10-Q
2011-09-30
false
VHGI HOLDINGS, INC.
0000830741
--12-31
88919076
Smaller Reporting Company
Yes
No
No
2011
Q3
0
0.001
300000
70000
70000
0.001
100000000
84776718
84776718
17739
0.001
300000
70000
70000
0.001
100000000
88919076
88919076
170604
40592
471296
379770
-57646
-4585
-138078
-90580
112958
36007
333218
289190
-363646
-316713
-931440
-1394375
-250688
-280706
-598222
-1105185
36057
19376
66772
47780
-15441
-44142
-55531
-356964
0
378323
0
401899
-386498
-82500
-406719
-82500
-34266
-82445
-72277
-141452
-400148
188612
-467755
-131237
-650836
-92094
-1065977
-1236422
0
0
0
0
0
0
0
0
-650836
-92094
-1065977
-1236422
-0.01
0.00
-0.01
-0.02
87770134
78421358
86290983
68416538
-1065977
-1236422
0
910
219189
41719
0
-378323
103237
15168
0
98945
55531
253019
0
-23576
164490
82500
23040
62800
17000
0
0
637312
-3547
31133
11500
0
-47114
-35973
-19658
-11625
68198
138058
-19333
-14733
247
-2247
9069
30767
63207
4771
-420921
-305797
0
400000
0
-21677
-1117400
-343730
1244850
-1625000
0
100000
0
-10000
-4536
-72500
-1502086
52093
-45654
0
874000
294000
-190000
-288000
1441300
727330
-138900
-682700
0
165000
0
21749
1940746
237379
17739
-16325
26343
10018
0
0
0
0
0
400000
0
398319
0
910000
0
480000
0
297111
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Basis of Presentation</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The terms “VHGI,” “we,” the “Company,” and “us” as used in this report refer to VHGI Holdings, Inc., a Delaware corporation. The accompanying unaudited condensed consolidated balance sheet as of September 30, 2011 and unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2011 and September 30, 2010 have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of VHGI, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine month period ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011 or any other period. These financial statements and notes should be read in conjunction with the financial statements for the years ended December 31, 2010 and 2009, included in the Company’s Annual Report on Form 10-K. The audited consolidated balance sheet as of December 31, 2010 has been included for comparison purposes in the accompanying balance sheet. Certain prior year amounts have been reclassified to conform to current year presentation.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Principles of Consolidation</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The accompanying consolidated financial statements include the accounts of VHGI and its wholly-owned subsidiaries: Medical Office Software, Inc. (“MOS”), a Florida corporation, VHGI Gold, LLC (“VHGI Gold”), a Nevada limited liability company, VHGI Energy, LLC (“VHGI Energy”), a Delaware limited liability company, and VHGI Coal, Inc. (“VHGI Coal”), a Delaware corporation. MOS has not been included for the period August 1, 2010 thru September 30, 2010 due to the failed sale of certain assets and liabilities of MOS on September 30, 2010 (see Note 5 – “Asset Dispositions”). All intercompany accounts and transactions have been eliminated.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Beneficial Conversion Feature of Convertible Notes Payable</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The convertible feature of certain notes payable provides for a rate of conversion that is below the market value of the Company’s common stock. Such a feature is normally characterized as a "Beneficial Conversion Feature" ("BCF"). In accordance with ASC Topic No. 470-20-25-4, the intrinsic value of the embedded beneficial conversion feature present in a convertible instrument shall be recognized separately at issuance by allocating a portion of the debt equal to the intrinsic value of that feature to additional paid in capital. When applicable, the Company records the estimated fair value of the BCF in the condensed consolidated financial statements as a discount from the face amount of the notes. Such discounts are accreted to interest expense over the term of the notes using the effective interest method.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 2 – GOING CONCERN</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The Company has current liabilities in excess of current assets and has incurred losses since inception. The Company has had limited operations and has not been able to develop an ongoing, reliable source of revenue to fund its existence. The Company’s day-to-day expenses have been covered by proceeds obtained, and services paid by, the issuance of stock and notes payable. The adverse effect on the Company’s results of operations due to its lack of capital resources can be expected to continue until such time as the Company is able to generate additional capital from other sources. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">These unaudited interim condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. The continuation of the Company as a going concern is dependent upon the success of the Company in obtaining additional funding and the success of its future operations. The Company’s ability to achieve these objectives cannot be determined at this time.