company evaluated the application of ASC 470-50-40/55, Debtor’s Accounting for a Modification or Exchange of Debt Instrument as it applies to the three notes listed above and concluded that the revised terms constituted a debt modification rather than a debt extinguishment because the present value of the cash flows under the terms of each of the new instruments was less than 10% from the present value of the remaining cash flows under the terms of the original notes. No gain or loss on the modifications was required to be recognized. The Company evaluated the terms of the three notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be greater than the market value of underlying common stock at the inception of the note. Therefore, no beneficial conversion feature was recognized. On June 4, 2010, Infox Ltd. and Zaccam Trading Ltd. each assigned their outstanding 10% Subordinated Convertible Notes to two unrelated third parties. No other terms of the notes were modified. On July 20, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox Ltd. elected to convert principal in the amount of $30,000 into 50 shares of common stock. On November 23, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox Ltd. elected to convert principal in the amount of $150,000 into 50,000 shares of common stock. On December 6, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox Ltd. elected to convert principal in the amount of $40,000 into 13,334 shares of common stock. On December 6, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $10,000 into 3,333 shares of common stock. On February 18, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $20,000 into 6,667 shares of common stock in accordance with the terms of the note. On February 18, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox, Ltd. elected to convert principal in the amount of $30,000 into 10,000 shares of common stock in accordance with the terms of the note. On June 29, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $45,000 into 15,000 shares of common stock in accordance with the terms of the note. On June 29, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox, Ltd. elected to convert principal in the amount of $45,000 into 15,000 shares of common stock in accordance with the terms of the note. On September 12, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $50,000 into 16,666 shares of common stock in accordance with the terms of the note. On September 12, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox, Ltd. elected to convert principal in the amount of $20,000 into 6,667 shares of common stock in accordance with the terms of the note. On October 7, 2011, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $661,683 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on December 31, 2012. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.03 per share. Additionally, on October 7, 2011, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $517,673 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on June 30, 2013. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.03 per share. The Company evaluated the application of ASC 470-50-40/55, Debtor’s Accounting for a Modification or Exchange of Debt Instrument as it applies to the two notes listed above and concluded that the revised terms constituted a debt modification rather than a debt extinguishment because the present value of the cash flow under the terms of each of the new instruments was less than 10% from the present value of the remaining cash flows under the terms of the original notes. No gain or loss on the modifications was required to be recognized. The Company evaluated the terms of these notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion features and account for them as a separate derivative liabilities. The Company evaluated the conversion features for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized beneficial conversion features in the amounts of $661,683 and $517,673 on October 7, 2011. The beneficial conversion features were recorded as an increase in additional paid-in capital and a discount to the Convertible Notes Payable. The discounts to the Convertible Notes Payable will be amortized to interest expense over the life of the respective notes.

6. CONVERTIBLE NOTE PAYABLE

On April 1, 2010, the lenders on the Company’s outstanding related party demand notes instructed the Company to repay those notes along with accrued interest at the earliest possible date. The Company was unable to obtain replacement financing to repay those notes. As a result, the Company and the lenders agreed to refinance the debt as described below.

On May 23, 2010, the Company entered into a 10% Subordinated Convertible Note payable with Infox Ltd. (a related party) in the amount of $297,567 in repayment of demand notes in the amount of $275,091 and accrued interest of $22,476. The note bears interest at 10% per annum, matures on March 31, 2013 and is convertible into shares of common stock at $0.01 per share. The note requires quarterly payments of interest or, upon agreement of both parties, the interest may be capitalized to principal each quarter. There have been no payments of interest on the note. All interest accrued during the year ended December 31, 2011 was capitalized to principal.

On May 23, 2010, the Company entered into a 10% Subordinated Convertible Note payable with Zaccam Trading Ltd. (a related party) in the amount of $109,441 in repayment of demand notes in the same amount. The note bears interest at 10% per annum, matures on March 31, 2013 and is convertible into shares of common stock at $0.01 per share. The note requires quarterly payments of interest or, upon agreement of both parties, the interest may be capitalized to principal each quarter. There have been no payments of interest on the note. All interest accrued during the year ended December 31, 2011 was capitalized to principal.

