Quarterly report pursuant to Section 13 or 15(d)

NOTE PAYABLE

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NOTE PAYABLE
 9 Months Ended
Sep. 30, 2012
Notes to Financial Statements  
Note 8. NOTE PAYABLE

Notes payable is as follows:

 

    September 30,     December 31,  
    2012     2011  
             
Senior secured promissory note dated July 15, 2011, issued to an accredited investor, maturing July 15, 2012, bearing interest at a rate of 15% per annum.  The maturity date has been extended until October 15, 2012.  Principal in the amount of $150,000 was paid during the nine months ended September 30, 2012.  Interest shall be paid in cash or common stock at the holders’ option.   $ 100,000     $ 250,000  
                 
Unsecured promissory demand note dated May 7, 2012, issued to an accredited investor, bearing interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share.     5,000         -  
                 
Promissory note dated July 15, 2012, issued to an accredited investor, maturing July 15, 2013, bearing interest at a rate of 12% per annum. Principal and interest may be converted into common stock  based on the average trading price of the ten days prior to maturity at the holders’ option.     150,000             -  
                 
Unsecured promissory demand notes, issued to an accredited investor, bearing interest at a rate of 4% per annum.  Holder may elect to convert into common stock at $0.75 per share.     74,982         -  
    $ 329,982     $ 250,000  

 

The senior secured promissory notes are secured by shares of common stock.  The $100,000 note is secured by 1,500,000 shares of common stock. There is accrued interest of $42,774 as of September 30, 2012.