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 3 – MINING LEASE RIGHTS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In November 2009, the Company entered into an agreement to assume the lease purchase option of the Treasure Gulch Gold Mine (“Gulch Mine”) lease rights situated in the Hassayampa Mining District of Arizona, approximately 10 miles south of Prescott. The assumption of the Gulch Mine lease rights has been recorded at a total of $435,000, which consists of $50,000 for the initial lease assumption, $25,000 to extend the lease through February 15, 2013 and $360,000 for the issuance of 2,000,000 shares of the Company’s common stock to the assignor of the mining lease rights in first quarter of 2010.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On June 8, 2010, the Company entered into an Asset Purchase Agreement (the “Mining Agreement”) for the purchase of a group of mining lease rights located in Northern Arizona (including Sun Gold and Gulch Mine), from Western Sierra Mining Corporation (“Western Sierra”), a Utah corporation, for a purchase price consisting of (i) 5,000,000 shares of the Company’s common stock, (ii) $60,000 in cash, and (iii) a promissory note in the principal amount of $240,000 (the “Western Sierra Note”). Furthermore, ninety (90) days following the payment of the Western Sierra Note, VHGI will issue to Western Sierra an additional 2,500,000 shares of the Company’s common stock; however, at least ten (10) days prior, either the Company may elect to pay, or Western Sierra may elect to receive, $250,000 in lieu of VHGI’s issuing Western Sierra shares of common stock. In addition, the Company will pay Western Sierra a royalty of 2% of gross sales of processed gold from the mining claims during any calendar quarter. The mining lease rights included in the asset purchase are Bueno #1, Treasure Gulch 1, Treasure Gulch 2, Sun Gold 2, Sun Gold 3, and Sun Gold 4, which are recorded with the United States Department of the Interior Bureau of Land Management – Arizona State Office.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On June 16, 2010, the 5,000,000 shares of the Company’s common stock mentioned above were issued at a closing price of $.11 per share and these shares, in addition to title of ownership for the mining lease rights, were held in escrow until payment was received by Western Sierra for the Western Sierra Note. The value of the issued shares, which were initially recorded as a deposit, has been recorded as an increase in the value of the mining lease rights in the amount of $550,000. The principal balance owed on the initial Western Sierra Note was paid in full in October 2010.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On September 8, 2010, the Company negotiated the terms for the final payment due to Western Sierra under the Mining Agreement mentioned above and a second promissory note was issued to Western Sierra by the Company in the principal amount of $240,000, which has been recorded as an increase in the value of the mining lease rights. This principal balance of the second promissory note was paid in full during the first quarter of 2011.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In addition, during the first quarter of 2011, the Sun Gold group of mines was increased from 4 claims to 28 claims for a cost of $4,536. Although these claims have no significant prior mining activity, they provide value to our existing claims by enlarging the holdings, allowing us to best utilize the resources on and around the original claims. The balance of the mining lease rights as of September 30, 2011, including these additions, is $1,529,536.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 4 – ASSET ACQUISITIONS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On June 15, 2010, the Company entered into a letter of intent to purchase for $514,000 certain oil and gas leases on 1,280 contiguous acres located in shallow waters in the Gulf of Mexico off of Jefferson County, Texas and the Company made a non-refundable deposit payment of $10,000 to the seller. In the third quarter of 2010 the Company decided not to pursue the purchase.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On March 31, 2010, the Company entered into an agreement to acquire certain pipeline assets from a chapter 7 bankruptcy proceeding for $4,500,000, which required a deposit payment of $250,000 during the auction and bidding process. In April 2010, the bankruptcy court notified the Company that they needed a higher bid and the Company decided not to bid for the assets, therefore the deposit of $250,000 was returned to the Company.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On May 27, 2011, the Company entered into a letter of intent (the “Letter of Intent”) with the sole shareholder of Lily Group Inc. (“Lily”) to purchase all of the stock of Lily, which currently owns a coal mining operation in Indiana. Though the terms of the Letter of Intent are non-binding (excluding customary standstill and confidentiality provisions), the Letter of Intent required the Company to loan Lily $500,000 pursuant to a convertible promissory note dated as of June 28, 2011 (the “Lily Note”). The Lily Note has a one-year term and accrues interests at a rate of 10% per annum. In addition, if the closing of the Lily transaction does not occur on or before June 28, 2012, all outstanding principal and accrued but unpaid interest under the Lily Note shall automatically convert into 2.5% of the fully diluted capital stock of Lily. The Company funded the principal under the Lily Note in multiple installments between July 1, 2011, and July 19, 2011. On August 31, 2011 the Company and Lily entered into an agreement to extend the Letter of Intent expiration date from September 1, 2011 to September 30, 2011. This letter of intent was replaced on October 2, 2011 by a second letter of intent.