RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

RELATED PARTY TRANSACTIONS

NOTE 11 – RELATED PARTY TRANSACTIONS

At December 31, 2011, 2010, 2009 and 2008, five shareholders of the Company held $577,500, $579,000, $579,000 and $579,000, respectively, of the senior secured convertible notes payable.

One shareholder held $140,000 of convertible notes payable as of December 31, 2011, 2010 and 2009. Two shareholders held $400,000 of convertible notes payable as of December 31, 2008.

At December 31, 2011, 2010, 2009, two shareholders of the Company held $636,500, $651,500, and $612,500, respectively, of unsecured notes payable. At December 31, 2008, one shareholder held $368,500 of unsecured notes payable.

The Company maintains its office at the home of its Chief Executive Officer and President. No formal lease agreement exists and no direct rent expense has been incurred. However, related occupancy costs of $13,220, $8,972, $9,658, and $5,687 were incurred during the years ended December 31, 2011, 2010, 2009 and 2008.

At December 31, 2011, 2010, 2009 and 2008, accrued and unpaid salary for the President and CEO was $208,514, $143,330, $195,456, and $138,771, respectively.