Item 1.01 Entry into a Material Definitive Agreement.

On August 19, 2008, Gottbetter Capital Master Ltd. ("Gottbetter") converted $25,000 of outstanding principal on one of two convertible promissory notes issued by the Company in August and September of 2006 (the "Notes") into 52,532 shares of Company common stock. Conversion of the note occurred pursuant to an arrangement under which, in addition to the terms contained in the Notes, Gottbetter may convert, in any thirty (30) day period, an aggregate of up to $250,000 in principal and interest on the Notes into Company common stock at a value per share equal to the volume-weighted average price ("VWAP") for the Company's common stock on the date of conversion minus $0.02, with such value not to be below $0.375. Amounts converted reduce the Company's obligation to make principal installment or interest payments in cash. This arrangement is terminable by the Company at any time on two days notice.

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