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In relation to the May 27, 2011 Letter of intent, the Company executed an additional five convertible notes receivable with Lily in the third quarter of 2011 in the total amount of $1,125,000. The notes mature one year from the date of execution and accrue interest at 10% per annum. In the event of default, the interest rate will increase to 12% per annum. If the closing of the Lily transaction does not occur on or before September 30, 2012, all outstanding principal and accrued but unpaid interest under these Lily notes shall automatically convert into a total of 5.63% of the fully diluted capital stock of Lily. As of September 30, 2011 the balance of accrued interest receivable on these notes is $7,055.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On August 15, 2011the Company (VHGI Energy) entered into an agreement with Outdoor Resources of Crossville, Tennessee to drill an initial oil well within 120 days. The well is to be located in the "Upper Cumberland Region" of north central Tennessee (Morgan, Fentress and/or Scott Counties). The plan is for a shallow drilling program with a target of the Monteagle formation (750'); traditionally Tennessee's top gas and oil producing formation. The Monteagle is the most wide spread oil and gas producing formation in the Cumberland Plateau. This is a single well "Turnkey" drilling agreement allowing VHGI Energy, LLC a 65% "Over Riding Royalty" while Outdoor Resources, Inc. and the land owners will hold the remaining interest. Outdoor Resources, Inc. will hold 100% of the "Working Interest". VHGI Energy, LLC has retained the right to acquire up to an additional four (4) wells upon completion of this initial effort. The "Turnkey" drilling costs are to be $150,000 per well. There can be no assurances as to whether or not the transactions within this agreement shall come to fruition. But if such a transaction is completed, the Company will be engaged through Outdoor Resources as the licensed operating company (in Tennessee to drill and operate oil and natural gas wells) in the oil and natural gas business in the State of Tennessee.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On October 2, 2011, the Company entered into a second letter of intent (the “Second Letter of Intent”) with Lily reiterating the Company’s plans to purchase all of the stock of Lily. The second Letter of Intent, which terminates on November 15, 2011, requires the Company to provide Lily with a line of credit for working capital. The loan will be for one year and will accrue interest at 12% per annum. If for any reason the transaction does not close, the loan will be converted into 7.5% non-diluted equity in Lily. As of the date of this filing, the Company has established a $1,500,000 line of credit and has made payments to Lily in the amount of $955,000. There can be no assurances as to whether or not the transactions contemplated by the Letter of Intent will be consummated, or, if consummated, what the definitive terms of such transactions will be. But if such a transaction is consummated, the Company will be engaged through its ownership of Lily in the coal mining business.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 5 – ASSET DISPOSITIONS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On February 1, 2010, the Company entered into a purchase agreement (the “Purchase Agreement”) with Wound Management Technologies, Inc. (“WMT”), a Texas corporation, pursuant to which WMT purchased from VHGI for a total purchase price of $500,000, consisting of $100,000 in cash and a promissory note in the principal amount of $400,000 (the “WMT Note”) -- the following:</p> <p style="MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr> <td width="48" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:0.5in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">a) </p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">VHGI’s membership interest in eHealth.</p></td></tr> <tr> <td width="48" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:0.5in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">b) </p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">VHGI interest in a $1,500,000 Senior Secured Convertible Promissory Note issued by Private Access, Inc. (the “Private Access Note”), certain agreements related thereto, and a note payable obligation of $1,000,000 (including accrued interest payable) incurred by VHGI in conjunction with the Private Access Note transaction. The accrued interest receivable amount of $151,868 on the Private Access Note was not purchased by WMT.