NOTE 6 - NOTES PAYABLE

12 Months Ended

Dec. 31, 2011

Debt Disclosure [Text Block]

NOTE 6 - NOTES PAYABLE

Notes payable consisted of the following at December 31, 2011:

Notes payable to individuals, subject to contingent settlement agreement and summary judgment, interest at 11.67% per annum, principal and interest due January 1, 2006, in default, unsecured	$	95,740
Note payable, subject to settlement agreement, interest at 12% per annum, principal and interest due July 2005, in default, unsecured		161,000
Note payable, subject to settlement agreement, interest at 9.17% per annum, principal and interest due July 2005, unsecured		71,500
Note payable, subject to settlement agreement, interest at 12% per annum, principal and interest due December 2005, unsecured		100,000
Note payable, interest at 12.5%, due June 2007, verbally extended, unsecured		1,500
Note payable, interest at 12% per annum, due March 2010, verbally extended, unsecured		9,940
Note payable, interest at 12% per annum, due March 2010, verbally extended,  unsecured		1,638
Note payable, interest at 12% per annum, due March 2010, verbally extended, unsecured		1,420
Note payable, interest at 12% per annum, due September 2010, verbally extended, unsecured		776
Note payable, interest at 12% per annum, due April 2014, verbally extended, unsecured		14,625
Note payable, interest at 12% per annum, due July 2014, verbally extended, unsecured		50,000
Note payable, interest at 12% per annum, due August 2014, verbally extended, unsecured		40,000
Note payable, interest at 12% per annum, due August 2014, verbally extended, unsecured		35,000
Note payable, interest at 12% per annum, due November 2014, verbally extended, unsecured		60,000
Note payable, interest at 12% per annum, due November 2014, verbally extended, unsecured		60,000
Note payable, interest at 12% per annum, due December 2014, verbally extended, unsecured		50,000
Total Notes Payable	$	753,139
Less: Current Portion:		(443,514	)
Long-Term Notes payable	$	309,625

Notes payable consisted of the following at December 31, 2010:

Notes payable to individuals, subject to contingent settlement agreement and summary judgment, interest at 11.67% per annum, principal and interest due January 1, 2006, in default, unsecured	$	95,740
Note payable, subject to settlement agreement, interest at 12% per annum, principal and interest due July 2005, in default, unsecured		161,000
Note payable, subject to settlement agreement, interest at 9.17% per annum, principal and interest due July 2005, unsecured		71,500
Note payable, subject to settlement agreement, interest at 12% per annum, principal and interest due December 2005, unsecured		100,000
Note payable, interest at 12.5%, due June 2007, verbally extended, unsecured		1,500
Note payable, interest at 12% per annum, due January 2010, verbally extended, unsecured		4,000
Note payable, interest at 12% per annum, due January 2010, verbally extended, unsecured		8,000
Note payable, interest at 12% per annum, due January 2010, verbally extended,  unsecured		5,000
Note payable, interest at 12% per annum, due March 2010, verbally extended, unsecured		9,940
Note payable, interest at 12% per annum, due March 2010, verbally extended,  unsecured		1,638
Note payable, interest at 12% per annum, due March 2010, verbally extended, unsecured		1,420
Note payable, interest at 12% per annum, due May 2011, unsecured		9,000
Note payable, interest at 12% per annum, due June 2011, unsecured		18,940
Note payable, interest at 12% per annum, due September 2011, unsecured		40,000
Note payable, interest at 12% per annum, due July 2011, unsecured		25,940
Note payable, interest at 12% per annum, due September 2010, verbally extended, unsecured		776
Note payable, interest at 12% per annum, due November 2009 and verbally extended, unsecured		45,000
Note payable, interest at 12% per annum, due October 2010, verbally extended,  unsecured		20,000
Note payable, interest at 12% per annum, due November 2009 and verbally extended, unsecured		50,000
Note payable, interest at 12% per annum, due December 2009 and verbally extended, unsecured		90,000
Note payable, interest at 12% per annum, due January 2010, verbally extended, unsecured		25,000
Note payable, interest at 12% per annum, due May 2010, verbally extended,  unsecured		23,000
Note payable, interest at 12% per annum, due March 2010, verbally extended, unsecured		30,000
Note payable, late charge at 15%, due May 2010, verbally extended, unsecured		2,000
Note payable, interest at 12% per annum, due May 2011, unsecured		35,000
Total Notes Payable	$	874,394

The interest expense for the years ended December 31, 2011 and December 31, 2010 is $55,485 and $154,664, respectively.

The Company entered into a contingent settlement agreement on July 26, 2004 related to $440,765 of notes payable to individuals and related accrued interest. In July 2004, the Company paid a total of $73,333 towards the debt and agreed to pay a total of $298,667, including interest through January 2006 in full payment. The Settlement Agreement provides for an accelerated payment schedule at the Company's option, which would reduce the total payment made by the Company by approximately $12,000. The Company defaulted on the two remaining payments totaling $80,000 at which time the entire remaining balance became due, including default interest and legal fees.  The Company currently has accrued $514,881 for interest and legal fees (included in the accrued interest of $754,781 as of December 31, 2011) in addition to the $95,740 principal balance (included in the notes payable of $769,839 as of December 31, 2011).

During August 2004, the Company entered into an agreement to settle a note payable in the amount of $200,000 plus accrued interest. The parties agreed to settle the debt for $261,000 payable as follows: Twelve consecutive payments of $12,500 payable monthly commencing August 31, 2004 and ending July 31, 2005; a lump-sum payment of $95,000 payable on July 31, 2005; and a one-time interest payment of $16,000 on July 31, 2005. This agreement includes an additional $7,500 as inducement to the note holder to enter into the extended agreement, which was amortized as a loan fee over the term of the agreement.  Scheduled payments were not made on the note and the company is currently in default.   The Company currently has accrued $110,656 for interest (included in the accrued interest of $754,781 as of December 31, 2011) in addition to the $161,000 principal balance (included in the notes payable of $769,839 as of December 31, 2011.

During August 2004, the Company entered into an agreement to settle a note payable in the amount of $100,000 plus accrued interest. The parties agreed to settle the debt for $130,800 payable as follows: Twelve consecutive payments of $6,000 payable monthly commencing August 31, 2004 and ending July 31, 2005; a lump-sum payment of $50,500 payable on July 31, 2005; and a one-time interest payment of $8,300 on July 31, 2005. The Company has recognized a $38,610 gain on forgiveness of accrued interest related to this transaction.  Scheduled payments were not made on the note and the company is currently in default.  The Company currently has accrued $34,709 for interest (included in the accrued interest of $754,781 as of December 31, 2011) in addition to the $71,500 principal balance (included in the notes payable of $769,839 as of December 31, 2011.