Notes Payable to Related Parties

6 Months Ended

Jun. 30, 2011

Notes Payable to Related Parties [Abstract]

Notes Payable to Related Parties

3. Notes Payable to Related Parties

Parkson, a wholly-owned subsidiary of the Company, is indebted to Bay Colony Associates, Ltd. (“Bay Colony”), an entity wholly-owned by the Majority Stockholder, under a renewal promissory note dated January 31, 2011 in the principal amount of $562,500, which replaced certain prior notes by Parkson to Bay Colony relating to Parkson's purchase of the Real Property (the “2011 Parkson Replacement Note”).  The 2011 Parkson Replacement Note bears interest at the rate of 7% per annum.  The principal and interest on the 2011 Parkson Replacement Note substantially exceed the value of the Real Property, and are due in one lump sum on the note's maturity date of January 8, 2012.

On March 3, 2010, September 1, 2010, and January 6, 2011 the Company received working capital loans from the Majority Stockholder Trust in the amount of $130,000, $60,000 and $125,000, respectively.  All three of the loans are unsecured and evidenced by promissory notes which accrue interest at the prime rate (3.25% as of June 30, 2011).  Interest and principal are due in one lump sum on the maturity date of January 8, 2012.

On January 31, 2011, the Company consolidated three working capital loans made in the prior fiscal year by the Majority Stockholder Trust (and their corresponding accrued interest of $4,319) that matured on January 8, 2011 into one renewal note in the amount of $99,319 that matures on January 8, 2012.  Interest and principal are due in one lump sum on the maturity date.  With the exception of extending the maturity date until January 8, 2012, the terms of the renewal note are the same as the original notes.

The Company received an additional working capital loan on April 22, 2011 in the amount of $100,000 from the Majority Stockholder Trust.  The loan is unsecured and evidenced by a promissory note which accrues interest at the prime rate (3.25% as of June 30, 2011).  Interest and principal are due in one lump sum on the maturity date of January 8, 2012.