13. Notes payable

6 Months Ended

Jun. 30, 2011

13. Notes payable

Notes Payable consisted of the following:

	June 30,		December 31,
	2011		2010
	(Unaudited)
To a shareholder (unsecured). Payable on demand and bears interest at 8.5%.	$	13,017	$	107,017

To non-shareholders (unsecured). Payable on demand and does not bear interest		60,000		60,000

Total (all current)	$	73,017	$	167,017

These notes have no priority or subordination features, have no restrictive covenants and contain no acceleration provisions. For the six months ended June 30, 2011 and 2010, the Company incurred interest expense on these notes payable of $19,760 and $6,246, respectively. For the three months ended June 30, 2011 and 2010, the Company incurred interest expense on these notes payable of $2,250 and $2,868, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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