8) Loans Payable

9 Months Ended

Sep. 30, 2013

8) Loans Payable:

8) LOANS PAYABLE:

Loans payable consist of the following at September 30, 2013 and December 31, 2012:

			September 30, 2013			December 31, 2012

Loan payable to Louis Savaglio		$	1,000		$	1,000
Loan payable to unrelated parties			150,000			150,000
Loan payable to unrelated parties			178,660			160,000
Total		$	329,660		$	311,000

(a) In 2006, the Company borrowed the sum of $16,000 from Louis Savaglio, an independent third party. The loan is payable on demand and bears interest at the rate of 6.75% per annum. On November 30, 2009, the Company had repaid $5,000 with the issuance of 99,100 shares of common stock. On July 14, 2011 Mr. Savaglio assigned $10,000 of his debt together with accrued interest of $3,156 to four entities unrelated to the Company. Each new entity has a note for $3,289 carrying interest at 6%. Subsequently those four entities converted their loans into 13,462,000 shares of the Company’s common stock. The balance due to Mr. Savaglio as of September 30, 2013 and December 31, 2012 was $1,000.

(b) On September 15, 2011, the Company borrowed $150,000 from an unrelated third party. The loan was due on October 15, 2011 together with interest at a rate of 25% per annum. As of September 30, 2013, the accumulated interest on this loan was $56,365. The Company is not in compliance with the repayment terms of the loan as it was not repaid on its maturity date and is currently in technical default.

(c) On November 15, 2011 and June 30, 2012, the Company borrowed $50,000 and $25,000 from an unrelated third party. On August 14, 2013, the Company had repaid $4,500 with the issuance of 6,923,076 shares of common stock. The loan was due and payable upon the Company filing its Regulation D Offering with the SEC which occurred on August 1, 2011. The note accrues interest at a rate of 4.0% per annum. As of September 30, 2013, the accumulated interest on this loan was $5,155; the Company is not in compliance with the repayment terms of the loan and is currently in technical default.

(d) On September 25, 2012, September 30, 2012, and August 1, 2013. The Company borrowed $15,000, $50,000 and $25,000 In September, 2013, the Company had repaid $6,840 with the issuance of 155,000,000 shares of common stock. These notes accrue interest at a rate of 0% per annum.

(e) On July 25, 2013, the Company borrowed $25,000 from an unrelated third party. The loan was due July 26, 2014 with interest at a rate of 12% per annum. As of September 30, 2013, the accumulated interest on this loan was $750.