RELATED PARTY ADVANCES AND LOANS PAYABLE

3 Months Ended

Sep. 30, 2011

RELATED PARTY ADVANCES AND LOANS PAYABLE

NOTE 5 RELATED PARTY ADVANCES AND LOANS PAYABLE

As of September 30, 2011 and June 30, 2011, $219,627 of trade payables were due to a Series A Convertible Preferred shareholder, ASA Commerce.

On November 23, 2009, the Board of Directors resolved to permit $250,000 of debt due to the President to be converted into shares of common stock of the Company at $0.45 per share. The Board of Directors further resolved that the remaining debt outstanding at November 23, 2009 of $1,436,415 due to the President may be converted into shares of common stock of the Company at $0.45 per share upon the Company’s common stock reaching a price of $1.50 per share.  At September 30, 2011, $1,987,806 (which was at June 30, 2011, $1,942,806) was owed by the Company to the President.

At September 30, 2011, $58,500 (which was at June 30, 2011, $39,000) was due to the Chief Financial Officer in accrued compensation owing.

Amounts due to the President and Chief Financial Officer are payable on demand, non-interest bearing and unsecured.  In absence of an earlier demand, amounts due are payable on June 30, 2016.

The Company entered into an unsecured promissory note of $825,000 with a stockholder on May 27, 2008 with a stated interest rate of 10% and a repayment date of November 1, 2008. On October 12, 2010, the Company repaid the remaining outstanding principal balance of $150,000.  On January 20, 2011, all outstanding interest payable totaling $141,953 related to the promissory note was fully paid.