On November 6, 2012, the Company borrowed $42,500 from an unrelated third party entity in the form of a convertible note, $33,000 of which was received in cash and $9,500 of which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on August 8, 2013.

The principal balance of the note along with accrued interest is convertible at any time, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $42,500 on the note date. As of March 31, 2013 the Company had amortized $22,409 of the debt discount to interest expense, leaving $20,091 in unamortized debt discount at March 31, 2013.

The fair value of the conversion option of the convertible note of $67,374 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

On November 6, 2012, the Company borrowed $42,500 from an unrelated third party entity in the form of a convertible note, $33,000 of which was received in cash and $9,500 of which was for professional fees. The note bears interest at 8 percent per annum with principal and interest due in full on August 8, 2013.

The principal balance of the note along with accrued interest is convertible at any time, at the option of the note holder, into the Company's common stock at a price of 55 percent of the current market price. The current market price is defined as the average of the lowest three trading prices for the Common Stock during the ten day period on the latest complete trading day prior to the conversion date.

Pursuant to this conversion feature, the Company recognized a discount on convertible debt in the amount of $42,500 on the note date. As of March 31, 2013 the Company had amortized $22,409 of the debt discount to interest expense, leaving $20,091 in unamortized debt discount at March 31, 2013.

The fair value of the conversion option of the convertible note of $67,374 has been recognized as a derivative liability on the date of issuance with all future changes in the fair value of these conversion options being recognized in earnings in the Company’s statement of operations under the caption “Other income (expense) – Gain (loss) on derivative liability” until such time as the note is converted or the conversion feature expires.

Dietary Supplements
FDA regulates both finished dietary supplement products and dietary ingredients. FDA regulates dietary supplements under a different set of regulations than those covering "conventional" foods and drug products. Under the Dietary Supplement Health and Education Act of 1994 (DSHEA):
The manufacturer of a dietary supplement or dietary ingredient is responsible for ensuring that the product is safe before it is marketed.
FDA is responsible for taking action against any unsafe dietary supplement product after it reaches the market.

III. Discussion
A. Beverages Are Conventional Foods That May Not Be Marketed as Dietary Supplements

Under section 201(ff)(2)(B) of the FFDCA (21 U.S.C. 321(ff)(2)(B)), the term “dietary supplement” means a product that, among other requirements, “is not represented for use as a conventional food or as a sole item of a meal or the diet.” Beverages are conventional foods under the FFDCA. Even when the label of a liquid product characterizes it as a dietary supplement, the product may not in fact be a dietary supplement. Liquid products can be represented as conventional foods as a result of factors such as their packaging, the volume in which they are intended to be consumed, their product or brand name, and statements about the product in labeling or advertising. For example, the packaging of liquid products in bottles or cans similar to those in which single or multiple servings of beverages like soda, bottled water, fruit juices, and iced tea are sold, suggests that the liquid product is intended for use as a conventional food.

Based on data from the 2005-2006 National Health and Nutrition Examination Survey on daily intake of drinking water and other beverages in the United States, FDA estimates the average total daily drinking fluid intake[1] per person to be about 1.2 liters (1200 ml) (Ref. 1). Liquid products that suggest through their serving size, packaging, or recommended daily intake that they are intended to be consumed in amounts that provide all or a significant part of the entire daily drinking fluid intake of an average person in the U.S., are represented as beverages. In addition, the name of a product can represent the product as a conventional food. Product or brand names that use conventional food terms such as “beverage,” “drink,” “water,” ‘juice,” or similar terms represent the product as a conventional food.

In sum, FDA considers a liquid product’s name, packaging, serving size, and recommended conditions of use, as well as other representations about the product, to be important determinants of whether the product is represented as a conventional food and may not be marketed as a dietary supplement.