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RELATED PARTY
 12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
RELATED PARTY

NOTE 7. RELATED PARTY

 

In August 2010, the Company issued to Dr. Shane 2,500,000 shares of common stock as consideration for payment of $125,000 accrued compensation. These shares were valued at $275,000 which was the quoted market value on the date of issuance. Accordingly, the Company recorded compensation expense of $150,000 in connection with this transaction.

 

In February 2011, the Company entered into a new employment agreement with its CEO that provides for a base salary of $20,000, subject to CPI adjustments, incentive performance bonuses equal to 12% of the Company's annual GAAP earnings for the years 2011 through 2015 and discretionary bonuses, as well as expense reimbursements and certain employee benefits. The agreement terminates December 31, 2015.

 

As of December 31, 2011, the Company has accrued $20,000 for unpaid wages under the employment agreement.