RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

NOTE F - RELATED PARTY TRANSACTIONS

Related party advances

From time to time, Steven Ivester, the Company’s former sole shareholder and currently a consultant to the Company through a Consulting Services Agreement with iTella, Inc., has made personal advances to the Company. These advances, formalized under an unsecured revolving promissory note dated March 18, 2010, allow for a maximum principal loan amount of $1,000,000, are repayable upon demand, and are non-interest bearing. Such advances amounted to $654,155 and $608,759 at December 31, 2011 and 2010, respectively. See Note E for the 800 Domain Name transaction involving Mr. Ivester.

Related party consulting fees

Effective August 1, 2009 and subsequently amended, the Company executed a Restated Consulting Services Agreement with iTella, Inc., whereby iTella, Inc. provides, at the reasonable request of the Company’s management, advanced business strategy, financing, product development and marketing advice including but not limited to day to day operations. The initial term of this agreement is for five years, and automatically renews for additional one year terms if approved by both parties. During this agreement’s term and at the Company’s expense, iTella, Inc. will be provided an office and administrative support in Weston, Florida. iTella, Inc.’s compensation shall currently consists of the following:

1. Annual cash payments of $250,000, payable monthly;

2. Nine percent of the Company’s consolidated gross revenue, payable quarterly (except the first two months, in which the rate is one percent of gross revenues), and subject to an annual calendar year cap of $800,000;

3. Employees of Consultant  may be eligible for grants of stock options pursuant to the Company’s  Equity Incentive  Plan, in such amounts as may from time to time be determined by the Company, at its sole discretion; and

4. Reimbursement of reasonable, related business expenses.

Expenses under the Restated Consulting Services Agreement for the year ended December 31, 2011 and 2010 were $429,274 and $5,919, respectively. Prior to closing the Restated Consulting Services Agreement, Quamtel did not have expertise in the management and financing of a public company, and required the services of iTella, Inc. as outlined in the Restated Consulting Services Agreement. The Restated Consulting Services Agreement is not cancellable by either party in advance of its contractual term, except under a defined change in control.

On August 20, 2009, the Company also executed a one-year consulting agreement with Mr. Warren Gilbert (“Gilbert”), who is the president of Gilder Funding Corp., a shareholder of the Company, whereby Gilbert will provide advice and counsel regarding the Company’s financial management and strategic opportunities. As compensation, Gilbert was issued 300,000 shares of the Company’s common stock, which were registered on a registration statement on Form S-8 on November 9, 2009. The 300,000 common shares were valued at $810,000 based on the traded market per-share market price per share of $2.70 at August 20, 2009, and have been reflected as additional paid-in capital on the company’s consolidated balance sheet, and a noncash charge included in Compensation, consulting and related expenses in the Company’s consolidated statement of operations.  Under the same consulting agreement, on June 1, 2011, Gilbert was issued an additional 1,600,000 restricted shares of the Company’s common stock. The 1,600,000 common shares were valued at nine-teen cents ($0.19) per share or $304,000, and have been reflected as additional paid-in capital on the company’s consolidated balance sheet, and a noncash charge included in Compensation, consulting and related expenses in the Company’s consolidated statement of operations.