NOTE 6 -

NOTES PAYABLE - STOCKHOLDERS

In the year ended September 30, 2011, the Company issued two promissory notes totaling $140,000 to two individual stockholders of the Company. The first note in the amount of $50,000, bears interest at 15%, payable quarterly, and matures on December 31, 2011.  The second note, in the amount of $90,000, bears interest at 10%, payable quarterly, and matures on December 31, 2012.

In the year ended September 30, 2010, the Company issued three promissory notes totaling $40,000 to three individual stockholders of the Company. Two of the notes, which total $15,000, bear interest at 15% which is payable quarterly and mature in December 2010. The maturity was extended to December 2011. One of the notes, in the amount of $25,000, bears interest at 10%, payable quarterly, and matures on December 31, 2012. In January 2010, one shareholder converted a promissory note in the amount of $32,063 plus accrued interest in the amount of $1,037 into 1,818,832 shares of the Company's restricted common stock.

In connection with two of the notes payable to stockholders, the Company issued 750,000 restricted shares of common stock. The common stock was valued at $3,750 based on the fair value of the stock at the time of issuance. The discount is being recognized over the life of the notes payable, which mature in December 2010. The Company recognized $937 and $2,813 of the discount as interest expense for the years ended September 30, 2011 and 2010, respectively.

In the year ended September 30, 2009, the Company issued four promissory notes totaling $112,459 to four individual stockholders of the Company. Three of the notes, which total $86,959, bear interest at 15% which is payable quarterly. These notes mature in August 2010. The fourth note for $25,500 bears interest of 14% payable monthly and matures in December 2009. The maturity of all of these notes was extended to December 31, 2011.

In connection with three of the notes payable to stockholders issued during the year ended September 30, 2009, the Company issued 4,097,975 restricted shares of common stock. The common stock was valued at $35,128 based on the fair value of the stock at the time of issuance. The discount is being recognized over the life of the notes payable, which mature in August 2010. The Company recognized $32,201 and $2,927 of the discount as interest expense for the years ended September 30, 2010 and 2009, respectively.

In connection with the one of the notes payable for $25,500 the Company made principal payments of $2,681 and $1,279 for the year ended September 30, 2011 and 2010, respectively. The Company issued a new note in 2011 in the principal amount of $21,540 bearing interest at 14% and maturing on December 31, 2011.

Interest expense on notes payable - stockholders was $22,752 in 2011 and $58,207 in 2010.