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Payables and Accruals
3 Months Ended
Mar. 31, 2012
Payables and Accruals  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]

NOTE 5 -       NOTES PAYABLE

 

During 2011, the Company entered into a convertible promissory note agreement with an investor for $20,000.  The note carries an interest rate of 10% per annum.  The term of the loan is 18 months.  The principal and interest on the note may be converted into shares of common stock at the lower of $0.16 or a price equal to that of the thirty day moving average of the adjusted closing price for the Company’s common stock.    In accordance with FASB ASC 470 a beneficial conversion feature was recognized as a debt discount of $5,000 upon the issuance of this loan which will be amortized over the life of the loan.  As of March 31, 2012, $1,389 of the discount had been amortized to interest expense.  Accrued interest on this note was $833 and $333 as of March 31, 2012 and December 31, 2011, respectively.

                                       

During 2010, the Company entered into a loan agreement with an investor.  The note carried an interest rate of 7% per annum.  During the year ended December 31, 2011, the Company received $137,000 in proceeds from additional loans made under this agreement.  Effective August 1, 2011, a new agreement was entered into converting the note to a senior convertible promissory note, with a term of 18 months and an interest rate of 10% per annum.   The principal balance at that date was $166,200.  The principal and interest on the note may be converted into shares of common stock at the lower of $0.20 or a price equal to that of the thirty day moving average of the adjusted closing price for the Company’s common stock.   In accordance with FASB ASC 470 a beneficial conversion feature was recognized as a debt discount of $83,100 upon entry into the new agreement to be amortized over the life of the loan.  As of March 31, 2012, $36,933 of the discount had been amortized to interest expense.  In February 2012, the Company received $21,000 in proceeds from an additional loan made under this agreement.  The terms remain the same with the due date being extended to February 28, 2013.  The principal balance due was $187,200 and $166,200 at March 31, 2012 and December 31, 2011, respectively.  Interest accrued on this note is $15,145 and $10,815 as of March 31, 2012 and December 31, 2011, respectively.