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NOTES PAYABLE

12 Months Ended

Dec. 31, 2011

At December 31, 2011 and 2010, notes payable consisted of the following:

	2011		2010

Promissory note payable - shareholders	$	536,990	$	2,014,934
Note payable - Abundance Partners LLC		102,413		84,763
Note payable - Dell Computer		42,821		40,951
Note payable - American Honda Finance Corporation		-		14,321
Note payable - AFS/IBEX Bank		10,193		7,963

Total short-term notes payable	$	692,417	$	2,162,932

Estimated aggregate maturities of notes payable as of December 31, 2011 is as follows:

Secured Promissory Note Payable - Shareholder

On December 15, 2009, the Company issued an unsecured $200,000 promissory note (the “2009 Gilbert Note”) to Gilbert for cash. The 2009 Gilbert Note bears interest at 15.9% per year, and unpaid principal and interest were repayable in full on June 15, 2010. Under the terms of the 2009 Gilbert Note, Gilbert was to be paid $40 toward the Gilbert Note for each Data Jack unit sold, plus a $5.00 bonus payment (in addition to interest) on each Data Jack unit sold up to 5,000 units. No such payments were due or made. The 2009 Gilbert Note, with accrued interest, was repaid in full on February 27, 2010 from proceeds of the 2010 Secured Gilder Note (defined below).

On February 27, 2010, the Company executed a $1,000,000 Senior Secured Promissory Note payable to Gilder Funding Corp. (“Gilder”), a company that is a shareholder of the Company and controlled by Gilbert (the “2010 Secured Gilder Note”) for cash. The proceeds of the 2010 Secured Gilder Note were used, in part, to repay the 2009 Gilbert Note, with accrued interest. Interest on the 2010 Secured Gilder Note is 15% per annum, and beginning April 5, 2010, the Company was required to make monthly payments on the 2010 Gilder Note in the amount of $23,789.93 per month, with any remaining outstanding principal and any accrued but unpaid interest due on or before February 27, 2016. The 2010 Secured Gilder Note is secured by substantially all of the Company’s assets. Effective May 24, 2010, the Company and Gilder amended the 2010 Secured Gilder Note to increase the principal amount to $1,250,000, with the Company receiving the additional $250,000 in cash. Effective June 15, 2010, monthly payments were increased to $27,000; and the maturity date was changed to February 27, 2015. The Company made three monthly payments of $27,000 under the 2010 Secured Gilder Note and has since begun making monthly payments of $11,000. Because of this reduced monthly payment, the Company is in default of the terms of the 2010 Secured Gilder Note and, as such, at the option of Gilder, the entire unpaid principal balance and the accrued and unpaid interest are due and payable on demand, with past due principal bearing interest from the date of default at the maximum rate allowed by law. Gilder, under a security agreement with the Company, holds a first priority lien and security interest in all of the assets of the Company, which secures the performance of the Company’s obligations under the 2010 Secured Gilder Note. At December 31, 2010 the outstanding principal and interest of the 2010 secured Gilder Note was $1,247,595.

On August 11, 2011, the Company and Gilder entered into a settlement and release agreement pursuant to which the Company issued to Gilder six million five hundred thousand (6,500,000) restricted shares of its common stock (the “Settlement Shares”) in exchange for settlement in full of the 2010 Secured Gilder Note, which, with accrued but unpaid interest amounted to an aggregate of $1,348,268 as of the settlement date. Under this settlement and release, Gilder agreed to fully release and forever discharge the Company from any and all obligations under the 2010 Secured Gilder Note and to terminate its security interest in the assets of the Company granted under that certain security agreement dated February 27, 2010 executed in connection with the issuance of the 2010 Secured Gilder Note. Concurrently with this settlement, the Company entered into a consulting agreement with Gilder pursuant to which it agreed to pay Gilder $11,000 per month for 12 months for consulting services to the Company relating to financial management and strategic opportunities.

Unsecured promissory note payable

On December 13, 2010, the Company issued an unsecured $250,000 promissory note to Gerald and Seena Sperling (the “2010 Sperling Note”), together a shareholder of the Company (the “Sperlings”), for cash. The 2010 Sperling Note bears interest at 3% per year and was payable in full, with interest, on February 25, 2012. At December 31, 2010, the outstanding principal and interest on the 2010 Sperling Note was $250,349.

