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NOTE 11 - NOTES PAYABLE - RELATED PARTY
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9 Months Ended |
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Sep. 30, 2012
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| Notes to Financial Statements | |
| NOTE 11 - NOTES PAYABLE - RELATED PARTY |
NOTE 11 NOTES PAYABLE RELATED PARTY
On May 28, 2011, the Companys Chairman and Chief Executive Officer advanced the Company $25,000 in exchange for a promissory note, bearing an annual interest of 6% and a repayment term of seven months, in order to fund the working capital needs of the Company. On January 1, 2012, the note was extended for 12 months; the Company made two principal payments of $5,000 each on June 21 and June 28 of 2012 which reduced the principal balance at June 30, 2012 to $15,000. From July 19, 2012 until August 29, 2012 the Company made further principal payments of $15,000 such that the principal balance owed is now zero. As of September 30, 2012, accrued interest of $1,796 is now due on the note.
At various times during the three months ended June 30, 2012, the Companys President, advanced a total of $68,500. No interest was due on these short-term advances. At June 30, 2012, there was a balance due of $40,000. On July 2, 2012, the balance was paid in full.
During the third quarter the company processed accrued payroll for two of its officers. The resultant net pay of $89,154 was deferred and is being held by the company and is recorded as officers loans due (shown as Notes Payable Related Party). The company plans to pay these loans as sufficient funds are available.
On June 20 and 28, 2012, a partnership in which the President of the Company is a partner, made a non interest bearing short-term loan to the Company in the amount of $60,000. This loan was subsequently invested into the Companys current private offering in exchange for a one year convertible note with a coupon of 10% , face value $66,000. The note is convertible into 1,320,000 shares at $0.05 per share and 1,250,000 warrants at $0.10 per share.
During the three months ended June 30, 2012, the Company reclassified $30,265 of accounts payable balances to notes payable-related party. These balances were a result of Company expenses charged to its Chief Executive Officers personal credit cards. The Company was previously paying the credit card companies directly.
At September 30, 2012, the balance due on all notes payable to related parties is $122,495.
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