</p></td></tr></table> <p style="MARGIN:0in 0in 0pt"><font style="DISPLAY:none"> </font></p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr> <td width="48" style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; WIDTH:0.5in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="TEXT-ALIGN:right; MARGIN:0in 0in 0pt" align="right">c) </p></td> <td style="BORDER-BOTTOM:#f0f0f0; BORDER-LEFT:#f0f0f0; PADDING-BOTTOM:0in; BACKGROUND-COLOR:transparent; PADDING-LEFT:0in; PADDING-RIGHT:0in; BORDER-TOP:#f0f0f0; BORDER-RIGHT:#f0f0f0; PADDING-TOP:0in" valign="top"> <p style="MARGIN:0in 0in 0pt">VPS intellectual property assets of the real-time prescription drug monitoring business, including its “Veriscrip” technology.</p></td></tr></table> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In addition, a royalty agreement was executed which provides for a three-year 10% royalty to be paid to VHGI on all revenues received by eHealth or any affiliate of eHealth from the sale of the VPS technology. The sale of eHealth resulted in a gain on disposition of $23,576. The balance of the WMT Note, including interest, has been paid in full as of September 30, 2011.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">Scott A. Haire, the Company's Chairman, also serves as the Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and a director of WMT. Based on shares outstanding as of the Annual Report on Form 10-K filed by WMT for the year ended December 31, 2010, Mr. Haire beneficially owns, through H.E.B., LLC (“HEB”), a Nevada limited liability company of which Mr. Haire is the managing member, 25% of the outstanding common stock of WMT.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On July 30, 2010, the Company entered into an asset purchase agreement (the “MOS Agreement”) with MOS Acquisition, LLC, a Florida limited liability company (the “Purchaser”), pursuant to which VHGI sold to Purchaser, for a total purchase price of $1,300,000, certain assets and liabilities of MOS (the “Assets”). The purchase price consisted of (i) $300,000 in cash; (ii) a secured promissory note in the principal amount of $1,000,000 (the “MOS Note”); plus (iii) a warrant with a five-year exercise period which provided the right to purchase up to 1% of the equity of the Purchaser.The MOS Note, which was secured by a security interest in the Assets, carried an interest rate of 6% per annum, and provided for an initial $100,000 payment due August 2, 2010 (the “Initial Payment”), interim payments of $300,000 (the “Interim Payments”) with the remaining principal and interest due on September 30, 2010 (the “Final Payment”). Per the terms of the MOS Note, if the Purchaser failed to make the Final Payment by September 30, 2010, ownership and title of the Purchased Assets were to immediately vest in the Company, with the holder of the MOS Note remaining entitled to exercise and enforce its rights under the MOS Note.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">By letter dated September 30, 2010, the Company informed the Purchaser that the Final Payment had not been received, and that if the Final Payment was not received by the Company on or before October 4, 2010, it would constitute an uncured default under the terms of the MOS Note. As of October 5, 2010, the Final Payment had not been received and, effective October 5, 2010, the Company has (i) taken all ownership and title to the Assets per the terms of the MOS Note, (ii) retained the $300,000 cash received and the $100,000 Initial Payment and (iii) reserved the right to exercise any and all of its other rights and remedies under the MOS Note. The total proceeds received of $400,000, less expenses associated with the sale which were not reimbursed by the Purchaser in the amount of $19,336, have been recorded as a gain on disposition in the amount of $380,664 as of December 31, 2010. The Company has recorded a bad debt allowance for the $900,000 balance due on the MOS note.</p> <p style="MARGIN:0in 0in 0pt"> </p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 6 - NOTES RECEIVABLE</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Notes Receivable</b> – <b>Related Parties</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The following is a summary of amounts due from related parties, including accrued interest separately recorded, as of September 30, 2011:</p> <p style="MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Related party</b></p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Nature of relationship</b></p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Terms of the agreement</b></p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Principal</b></p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Interest</b></p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">H.E.B., LLC, a Nevada</p> <p style="MARGIN:0in 0in 0pt"> limited liability company</p> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Scott Haire is the managing </p> <p style="MARGIN:0in 0in 0pt">member of HEB.</p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured $500,000 line of credit due on demand</p> <p style="MARGIN:0in 0in 0pt"> with interest rate of 10% per annum. Line available </p> <p style="MARGIN:0in 0in 0pt">as of September 30, 2011 is $75,464.