Related Party Transactions

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

8. Related Party Transactions

On May 28, 2010 the Company entered into a short-term note payable of $175,000 with a former officer of the Company. The note has a 60 day maturity and 9% interest rate. As of March 31, 2013 and December 31, 2012 the Company has accrued $48,032 and $43,124 in interest on the note payable, respectively. The Company recorded $4,908 and $4,503 in interest expense for the three months ended March 31, 2013 and 2012, respectively. As of May 20, 2013 the note has not been repaid and is in default.

On February 16, 2011 an officer of the Company loaned the Company $100,000 bearing an interest rate of 12%. The note matured on February 16, 2012. As of March 31, 2013 and December 31, 2012 the Company has accrued $27,373 and $23,663 interest on the note payable, respectively. The Company recorded $3,708 and $3,312 in interest expense for the three months ended March 31, 2013 and 2012, respectively. As of May 20, 2013 the note has not been repaid and is in default.

On February 28, 2012 an officer of the Company loaned the Company $15,000 bearing an interest rate of 12%. The note matured on August 28, 2012. As of March 31, 2013 and December 31, 2012 the Company has accrued $2,008 and $1,513 in interest on the note payable, respectively. As of March 31, 2013 a payment of $9,000 has been made on the note with a remaining balance of $9,521 including principal and interest.

On December 31, 2012 an officer of the Company loaned the Company $15,000 and entered into a convertible promissory note with an interest rate of 12%. The note is convertible into shares of the Company's common stock at a conversion rate of 10% discount to the previous three day trading average price per share and has a maturity date of May 31, 2013. As of March 31, 2013 and December 31, 2012 the Company recorded a debt discount of $3,559 and $8,898 related to the conversion feature of the note, along with a derivative liability at inception (see Note 12: Derivative Liability), respectively. Interest expense for the amortization of the debt discounts is calculated on a straight-line basis over the five month life of the note. As of March 31, 2013 and December 31, 2012 amortization was recorded in the amount of $5,339 and $0. Also as of March 31, 2013 and December 31, 2012 the company has accrued $450 and $0 in interest expense, respectively. As of May 20, 2013 the note has not been repaid.