4. Lines of Credit | 3 Months Ended | |||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||
| 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 nine months ended September 30, 2011, the
Company has borrowed $647,133 for its sales and marketing
program and incurred interest of $25,776.
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 nine months ended September 30, 2011 the Company
borrowed a total of $1,541,137 from this creditor and
incurred interest expense of $106,277 to bring the total
amounts incurred to date borrowings of $1,541,137 and
interest of $149,883.
As
consideration for the two lines of credit, the Company has
granted 60,000,000 options (note 5(c)).
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