14. Related Party Transactions

3 Months Ended

Mar. 31, 2013

Notes

14. Related Party Transactions

14.       RELATED PARTY TRANSACTIONS

Our board of directors determined that when a director's services are outside the normal duties of a director, we compensate the director at the rate of $1,000 per day, plus expenses, which is the same amount we pay a director for attending a one-day Board meeting.  We classify these amounts as consulting expenses, included in personnel and consulting expenses.

At March 31, 2013, $1,915,000 of the outstanding Notes were Notes payable to related parties; $1,815,000 to the chairman of our Board, Peter Brennan, and $100,000 to another director, Stan Yarbro.  Subsequent to March 31, 2013, an additional $590,000 was borrowed from our chairman.  The terms and conditions are as defined in Note 11.  At December 31, 2012, $1,310,000 of the outstanding Notes were Notes payable to a related party, the chairman of our Board, Peter Brennan, and $100,000 to another director, Stan Yarbro.