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">$424,536</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">$40,634</p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Commercial Holding AG, LLC</p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Commercial Holding AG, LLC </p> <p style="MARGIN:0in 0in 0pt">has provided previous lines of </p> <p style="MARGIN:0in 0in 0pt">credit to affiliates of VHGI.</p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured note with interest accrued at rate of 10% </p> <p style="MARGIN:0in 0in 0pt">per annum and is due on demand.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 75,000</p> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">23,771</p> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">MAH Holding, LLC</p> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">MAH Holding, LLC has provided </p> <p style="MARGIN:0in 0in 0pt">previous lines of credit to affiliates </p> <p style="MARGIN:0in 0in 0pt">of VHGI.</p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured note with interest accrued at a rate of 10% </p> <p style="MARGIN:0in 0in 0pt">per annum and is due on demand.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">-</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 11,392</p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"><b>TOTAL</b></p></td> <td width="22%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:22%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="29%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:29%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b>$499,536</b></p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b>$75,797</b></p></td></tr></table> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Notes Receivable</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The following is a summary of amounts due from unrelated parties, including accrued interest separately recorded, as of September 30, 2011:</p> <p style="MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Notes Receivable</b></p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Terms of Agreement</b></p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Principal</b></p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Interest</b></p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Private Access Note</p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">The Company sold the 1,500,000 note receivable to WMT </p> <p style="MARGIN:0in 0in 0pt">in the asset disposition described in Note 5 “Asset Dispositions”</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> $ -</p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> $ 151,868</p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">2nd Q Lily Note, convertible</p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">One year note with interest accrued at 10% per annum, convertible </p> <p style="MARGIN:0in 0in 0pt">into 2.5% of fully diluted capital stock of Lily if acquisition described </p> <p style="MARGIN:0in 0in 0pt">in Note 4 “Asset Acquisitions” does not occur by June 28, 2012.</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 500,000</p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 12,603</p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">3rd Q Lily Notes, convertible</p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">One year notes with interest accrued at 10% per annum, convertible </p> <p style="MARGIN:0in 0in 0pt">into 5.63% of fully diluted capital stock of Lily if acquisition described </p> <p style="MARGIN:0in 0in 0pt">in Note 4 “Asset Acquisitions” does not occur by September 30, 2012.</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">1,125,000</p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 7,055</p></td></tr> <tr> <td width="24%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:24%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"><b>Total</b></p></td> <td width="36%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:36%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b>$1,625,000</b></p></td> <td width="12%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:12%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b> $ 171,526</b></p></td></tr></table>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 7- NOTES PAYABLE</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Notes Payable - Related Parties</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">Funds are advanced to the Company from various related parties including Scott A. Haire, the Company's Chairman, and entities controlled by him. Other shareholders may fund the Company as necessary to meet working capital requirements and expenses. The following is a summary of amounts due to related parties, including terms of the debt, and the interest accrued as of September 30, 2011:</p> <p style="MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Related party</b></p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Nature of relationship</b></p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Terms of the agreement</b></p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Principal</b></p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Interest</b></p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">H.E.B., LLC, a Nevada limited liability company</p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Scott Haire is the managing </p> <p style="MARGIN:0in 0in 0pt">member of HEB.