Notes payable:

A note dated January 31, 2006 was issued to Ronald L. Schutté the former Chairman and CEO payable on demand, with interest at the rate of 13% per annum, and secured by the Company’s trademarks. The original amount of the loan was $995,818 of which $195,818 plus additional loans and accrued interest was satisfied upon completion of an exchange agreement dated March 28, 2006. Mr. Schutté also advanced $15,000 to the Company to cover additional expenses during the period. The balance at December 31, 2010 and December 31, 2009 was $0 and $815,000 respectively. On April 29, 2010, pursuant to the Debt Conversion Agreement that we entered into with Mr. Schutte: (i) we forgave accounts receivable for licensing fees due from the baking company owned by Mr. Schutte of $23,232 in exchange for a $23,232 reduction of the principal balance of the note payable to Mr. Schutte in the original principal amount of $815,000, and (ii) we converted the remaining principal balance of $791,768 of Mr. Schutte’s promissory note by issuing 904,878 shares of common stock to Mr. Schutte. During the period ending December 31, 2010 Mr. Schutté advanced $15,763 to the Company. The advances were used for operating expenses.