Related Parties Transactions

9 Months Ended

Sep. 30, 2011

Related Parties Transactions

Related Parties Transactions

NOTE 13

Related Parties Transactions

Per the Dunckel Agreement whereby the Company is employing Darren Dunckel as its Chief Executive Officer, the Company accrued $90,000 as salary and related compensation for the nine months ended on September 30, 2011.

Per the Officer and Directors agreements, the Company accrued $31,019 as compensation for the period ended on September 30, 2011 since commencement.

Rasel - Affiliated Party during 2010 - On October 6, 2009 the Company signed a Note Payable for $25,000 payable to Rasel (an affiliated entity during 2010) due on October 6, 2010 at 4% per annum.   The proceeds were used to pay for half of an existing Accounts Payable to Stephen Fleming for legal fees incurred at the Company’s inception. On October 20, 2009 the Company signed a Note Payable for $50,000 payable to Rasel (a Company Shareholder) due on October 20, 2010 at 4% per annum.   These proceeds were used to pay for startup costs, audit fees and future expenses. On January 22, 2010 the Company signed a Note Payable for $50,000 payable to Rasel (a Company Shareholder) due on October 30, 2011 at 4% per annum.   These proceeds will be used for working capital and future expenses. On January 22, 2010 the Company signed an amendment to extend the maturity date of the Promissory Notes in the amount of $50,000 and $25,000 dated October 6, 2009 and October 20, 2009, respectively, to October 30, 2011. On March 2, 2011 the Company and Rasel agreed to extend the maturity of all notes to December 31, 2012 in consideration of adding a conversion feature to the notes with either a 5% discount to the market price or a fixed price of $0.60. The extension of maturity was agreed to be effective as of December 30, 2010.  The accrued balance of the notes including interest as of September 30, 2011 is $134,288.

In connection with the acquisition of just under 50% of the VI, the Company owes APH on a short-term note payable in the principal amount of $1,000,000, and $52,100 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 mature 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 note payable to APH in connection with the acquisition of the Asset.  The note was 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 the APH Note. The Company been notified by APH that it sold or transfer its note to third parties. The Company is in negotiations with APH (for the benefit of the third parties) to resolve the default.  There is no guarantee that a settlement will be reached in this matter.