On June 2, 2010, the Company entered into a 10% Subordinated Convertible Note payable with Zaccam Trading Ltd. (a related party) in the amount of $13,709 in repayment of demand notes in the same amount. The note bears interest at 10% per annum, matures on March 31, 2013 and is convertible into shares of common stock at $0.01 per share. The note requires quarterly payments of interest or, upon agreement of both parties, the interest may be capitalized to principal each quarter. There have been no payments of interest on the note. All interest accrued during the year ended December 31, 2011 was capitalized to principal.

The Company evaluated the application of ASC 470-50-40/55, Debtor’s Accounting for a Modification or Exchange of Debt Instrument as it applies to the three notes listed above and concluded that the revised terms constituted a debt modification rather than a debt extinguishment because the present value of the cash flows under the terms of each of the new instruments was less than 10% from the present value of the remaining cash flows under the terms of the original notes. No gain or loss on the modifications was required to be recognized.

The Company evaluated the terms of the three notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion feature did not meet the definition of a liability and therefore did not bifurcate the conversion feature and account for it as a separate derivative liability. The Company evaluated the conversion feature for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be greater than the market value of underlying common stock at the inception of the note. Therefore, no beneficial conversion feature was recognized.

On June 4, 2010, Infox Ltd. and Zaccam Trading Ltd. each assigned their outstanding 10% Subordinated Convertible Notes to two unrelated third parties. No other terms of the notes were modified.

On July 20, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox Ltd. elected to convert principal in the amount of $30,000 into 50 shares of common stock.

On November 23, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox Ltd. elected to convert principal in the amount of $150,000 into 50,000 shares of common stock.

On December 6, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox Ltd. elected to convert principal in the amount of $40,000 into 13,334 shares of common stock.

On December 6, 2010, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $10,000 into 3,333 shares of common stock.

On February 18, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $20,000 into 6,667 shares of common stock in accordance with the terms of the note.

On February 18, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox, Ltd. elected to convert principal in the amount of $30,000 into 10,000 shares of common stock in accordance with the terms of the note.

On June 29, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $45,000 into 15,000 shares of common stock in accordance with the terms of the note.

On June 29, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox, Ltd. elected to convert principal in the amount of $45,000 into 15,000 shares of common stock in accordance with the terms of the note.

On September 12, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Zaccam Trading Ltd. elected to convert principal in the amount of $50,000 into 16,666 shares of common stock in accordance with the terms of the note.

On September 12, 2011, holders of the 10% Subordinated Convertible Note Payable originally issued to Infox, Ltd. elected to convert principal in the amount of $20,000 into 6,667 shares of common stock in accordance with the terms of the note.

On October 7, 2011, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $661,683 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on December 31, 2012. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.03 per share.

Additionally, on October 7, 2011, the Company signed a Convertible Promissory Note which refinanced non-interest bearing advances in the amount of $517,673 into a convertible note payable. The Convertible Promissory Note bears interest at 10% per annum and is payable along with accrued interest on June 30, 2013. The Convertible Promissory Note is convertible into common stock at the option of the holder at the rate of $0.03 per share.

The Company evaluated the application of ASC 470-50-40/55, Debtor’s Accounting for a Modification or Exchange of Debt Instrument as it applies to the two notes listed above and concluded that the revised terms constituted a debt modification rather than a debt extinguishment because the present value of the cash flow under the terms of each of the new instruments was less than 10% from the present value of the remaining cash flows under the terms of the original notes. No gain or loss on the modifications was required to be recognized.

The Company evaluated the terms of these notes in accordance with ASC Topic No. 815 – 40, Derivatives and Hedging - Contracts in Entity’s Own Stock and determined that the underlying common stock is indexed to the Company’s common stock. The Company determined that the conversion features did not meet the definition of a liability and therefore did not bifurcate the conversion features and account for them as a separate derivative liabilities. The Company evaluated the conversion features for a beneficial conversion feature. The effective conversion price was compared to the market price on the date of the notes and was deemed to be less than the market value of underlying common stock at the inception of the note. Therefore, the Company recognized beneficial conversion features in the amounts of $661,683 and $517,673 on October 7, 2011. The beneficial conversion features were recorded as an increase in additional paid-in capital and a discount to the Convertible Notes Payable. The discounts to the Convertible Notes Payable will be amortized to interest expense over the life of the respective notes.