Related Party Transactions

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements

Note 4. Related Party Transactions

The Company’s transactions with LeadDog Capital LP were as follows:

Balance at beginning of period	$	409,398
New borrowings at 16% interest rate		1,987
Interest accrued		39,810
Redemption of indebtedness by the issuance
of 1,500,000 shares of common stock		(19,325	)
Balance at end of period	$	431,870

At September 30, 2012, notes and interest payable to related party includes unpaid interest of $80,219.  The notes are payable within one year of the origination date of the notes or under extensions through December 2012. These notes are currently past due; however, no demand has been made for payment by LeadDog.

LeadDog Capital LP and its affiliates are shareholders and warrant holders; however, the group is restricted from becoming a beneficial owner (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of 1934, as amended, (the 1934 Act)), of the Company’s common stock which would exceed 9.5% of the number of shares of common stock outstanding.