Notes Payable and Capital Lease (Tables)

6 Months Ended

Jun. 30, 2012

Notes Payable And Capital Lease Tables

Promissory notes outstanding

At June 30, 2012 and December 31, 2011, the Company had the following promissory notes outstanding:

	June 30, 2012 Unaudited		December 31, 2011
18% installment note, secured by equipment, due December 2013, signed personally by a related party (Note 3)	$	26,885	$	-
14% installment note, secured by equipment, due July 1 2014, signed personally by a related party(Note 3)		22,371		-
12% line of credit payable, secured by the assets of the company,due on demand after 6/30/13.		76,213
12% line of credit payable, secured by the assets of the company,due on demand after 6/30/13.		5,000
12% promissory notes payable to individual, interest due monthly, secured by the assets of the Company, due on April 22, 2011 **		50,000		50,000
15% promissory note payable to individual, due on demand, in default		17,000		17,000
7.5% promissory note with bank, co-signed with related party (Note 3)		-		75,000
20.6% installment note, secured by equipment, due December 2012, signed personally by related party		8,204		13,382
Total notes payable and capital lease		205,673		155,382
8% convertible note, unsecured, due on September 7, 2012		30,500		42,500
Total notes payable and capital lease including convertible note		236,173		197,882
Less: Unamortized debt discount on convertible note		(10,766)		(38,791)
Total notes payable and capital lease including convertible note  net of debt discount		225,407		159,091
Less: current maturities, net of unamortized debt discount		(225,407)		(155,193)
Notes payable and capital lease – Long-term	$	--	$	3,898

Maturities of notes payable and capital lease

Maturities of notes payable and capital lease at June 30, 2012 are as follows:

Period ending  June 30,	Amount ($)
2013	$	225,408

Schedule of assumptions related to the determining of the fair value of an embedded derivative

The fair value of the described embedded derivative of $42,069 at June 30, 2012 was determined using the Black-Scholes Model with the following assumptions:

(1) risk free interest rate of	10%;
(2) dividend yield of	0%; and
(3) volatility factor of	336%;