12. Notes Payable	9 Months Ended
Sep. 30, 2012
Notes
12. Notes Payable	12. NOTES PAYABLE In December 2011, the Company issued a 90-day note payable to borrow $100,000. Additional notes payable were issues in January 2012 ($100,000); in April 2012 ($100,000), in May 2012 ($25,000); in June 2012 ($20,000); in July 2012 ($325,000); in August 2012 ($50,000); and in September 2012 ($15,000). The proceeds from these notes ($735,000) were used for general corporate purposes. These notes have been extended several times. A conversion feature was added to the Notes when they were extended, which allows for conversion of the eligible principal amounts to common stock at any time after the six month anniversary of the effective date at a rate of $1.05 per share. The full amount of principal and 6.00% simple interest per annum are now due in the quarter ended December 31, 2012. In March 2012, the Company issued a 24-month convertible promissory note to borrow $100,000 for general corporate purposes. Additional 24-month convertible promissory notes were issued in April 2012 ($25,000) and in June 2012 ($100,000). Conversion of the eligible principal amounts to common stock is allowed at any time after the six month anniversary of the effective date of each note at a rate of $1.05 per share The full amount of principal was outstanding at September 30, 2012; 6.00% simple interest is payable monthly in advance. These notes are classified as long term, with due dates in March, April and June of 2014. In March 2011, the Company issued a 90-day note payable to borrow $50,000. The proceeds were used for general corporate purposes. The full amount of principal and 5.00% simple interest per annum was paid during the quarter ended June 30, 2011. At September 30, 2012, $835,000 of the outstanding were Notes payable to related parties; $735,000 to the chairman of our Board and $100,000 to another director. Subsequent to September 30, 2012, an additional $165,000 was borrowed from our chairman. The terms and conditions are the same: 6.00% simple interest per annum and principal are due in the quarter ended December 31, 2012 and the notes are convertible to common stock at any time on or after the effective date of the initial loan amount.

12. Notes Payable

9 Months Ended

Sep. 30, 2012

12. NOTES PAYABLE

In December 2011, the Company issued a 90-day note payable to borrow $100,000. Additional notes payable were issues in January 2012 ($100,000); in April 2012 ($100,000), in May 2012 ($25,000); in June 2012 ($20,000); in July 2012 ($325,000); in August 2012 ($50,000); and in September 2012 ($15,000). The proceeds from these notes ($735,000) were used for general corporate purposes. These notes have been extended several times. A conversion feature was added to the Notes when they were extended, which allows for conversion of the eligible principal amounts to common stock at any time after the six month anniversary of the effective date at a rate of $1.05 per share. The full amount of principal and 6.00% simple interest per annum are now due in the quarter ended December 31, 2012.

In March 2012, the Company issued a 24-month convertible promissory note to borrow $100,000 for general corporate purposes. Additional 24-month convertible promissory notes were issued in April 2012 ($25,000) and in June 2012 ($100,000). Conversion of the eligible principal amounts to common stock is allowed at any time after the six month anniversary of the effective date of each note at a rate of $1.05 per share The full amount of principal was outstanding at September 30, 2012; 6.00% simple interest is payable monthly in advance. These notes are classified as long term, with due dates in March, April and June of 2014.

In March 2011, the Company issued a 90-day note payable to borrow $50,000. The proceeds were used for general corporate purposes. The full amount of principal and 5.00% simple interest per annum was paid during the quarter ended June 30, 2011.

At September 30, 2012, $835,000 of the outstanding were Notes payable to related parties; $735,000 to the chairman of our Board and $100,000 to another director. Subsequent to September 30, 2012, an additional $165,000 was borrowed from our chairman. The terms and conditions are the same: 6.00% simple interest per annum and principal are due in the quarter ended December 31, 2012 and the notes are convertible to common stock at any time on or after the effective date of the initial loan amount.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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