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4. Lines of Credit
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3 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2011
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| Schedule of Line of Credit Facilities [Table Text Block] |
4. Lines
of Credit
The
Company has two lines of credit as follows:
On
March 6, 2011, the Chairman of the Company established a
line of credit of up to $2.5 million with the Company for
the exclusive purpose of funding the costs of a
comprehensive sales and marketing campaign. To date and
during the three months ended June 30, 2011, the Company
has borrowed $500,000 for its sales and marketing program
and incurred interest of $6,667.
On
May 25 2010, the Company finalized negotiations with a
relative of the Chairman for a line of credit borrowing
arrangement of $1M. All funds borrowed bear interest at 1%
per month, are due on demand and are secured by all the
assets of the Company. On January 3, 2011, the Company
entered into an agreement with this creditor to increase
the borrowing limit from$1,000,000 to $2,000,000.
During
the six months ended June 30, 2011 the Company borrowed a
total of $487,595 from this creditor and incurred interest
expense of $62,406 to bring the total amounts incurred to
date borrowings of $1,333,160 and interest of
$106,012.
As
consideration for the two lines of credit, the Company has
granted 60,000,000 options (note 5(c)).
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