Accounts Payable and Short Term Convertible Notes

9 Months Ended

Sep. 30, 2011

Accounts Payable And Short Term Convertible Notes

Accounts Payable and Short Term Convertible Notes

NOTE 7

Accounts Payable and Short Term Convertible Notes

As of September 30, 2011 the Company owes $434,600 in payables and accrued expenses.

In connection with the acquisition of just under 50% of VI, the Company owes APH on a short-term note payable in the principal amount of $1,000,000, and $52,110 in accrued interest, and owes HAM on a short-term note payable in the principal amount of $600,000, and $17,458 in accrued interest.  The notes and accrued interest are classified as short-term liabilities on the financial statements included herein reflecting the anticipated extension of maturity (both Notes matured on June 30, 2011 and the Company is in default). The Notes both carry 6% annual interest, and are convertible to common shares. The Company has since defaulted on its notes payable to APH and HAM in connection with the acquisition of the Asset.  These notes were amended and extended to mature in June 30, 2011. As of the date of these financial statements contained herein, the Company is in default on these Notes.  The Company been notified by APH and HAM that they have transferred their notes to third parties.  The Company is in negotiations with APH and HAM (for the benefit of the third parties) to resolve the default.  There is no guarantee that a settlement will be reached in this matter.