Related Party Transactions

6 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

Note 5: Related Party Transactions

Shareholders of the Company made advances of $25,570 during the six months ended June 30, 2013 for working capital purposes. The advances are due on demand, non-interest bearing, and classified within related party advances in the accompanying condensed consolidated balance sheet as of June 30, 2013.

The Company paid consulting fees to certain shareholders and directors of the Company that amounted to $72,500 and $142,500 for the three and six months ended June 30, 2013, respectively, and $126,317 and $186,230 for the three and six months ended June 30, 2012, respectively. The Company paid consulting fees to certain shareholders and directors of the Company that amounted to $804,556 for the period from inception (November 25, 2009) through June 30, 2013.

The Company incurred interest expense with related parties of $4,445 and $8,913 for the three and six months ended June 30, 2013, respectively. The Company incurred interest expense with related parties of $3,771 and $5,421 for the three and six months ended June 30, 2012, respectively. Total interest expense with related parties for the period from inception (November 25, 2009) through June 30, 2013 was $33,149. The Company has accrued interest on related party notes payable of $33,149 and $24,236 recorded within accrued liabilities in the accompanying condensed consolidated balance sheets as of June 30, 2013 and December 31, 2012, respectively.

The shareholder associated with the $2,000,000 financing agreement discussed within Note 7 overpaid the Company $16,559 when making the final payment on the stock subscription in January 2013. Additionally, this shareholder paid for $10,514 of legal expenses on behalf of the Company. The total of these two transactions, $27,073, is included within accounts payable – related party in the accompanying balance sheet as of June 30, 2013.