Notes and Short-term Receivables

12 Months Ended

Dec. 31, 2011

Notes And Short-Term Receivables

Notes and Short-term Receivables

4.      Notes and Short-term Receivables

At December 31, 2011 and 2010, notes and short-term receivables consisted of:

	December 31,
		2,011		2,010
Note receivable for annulment of Triple 8 acquisition	$	1,269,000	$	-	a.
Commercial note receivable, net of impairment		50,900		-	b.
Foreign company promissory note		-		423,148	c.
Total notes and short-term receivables	$	1,319,900	$	423,148

a.   In connection with the Triple 8 annulment agreement, the Company has a short term receivable of $1,269,000 which requires monthly payments of $68,914 in January 2012, $73,214 per month from February 2012 through October 2012, and a final payment of $541,860 in November 2012.  This receivable bears no interest and is the remaining portion, after the initial payment of $732,000, of the total $2,001,000 that Triple 8 agreed to pay the Company under the annulment of the share purchase agreements.

b.   Note receivable from Fortune Market Media Inc. (the “FTMK”), original principal of $150,000, interest at a 12% annual rate, maturing on February 13, 2012.  The Company established a reserve for loan losses of $100,000 in anticipation of a default.  The Company evaluated the loan impairment of the FTMK note based on relevant information about the ability of borrower to service its debt such as: current financial information, historical collections experience, credit documentation, public information and current economic trends.

c.   Promissory note receivable with an original principal amount of $400,000 due from a foreign corporation, A.T. Limited (the “ATL Note”), plus accrued interest of $23,148 at December 31, 2010.  This note had an annual interest rate of 12%.

The Company’s investment in impaired loans is as follows as of December 31, 2011 and 2010:

	2011		2010
Investment in impaired loans	$	150,000	$	-
Investment in impaired loans that have a
related allowance for credit losses	$	150,000	$	-
Investment in impaired loans that do not have a
related allowance for credit losses	$	-	$	-
Total allowance of credit losses on impaired loans	$	100,000	$	-
Total unpaid principal balance	$	150,000	$	-

The Company’s related interest income on these impaired loans is as follows:

	2011		2010
Average recorded investment in impaired loans	$	150,000	$	-
Related amount of interest income recognized
for the time the loans were impaired	$	900	$	-
Total reserve on accrued interest income	$	900	$	-