||CONVERTIBLE NOTE PAYABLE|
has a loan with an individual in the original amount of $140,000, with interest payable monthly at 15% and which was extended
to January 1, 2010 and revised to be convertible into common stock at a conversion price to be reasonably agreed upon by the parties.
On March 10, 2011, the Company issued 3,900,000 shares of its common stock to the note holder and the due date of the note with
a balance of $80,000 was extended nine months, to December 10, 2011. The Company issued 21,000,000 shares of the Companys
common stock to a group of individuals who agreed to repay the balance of the $80,000 loan. The exchange of the shares is being
accounted for as a stock subscription until the note is repaid. As of November 30, 2011 and August 31, 2012, $14,400 has been
paid on the loan, leaving a balance of $65,600, which became past due at December 10, 2011.