| NOTE 7 - NOTES PAYABLE |
NOTE 7 - NOTES PAYABLE
| Notes payable consisted of the following: | |
| |
|
| | |
September 30,
2013 | |
December 31,
2012 |
| Notes payable, issued on May 6, 2011, unsecured, interest at 10% per annum, due on demand. | |
| 59,500 | | |
| 59,500 | |
| Notes payable, issued on August 25, 2010, unsecured, interest at 10% per annum due on demand. | |
| 172,500 | | |
| 172,500 | |
| Notes payable issued on May 25, 2012, secured, interest at 6%per annum, due on November 14, 2012, is in default (1) | |
| — | | |
| 50,000 | |
| Notes payable issued on January 28, 2012 to individual, unsecured, interest included, due on demand (2) | |
| — | | |
| 610,000 | |
| Notes payable issued on October 18, 2010 to individual, unsecured, interest at 15% per annum, due on demand (3) | |
| 786,300 | | |
| 786,300 | |
| | |
| | | |
| | |
| Notes payable issued on July 1, 2013 to company, unsecured, interest at 8% per annum, due on demand | |
| 24,272 | | |
| — | |
| Total notes payable | |
| 1,042,572 | | |
| 1,678,300 | |
| Less: current portion | |
| (1,042,572 | ) | |
| (1,678,300 | ) |
| Long-term notes payable | |
$ | — | | |
$ | — | |
| Maturities of notes payable are as follows: | |
| | | |
| | |
Year Ending September 30, | |
| | | |
| Amount | |
| 2014 | |
| | | |
$ | 1,042,572 | |
Total | |
| | | |
$ | 1,042,572 | |
Accrued interest on notes payable as of
September 30, 2013 was $326,031 and as of December 31, 2012 was $221,787. Interest expense of $36,060 and $107,540 has been
charged to expenses for the three and nine months ended September 30, 2013, respectively.
| 1) | This note payable was guaranteed by one of the shareholder. During
the year ended December 31, 2012 the Company also issued 25,000 shares of Common stock as a consideration for the note which was
fair valued at market rate for $62,500 and charged to expenses. The note and accrued interest were converted to stock by issuance
of 580,000 shares of common stock of the Company during the quarter ended September 30, 2013. |
| 2) | This note payable was assumed on the acquisition of AFI. The original
owner of AFI has pledge 1.2 million shares of the Company in escrow account. The note was converted to stock by issuance of 2,100,000
shares of common stock of the Company during the quarter ended September 30, 2013. |
| 3) | This Note payable was assumed on the acquisition of AFI. The Company
is negotiating a settlement agreement for $786,300, inclusive of all interest on the date of settlement. |
|