RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 6. RELATED PARTY TRANSACTIONS

 On October 12, 2009, the Company entered into a consulting agreement with Huntington Chase, Ltd., a Nevada corporation, wherein Edward W. Withrow III, Ecologic Transportation’s Chairman, owns a majority control. The consulting agreement provides for Huntington Chase, Ltd. to perform certain advisory functions, and to be paid $15,000 per month for a period of three years until October 12, 2012. A modification to the consulting agreement was made on October 12, 2012, to extend the term for an additional three years.  The total consulting fees owing under this agreement at March 31, 2013 and December 31, 2012, are $557,500 and $512,500, respectively.  Of the total consulting fees owing, $197,500 was converted to a loan payable.  The loan bears interest at a rate of seven percent (7%) per annum, and is due upon demand.  In addition, as of March 31, 2013 and December 31, 2012, respectively, $360,000 and $315,000 in consulting fees is recorded as accrued compensation.  Accrued interest at March 31, 2013 and December 31, 2012 was $40,788 and $31,932, respectively.

On November 1, 2011, the Company entered into an employment agreement with William B. Nesbitt, for his services as President and Chief Executive Officer of the Company. The initial term of the Agreement was for a period of twelve (12) months, and is automatically renewed annually unless terminated by either party. The Agreement provides for initial compensation of $10,000 per month for the first six months, increasing to $20,833 effective August 1, 2012, having reached certain goals of the Company.  In addition, the Agreement provides for expense reimbursements, an initial Stock Option grant of 1,500,000 shares of the Company’s common stock, and annual performance options. Any unpaid compensation shall be converted to a Senior Note Payable on a monthly basis, accruing interest at a rate of five percent (5%) per annum. As of March 31, 2013 and December 31, 2012, respectively, accrued compensation in the amount of $266,667 and $204,166, has been converted to a Senior Note Payable, and is included in loans to the Company.  Accrued interest at March 31, 2013 and December 31, 2012 was $7,623 and $4,849, respectively.

Related party transactions consists of the following:

	March 31, 2013		December 31, 2012
Loans to the Company	$	857,759	$	777,959
Accrued interest		90,014		71,775
Total related party loans		947,773		849,734
Accrued compensation		531,522		459,522
Reimbursable expenses		9,177		11,410
Total related party payable		540,699		470,932
Total related party transactions	$	1,488,472	$	1,320,666

As at March 31, 2013 and December 31, 2012, respectively, affiliates and related parties are due a total of $1,488,472 and $1,320,666, which is comprised of loans to the Company of $857,759 and $777,959, accrued interest of $90,014 and $71,775, accrued compensation of $531,522 and $459,522, and reimbursable expenses of $9,177 and $11,410.

The Company’s increase in loans to the Company of $79,800 is due to an increase in cash loans of $17,300, and an increase in accrued compensation converted to notes payable of $62,500.

The Company’s increase in unpaid compensation of $72,000 is due to a net increase in accrued compensation of $72,000 payable to Huntington Chase, Ltd., The Kasper Group, Ltd. and MJ Management, LLC, all related party creditors.

All outstanding related party notes bear interest at the rate of 5% and 7% per annum, and are due and payable within one (1) year of receipt of written demand by the related party creditors.

Accrued interest payable to related parties at March 31, 2013 and December 31, 2012 was $90,014 and $71,775, respectively.