2. Notes Payable and Capital Lease

9 Months Ended

Sep. 30, 2013

Notes

2. Notes Payable and Capital Lease

2. Notes Payable and Capital Lease

At September 30, 2013 and December 31, 2012, the Company had the following promissory notes outstanding:

	September 30, 2013 (Unaudited)		December 31, 2012
23% installment note, secured by equipment, due January 2014, signed personally by a related party	$	4,959	$	-
21% installment note, secured by equipment, due November 2013, signed personally by related party		3,810		19,407
12% promissory note, payable to individual, interest due monthly, secured by the assets of the Company, due on April 22, 2011 **		-		50,000
8.95% installment note, secured by equipment, due October 2013, signed personally by a related party		598		5,667
12% line of credit payable, secured by the assets of the company, due on demand after June 30, 2013		77,241		77,241
12% line of credit payable, secured by the assets of the company, due on demand after June 30, 2013		5,000		5,000
14% installment note, secured by equipment, due June 1, 2014, signed personally by a related party		9,053		17,321
13.7 installment note, secured by property, due January 18, 2023		11,112		-
15% promissory note payable to individual, due on demand, in default		17,000		17,000
10% promissory note payable to individual, due April 2013		26,000		30,000
29.49% Dell business credit note for purchase of computer		4,081		-
20.6% installment note, secured by equipment, due December 2012, signed personally by related party		-		1,062
Total notes payable and capital lease		158,854		222,698
Less: Current maturities		(147,742)		(216,475)
Notes payable and capital lease – Long Term	$	11,112	$	6,223

Maturities of notes payable and capital lease at September 30, 2013 are as follows:

Period ending September 30,	Amount ($)
2014		147,742
2015 and Beyond		11,112
	$	158,854

2. Notes Payable and Capital Lease (Continued)

** The 12% promissory note was originally due April 22, 2011 but on May 19, 2011 the repayment of principal was postponed until 5 days after the sale of the Hutchins facility. Interest continued to accrue until January 2013.  On January 11, 2013 the $50,000 note and $7,500 in accrued interest were converted into 1,250,000 shares of common stock of the company.  The conversion price was $0.046 per share.

Issuance of Lines of Credit

On April 18, 2012 the company was issued a line of credit for $5,000 at a rate of 12% interest, secured by the assets of the company.  Interest on the Line began to accrue from July 1, 2012, with the balance being due on demand anytime after June 30, 2013.  The Company drew $5,000 against the line of credit as of September 30, 2013.

On April 26, 2012 the company was issued a line of credit for $80,000 at a rate of 12% interest, secured by the assets of the company.  Interest on the Line began to accrue on July 1, 2012, with the balance being due on demand anytime after June 30, 2013.  The Company drew $77,241 against this line of credit as of September 30, 2013.