</p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured, two separate $1,000,000 open </p> <p style="MARGIN:0in 0in 0pt">lines of credit, no maturity date, and interest</p> <p style="MARGIN:0in 0in 0pt"> at 10% per annum. Aggregate amount of line </p> <p style="MARGIN:0in 0in 0pt">available at September 30, 2011 is $1,582,525.</p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">$ 417,475</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">$ 266,175</p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">SWCC</p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Investor in eHealth</p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Dated 7/21/06, no stated interest rate and</p> <p style="MARGIN:0in 0in 0pt"> no maturity date.</p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 21,900</p> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">-</p> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Wound Management Technologies, Inc.</p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Scott Haire is an officer and director </p> <p style="MARGIN:0in 0in 0pt">of both WMT and VHGI.</p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured note with interest accrued at a rate </p> <p style="MARGIN:0in 0in 0pt">of 10% per annum with no maturity date.</p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">45,664</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">4,418</p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Commercial Holding AG, LLC</p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Commercial Holding AG, LLC has </p> <p style="MARGIN:0in 0in 0pt">provided previous lines of credit </p> <p style="MARGIN:0in 0in 0pt">to affiliates of VHGI.</p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured note with interest accrued at a </p> <p style="MARGIN:0in 0in 0pt">rate of 10% per annum with no maturity date</p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">142,600</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right">98,006</p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">MAH Holdings, LLC</p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">MAH Holdings, LLC has provided</p> <p style="MARGIN:0in 0in 0pt"> previous lines of credit to affiliates </p> <p style="MARGIN:0in 0in 0pt">of VHGI.</p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Unsecured, three separate $500,000 lines </p> <p style="MARGIN:0in 0in 0pt">of credit, no maturity date with an interest </p> <p style="MARGIN:0in 0in 0pt">rate of 10% per annum. Aggregate amount </p> <p style="MARGIN:0in 0in 0pt">of line available at September 30, 2011 is $306,575.</p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 1,193,425</p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 15,641</p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"><b>Total</b></p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b> $1,821,064</b></p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b> $384,240</b></p></td></tr> <tr> <td width="14%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:14%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="18%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:18%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="26%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:26%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="11%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:11%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="10%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:10%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr></table> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The following is a summary of amounts due to unrelated parties, including terms of the debt, and the interest accrued as of September 30, 2011:</p> <p style="MARGIN:0in 0in 0pt"> </p> <table width="100%" style="WIDTH:100%" cellpadding="0" cellspacing="0"> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Notes Payable</b></p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Terms of Agreement</b></p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Principal</b></p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Discount</b></p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:black 1.5pt solid; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:center" align="center"><b>Interest</b></p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8; BACKGROUND-COLOR:transparent" valign="bottom"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">8% Notes, Convertible</p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Four convertible notes payable with principal and accrued </p> <p style="MARGIN:0in 0in 0pt">interest at 8% per annum due nine months from date of </p> <p style="MARGIN:0in 0in 0pt">execution. The maturity dates range from January 6, 2012 </p> <p style="MARGIN:0in 0in 0pt">to June 12, 2012. Notes are convertible into common stock </p> <p style="MARGIN:0in 0in 0pt">at a 45% discount on the market price.