CONVERTIBLE PROMISSORY NOTES	6 Months Ended
CONVERTIBLE PROMISSORY NOTES	Jun. 30, 2011
CONVERTIBLE PROMISSORY NOTES [Abstract]
CONVERTIBLE PROMISSORY NOTES	NOTE 2 - CONVERTIBLE PROMISSORY NOTES Convertible Promissory Notes ---------------------------- During 2010, the Company entered into convertible promissory note agreements with 4 individuals and one third party company for an aggregate amount of $108,182. These convertible note are unsecured, bear interest at 9.0% per annum and are payable on demand. The Holders shall have the right, exercisable at any time from and after the date of issuance of these convertible promissory notes until the respective note is fully paid, to convert the entire outstanding and unpaid principal of these notes, in whole or in part, upon delivery of a notice of conversion into the Company's common stock at the conversion price which shall be the average of the lowest three trading prices for the Company's common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Company's common stock. These arrangements represent a fixed monetary conversion value of $108,182 based on the variable share quantity to be issued. Convertible Promissory Note and Related Consulting Agreement ------------------------------------------------------------ On January 1, 2010, the Company entered into a 24-month consulting agreement (the "Consulting Agreement") with a Company (the "Consultant") for business development services. In connection with the consulting agreement, the Company agreed to pay the Consultant an aggregate of $80,000 which payment is evidenced by a convertible promissory note (the "Convertible Note") in the amount of $80,000. The Consulting Agreement terminated on December 31, 2011. The convertible promissory note is unsecured and was due on the earlier of a) the date the Company raises $80,000 in a private placement of its common stock or entry into alternative loan agreements or b) January 1, 2012. This Convertible Note shall not accrue any interest during the term of this Note, and until 5 business days have passed after the Maturity Date stated above. In the event that this Convertible Note is not paid in full by the end of the fifth day following the Maturity Date, the Convertible Note shall bear interest at the rate of 15% per annum, which interest shall begin accruing after such fifth day following the Maturity Date, until this Note is paid in full. Interest will be computed on the basis of a 360-day year. The Convertible Note (and any accrued and unpaid interest) shall be convertible into shares of the Company's common stock from time to time, at the sole option of the Payee until such Note is paid in full, upon 5 days written notice from the Payee to the Company of the Payee's desire to convert the Convertible Note into shares of common stock at the rate of one share of the Company's common stock for each $0.001 owed to Payee pursuant to the Convertible Note. In connection with this Consulting Agreement, the Company recorded a prepaid expense of $80,000 which was amortized over the contract term. Accordingly, for the six months ended June 30, 2011 and 2010, the Company recorded professional fees of $20,000 and $20,000, respectively. As of the date of this report this loan was in default. Pursuant to ASC 470-20 and related topics, the Company evaluated whether a beneficial conversion feature exists by comparing the conversion price of the Convertible Note with the fair value of the common stock at the commitment date. In connection with the Convertible Note, the Company recorded a beneficial conversion since the conversion price was less than the fair market value of the common stock. The total beneficial conversion feature included in the $80,000 Convertible Note payable resulted in an initial debt discount of $80,000 to be amortized over the term of the notes with a credit to additional paid-in capital. For the six months ended June 30, 2011 and 2010, the Company recorded interest expense for the amortization of the debt discount of $20,000 and $20,000, respectively. On April 15, 2010, the Company entered into a convertible promissory note agreement with the above Consultant for $7,310. This convertible note is unsecured, bears interest at 9.0% per annum and is payable on demand. The Holder shall has the right, exercisable at any time from and after the date of issuance of this convertible promissory note until the note is fully paid, to convert the entire outstanding and unpaid principal of this note, in whole or in part, upon delivery of a notice of conversion into the Company's common stock at the conversion price which shall be the average of the lowest three (3) trading prices for the Company's common stock during the 20 trading day period ending one trading day prior to the conversion date, subject to adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating to the Company's common stock. This arrangement represents a fixed monetary conversion value of $7,310 based on the variable share quantity to be issued. At June 30, 2011 and December 31, 2010, convertible promissory notes consisted of the following: June 30, December 31, ------------------------ 2011 2010 ------------ ---------- Convertible notes $ 195,492 $ 195,492 Less: unamortized discount on (20,000) (40,000) convertible note ------------ ---------- Convertible notes $ 175,492 $ 155,492 ============ ==========

WHITEMARK HOMES INC 10-Q