Note 7 - Notes payable
On March 3, 2011, the Company obtained a $50,000 loan from an unrelated party. The loan is evidenced by a note payable dated March 3, 2011, bearing interest at 5% per annum. The note payable plus accrued interest is due on March 3, 2012. The funds were used to repay all outstanding shareholder loans and accounts payable and to provide working capital through November 30, 2011. During the quarter ended November 30, 2011, the Company accrued $623 in interest payable under the note.
The Company shall have the right to prepay without penalty all or any part of the unpaid balance of this Promissory Note (the \'\'Note\'\') at any time. The Company shall not be entitled to re-borrow any prepaid amounts of the principal or other costs or charges. The entire unpaid principal amount of this Note will become immediately due and payable at the option of Holder upon any of the following (the "Acceleration Date"): (i) the Company ceases to carry on business on a regular basis or enters into an agreement to sell substantially all of its assets or an agreement whereby it merges into, consolidates with or is acquired by any other business entity; or (ii) the Company makes any assignment for the benefit of its creditors, makes any election to wind up or dissolve or becomes unable to pay its debts as they mature, insolvent or the subject of any proceeding under any bankruptcy, insolvency or debtor\'s relief law.