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> $ 150,000</p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> $ 27,679</p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> $ 3,413</p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">12% Notes, Convertible</p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> Two convertible notes payable with principal and accrued </p> <p style="MARGIN:0in 0in 0pt">interest, at 12% per annum, due July 19, 2012. Notes are </p> <p style="MARGIN:0in 0in 0pt">convertible into common stock at a 50% discount on the </p> <p style="MARGIN:0in 0in 0pt">market price.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 200,000</p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 160,109</p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 4,734</p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Western Sierra Notes</p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Two notes payable issued in relation to the Mining Agreement </p> <p style="MARGIN:0in 0in 0pt">with Western Sierra Mining Corporation discussed in Note 3.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> -</p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> -</p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 10,902</p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">July 1 Notes</p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Two notes payable due September 1, 2011. Initially, a total </p> <p style="MARGIN:0in 0in 0pt">of 625,000 shares of common stock were issued to the </p> <p style="MARGIN:0in 0in 0pt">lenders in lieu of interest. The maturity dates were later </p> <p style="MARGIN:0in 0in 0pt">extended to December 31, 2011 in exchange for 256,000 </p> <p style="MARGIN:0in 0in 0pt">shares of common stock issued as extension fees.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 100,000</p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> -</p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> -</p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">July Senior Notes</p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt">Six senior promissory notes payable with two to three </p> <p style="MARGIN:0in 0in 0pt">month terms, with maturity dates ranging from September </p> <p style="MARGIN:0in 0in 0pt">2, 2011 to December 31, 2011. Proceeds are to be used to </p> <p style="MARGIN:0in 0in 0pt">consummate the transaction described in the May 27 </p> <p style="MARGIN:0in 0in 0pt">letter of intent with Lily Group, Inc. (see note 4). $81,250 </p> <p style="MARGIN:0in 0in 0pt">of the balance is currently in default.</p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> 481,250</p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> -</p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:lightcyan; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"> -</p></td></tr> <tr> <td width="17%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:17%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"><b>Total</b></p></td> <td width="37%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:37%; PADDING-TOP:0in; BORDER-BOTTOM:#ece9d8" valign="top"> <p style="MARGIN:0in 0in 0pt"> </p></td> <td width="9%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:9%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b> $ 931,250</b></p></td> <td width="8%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:8%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b>$187,788</b></p></td> <td width="7%" style="BORDER-RIGHT:#ece9d8; PADDING-RIGHT:0in; BORDER-TOP:#ece9d8; PADDING-LEFT:0in; BACKGROUND:white; PADDING-BOTTOM:0in; BORDER-LEFT:#ece9d8; WIDTH:7%; PADDING-TOP:0in; BORDER-BOTTOM:black 2.25pt double" valign="top"> <p style="MARGIN:0in 0in 0pt; TEXT-ALIGN:right" align="right"><b>$19,049</b></p></td></tr></table> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Debentures</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On December 17, 2008, the Company issued convertible debentures which were all converted into shares of the Company’s common stock as of June 30, 2010 with no remaining debenture balance as of December 31, 2010.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 8 - STOCKHOLDERS’ EQUITY</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Preferred Stock</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The Company is authorized to issue 10,000,000 shares of Preferred Stock, par value $.001 per share. The Company has designated 300,000 shares as Class B Voting Preferred Stock, and at September 30, 2011 and December 31, 2010 there were 70,000 shares outstanding. Accrued, but unpaid, dividends totaled $33,750 at September 30, 2011 and December 31, 2010. </p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Common Stock</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The Company is authorized to issue 100,000,000 common shares, par value $0.001 per share. These shares have full voting rights. At September 30, 2011, there were 88,919,076 shares issued and outstanding. At December 31, 2010, there were 84,776,718 shares issued and outstanding.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">During the first quarter of 2011, the Company issued 1,181,818 shares of common stock valued at $92,090 to an unrelated party for payment of debt and accrued interest in the amount of $52,000 and, as a result, a loss on settlement was recognized in the amount of $40,090.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">There were no stock issuances for the second quarter of 2011.