On March 10, 2011, the Company replaced and cancelled the 2010 Sperling Note with a new note (the “2011 Sperling Note”) in the amount of $500,000 in exchange for an additional $250,000 in cash from the Sperlings. As a result of this transaction, the 2010 Sperling Note was deemed extinguished. The 2011 Sperling Note bears interest at 3% per year and is payable in full, with interest, on March 10, 2013.

On August 12, 2011, the Company and the Sperlings entered into a settlement and release agreement pursuant to which the Company issued, on September 30, 2011, to the Sperlings two million five hundred thousand (2,500,000) restricted shares of its common stock in exchange for settlement in full of the 2011 Sperling Note which, with accrued but unpaid interest, amounted to an aggregate of $510,490 as of the settlement date. As a result of this settlement, at December 31, 2011, there was no outstanding balance on the Sperling Note.

On December 16, 2010, the Sperlings made a short term loan to the Company of $75,000. This loan was made pursuant to an oral agreement, bore no interest and was repaid in full prior to the end of 2011.

During the year ended December 31, 2010, the Company obtained short-term unsecured promissory notes from four shareholders. The unsecured advances do not accrue interest. At December 31, 2010, the outstanding principal on these promissory notes was $516,990. During the year ended December 31, 2011, the Company obtained short-term unsecured advances from five shareholders. At December 31, 2011, the outstanding principal on these advances was $536,990.

Note payable - Abundance Partners LLC

As a result of the August 18, 2010 acquisition of Syncpointe LLC, the Company entered into an agreement effective November 4, 2010 with Abundance Partners LP (“Abundance”) and Syncpointe relating to the $80,000 principal balance on a secured $100,000 loan, bearing interest at 6% per annum, that Abundance made to Syncpointe LLC on June 3, 2010 (the “Abundance Loan”). Pursuant to the terms of this agreement, the Company issued to Abundance 25,000 shares of its unregistered common stock in lieu of an equity interest in Syncpointe and paid a $25,000 default fee due under the Abundance Loan which went into default on July 3, 2010. Additionally, Syncpointe agreed to apply 15% of the cash proceeds to Syncpointe or the Company from any loan or sale of equity towards paying down the balance of the loan plus accrued but unpaid interest (the “Required Payments”), and agreed to pay off the balance of the Abundance Loan, plus interest, on or before March 31, 2011 (the “Maturity Date”). Abundance agreed to reduce the 18% default interest rate to 12%, retroactive to July 3, 2010, and the parties further agreed that if the Abundance Loan went into default again, the interest rate would increase to 18%, retroactive to July 3, 2010. The Company agreed that its Collateral (as that term is defined in the original Abundance Loan agreement) would be included with the Syncpointe Collateral as part of the security interest under that agreement and that such security interest would be subordinated to the first priority interest granted under the 2010 Secured Gilder Note. Because the Required Payments were not made and the Abundance Loan was not repaid in full by the Maturity date, the Abundance Loan is currently in default.

On August 19, 2011, Abundance Partners LP (“APL”) filed a complaint against the Company and its wholly owned subsidiary, Syncpointe, Inc., in the United States District Court, Southern District of New York (the “Court”). APL’s complaint alleged, among other things, that the Company and Syncpointe failed to comply with the terms of, and were in default under, a certain loan and security agreement with APL, as amended, because the Company failed to pay APL certain amounts allegedly due under the loan agreement. APL sought a judgment against the Company and Syncpointe, jointly and severally, in an amount estimated by APL to be at least $99,883.99. On January 23, 2012, the Company and APL settled this matter and it was dismissed with prejudice by the Court on February 14, 2012. Pursuant to the settlement agreement the Company issued to APL 200,000 shares of its common stock.

Other Notes Obligations

The Dell Financial note is related to a disputed computer purchase in 2007. The note bears interest at 24.49% per year.

The American Honda Finance Corporation note is related to an automobile purchase in 2008 and is repayable in 60 equal monthly payments through June 2013, is secured by the automobile, and bears interest at 9.45% per year. The note balance was paid off on October 1, 2011.

The AFS/IBEX (formally Total Bank) note is associated with an insurance policy, is repayable in equal monthly payments of $1,741 through June 2012, is unsecured, and bears interest at 8.5% per year.