NOTE 6 PAYABLE TO SHAREHOLDER
From October 1, 2009 through September 30, 2012, the Company received $61,318 in advances from certain officers of the Company under convertible promissory notes. The nature of the advances consists of the officers covering the cost of required corporate expenses. The notes bear no interest and are convertible into shares of the Companys common stock at a rate of $0.001 per share. Management evaluated the convertible notes and determined that there is no embedded derivative of the conversion feature of the note. Management evaluated the convertible notes payable and determined that there was no intrinsic value of the conversion option due to the fact that the debt is not convertible at a discount to the market value of the stock. Although the notes bear no interest, the Company imputed interest at a rate of 8% and recognized $5,421 and$3,372 in interest expense for the periods September 30, 2012 and September 30, 2011, respective ly, with an increase to additional paid in capital for the same amount. These interest amounts include the imputed interest on the convertible notes described below.