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">During the third quarter of 2011, the Company issued 629,540 shares of common stock valued at $46,131 to an unrelated party for payment of debt and accrued interest in the amount of $26,000 and, as a result, a loss on settlement was recognized in the amount of $20,131. The Company issued 1,875,000 shares of common stock valued at $150,000 to unrelated parties for loan origination fees valued at $158,250 based on the market value of the common stock on the date of the agreements. At the time the stock was issued the fair market value of the Company’s stock had decreased, resulting in a gain on settlement of $8,250. The Company also recorded loan origination fees in the amount of $6,240, the fair market value of 80,000 shares of common stock that were not issued until October 2011. The Company also issued 200,000 shares of common stock valued at $17,000 to an employee as part of an employment agreement and recorded a loss on settlement of $1,000. The Company also issued 256,000 common shares valued at $25,600 to unrelated parties for extension fees valued at $23,040 and recorded a loss on settlement in the amount of $2,560.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt"><b>Warrants</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In July 2011, the Company issued 1,250,000 three-year warrants to purchase shares of common stock at an exercise price of $.08. The fair market value of the warrants, calculated using the Black Scholes model, was recorded at $71,869. As of September 30, 2011 all 1,250,000 warrants remain outstanding.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 9 - RELATED PARTY TRANSACTIONS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The Company’s corporate office is located in Fort Worth, Texas, in a space leased by HEB, LLC. The Company shares the space with the WMT corporate office and other HEB affiliated companies. The Fort Lauderdale office occupied by MOS is also leased by HEB and shared with a subsidiary of WMT. The Company reimburses HEB for the cost of both office spaces.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The Company also reimburses HEB for the cost of accounting and administrative services provided to the Company by employees of HEB. Additionally, the Company pays HEB for the actual costs of health benefits provided to Company employees through HEB.</p>
<!--egx--><p style="MARGIN:0in 0in 0pt"><b>NOTE 10 – SUBSEQUENT EVENTS</b></p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">The Company has evaluated all subsequent events from the balance sheet date through the date of this filing and with the exception of the items below there are no events to disclose.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In October of 2011, the Company issued 80,000 shares of common stock to an unrelated party for $6,240 of loan origination fees incurred in the third quarter. The Company also issued 582,472 shares of common stock to an unrelated party for payment of 8% convertible debt in the amount of $28,000.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In October of 2011, the Company executed an 8% convertible note payable with an unrelated party in the amount of $30,000. The note is due nine months from the date of execution.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In October of 2011, the Company executed notes payable in the amount of $350,000 with unrelated parties. In consideration for the notes payable the Company agreed to issue 1,700,000 shares of common stock and $32,000 of bonus payment to the lenders. The Company also issued 400,000 warrants to the lenders with an exercise price of $.15 per share. The warrants expire December 31, 2016. The notes mature between December 12 and December 24, 2011.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">In October of 2011, the Company paid $20,000 of the principal due on the July 1, 2011 notes payable to an unrelated party.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On October 2, 2011, the Company extended a $1,500,000 line of credit to Lily group according to the terms of the Second Letter of Intent (see Note 4 “Asset Acquisitions). The line of credit accrues interest at 12% per annum. As of the date of this filing the Company has funded the line of credit in the amount of $955,000.</p> <p style="MARGIN:0in 0in 0pt"> </p> <p style="MARGIN:0in 0in 0pt">On October 25, 2011 the Company made an initial payment of $25,000 to Outdoor Resources, Inc. related to the “Turnkey” drilling agreement (see Note 4 “Asset Acquisitions”).</p>
59546
55998
499536
583398
75797
62994
1625000
0
171526
151868
2449144
854258
1529536
1525000
0
11500
9620
0
1228856
1228856
5217156
3619614
0
45654
528368
460170
13919
33252
1886
1639
33750
33750
743462
110721
1821064
534375
19049
12980
384240
324308
6240
0
3551978
1556849
3551978
1556849
70
70
88919
84777
8972122
8307874
-89904
-89904
-7306029
-6240052
1665178
2062765
5217156
3619614
0000830741
2010-12-31
0000830741
2011-09-30
0000830741
2011-01-01
2011-09-30
0000830741
2011-07-01
2011-09-30
0000830741
2010-07-01
2010-09-30
0000830741
2010-01-01
2010-09-30
0000830741
2009-12-31
0000830741
2010-09-30
iso4217:USD
shares
iso4217:USD
shares