RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 13 – RELATED PARTY TRANSACTIONS

During the three month period ended March 31, 2013:

In January of 2013, the Company entered into a convertible loan agreement in the amount of $7,500 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before June 30, 2013. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.004 per share.

In February of 2013, the Company entered into a convertible loan agreement in the amount of $15,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before July 30, 2013. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.004 per share.

In February of 2013, the Company entered into a convertible loan agreement in the amount of $10,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before August 7, 2013. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.005 per share.

In March of 2013, the Company entered into a convertible loan agreement in the amount of $23,000 with an individual who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before September 6, 2013. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.015 per share.

In January of 2013, the Company entered into an agreement with an individual who is related to the Company’s CEO to join the Company’s Board of Directors. Under the  agreement, the Director agreed to provide various services to the Company including making recommendations for both the short term and the long term business strategies to be employed by the Company, monitoring and assessing the Company's business and to advise the Company’s Board of Directors with respect to an appropriate business strategy on an ongoing basis, commenting on proposed corporate decisions and identifying and evaluating alternative courses of action, making suggestions to strengthen the Company's operations, identifying and evaluating external threats and opportunities to the Company, evaluating and making ongoing recommendations to the Board with respect for one year and may be terminated by either the Company or the Director by providing written notice to the other party. The agreement also terminates automatically upon the death, resignation or removal of the Director.  Under the terms of the agreement, the Company agreed to pay the Director 4,000,000 restricted shares of its common stock at a future date and to negotiate future compensation on a year-by-year basis. The Company also agreed to reimburse the Director for pre approved expenses.

The Company has an ongoing verbal agreement with a limited liability company that is controlled by a person who is related to the Company’s CEO to pay the related party consultant $2,400 per month to provide background research, background checks and investigative information on individuals and companies, and act as an administrative specialist to perform administrative duties and clerical services. The consultant provides the services under the direction and supervision of the Company’s CEO. During the three month period ended March 31, 2013, the Company paid the related party consultant fees of $4,800. All fees paid to the related party consultant during the three month period ended March 31, 2013 are included as an expense in consulting and contractor fees in the accompanying income statement for the period. At March 31, 2013, the Company owed the limited liability company $1,200 and this amount is included in accounts payable and accrued liabilities in the accompanying balance sheet.

The Company has an ongoing agreement with a limited liability company that is owned and controlled by a person who is related to the Company’s CEO to provide stock transfer agency services. During the three month period ended March 31, 2013, the Company paid the related party transfer agency fees of $4,864. All fees paid to the related party consultant during the three month period ended March 31, 2013 are included as an expense in consulting and contractor fees in the accompanying income statement for the period. At March 31, 2013, the Company owed the related party limited liability company $12,780 for transfer agency services rendered, legal fees incurred and other services. This amount is included in accounts payable and accrued liabilities in the accompanying balance sheet. In March of 2013, the Company entered into two separate debt settlement agreements with the related party vendor to settle a total of $12,751 of outstanding debt related to legal fees incurred by the related party vendor due to a lawsuit against the Company of which the related party vendor was also named as a defendant due to its position as the Company’s stock transfer agency. The Company issued 1,505,834 shares of its common stock to this vendor as satisfaction for the outstanding debt. The agreement between the Company and the vendor stipulated that should the transfer agency realize less than $12,751 from the sale of the stock, then they are entitled to receive up to an additional 2,000,000 shares of common stock or a cash payment until the balance is paid in full.

NOTE 13 – RELATED PARTY TRANSACTIONS - continued

At March 31, 2013 the following promissory notes and shareholder loans were outstanding to related parties:

A convertible note payable dated January 9, 2009, due to a person related to the Company’s CEO with a face amount of $10,000. This note bears interest at a rate of 10% per annum with interest payment to be paid monthly and is convertible at the note holder’s option into the Company’s common stock at $0.015 per share.  The convertible note payable was due on or before January 9, 2010 and is secured.  This convertible note payable is currently in default due to non-payment of principal and interest.

A convertible loan dated January 25, 2010, in the principal amount of $6,000 with a person who is related to the Company’s CEO. This loan pays interest at a rate of 6% per annum and the principle and accrued interest are due on or before January 25, 2011. The note is not secured and is convertible at the lender’s option into shares of the Company’s common stock at a rate of $0.005 per share. This loan is currently in default due to non-payment of principal and interest.

A loan agreement dated February 24, 2010, the principal amount of $7,500 with a corporation. The Company’s CEO is a director of the corporation and a former Director of the Company is an officer of the corporation. The loan is not secured and pays interest at a rate of 6% per annum and the principle and accrued interest were due on or before February 24, 2011. This loan is currently in default due to non-payment of principal and interest.

A convertible note payable dated January 7, 2013, due to a person related to the Company’s CEO with a face amount of $7,500. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.004 per share.  The convertible note payable is due on or before June 30, 2013 and is not secured.  

A convertible note payable dated January 19, 2013, due to a person related to the Company’s CEO with a face amount of $15,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.004 per share.  The convertible note payable is due on or before July 30, 2013 and is not secured.  

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A convertible note payable dated February 7, 2013, due to a person related to the Company’s CEO with a face amount of $10,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.005 per share.  The convertible note payable is due on or before August 7, 2013 and is not secured.  

A convertible note payable dated March 6, 2013, due to a person related to the Company’s CEO with a face amount of $23,000. This note bears interest at a rate of 6% per annum with accrued interest to be paid at the time that the principal balance is repaid or the note is converted into shares of the Company’s common stock. The note is convertible at the note holder’s option into the Company’s common stock at $0.015 per share.  The convertible note payable is due on or before September 6, 2013 and is not secured.