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GAIN ON FORGIVENESS OF LIABILITIES
6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
GAIN ON FORGIVENESS OF LIABILITIES

 

NOTE 8. GAIN ON FORGIVENESS OF LIABILITIES

 

On October 2, 2008, the Company entered into a payment agreement with a vendor, settling a balance of $52,598. It was agreed between the Company and the vendor that 50% of the amount owed, or $26,299 would be forgiven and the remainder would be paid in two installments, which were, 50%, or $13,150, upon execution of the payment agreement and $13,149 upon an infusion of capital into the Company. Since the inception of the payment agreement, the amount to be forgiven, $26,299, continued to be recorded as an accounts payable up until the infusion of $1 million from the issuance of the senior convertible promissory note (the “Note”) in April 2010 (see Note 5). When the Note was issued, the final installment payment of $13,149 was paid and the $26,299 was recognized as a gain by the Company.