NOTE 4. NOTES PAYABLE

3 Months Ended

Mar. 31, 2012

NOTE 4.

NOTES PAYABLE

During the three month period ended March 31, 2012, the Company borrowed an aggregate of $200,000 from third parties under various promissory note agreements. The promissory notes all bear interest at 12.0% per annum, and are due on or before February 21, 2014. No principal or interest payments have been made on these notes. As of March 31, 2012 and December 31, 2011, the Company had total notes payable amounting to $925,014 and $753,139 respectively

The interest expense on these notes payable for the three months ended March 31, 2012 and 2011 amounted to $32,048 and $27,384, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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