4. Lines of Credit

12 Months Ended

Dec. 31, 2011

4. Lines of Credit

The Company has two lines of credit as follows:

Creditor	Interest Rate	Borrowing Limit	Repayment Terms	Amount Outstanding	Accrued Interest	Total	Security	Purpose
Chairman	1% per Month	$2,500,000	Due on Demand	$ 953,061	$ 50,218	$ 1,003,279	General Security over Assets	Sales and Marketing Program
Wife of Chairman	1% per Month	$2,000,000	Due on Demand	$1,610,930	$ 197,957	$ 1,808,887	General Security over Assets	Operations, Product Development
Total				$ 2,563,991	$ 248,175	$ 2,812,166

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 year ended December 31, 2011, the Company has borrowed $953,061 for its sales and marketing program and incurred interest of $50,218.

On May 25 2010, the Company finalized negotiations with the wife 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 year ended December 31, 2011, the Company borrowed a total of $765,366 from this creditor and incurred interest expense of $154,349 to bring the total amounts borrowed to date to $1,610,930 and accrued interest to $197,955 (2010: $845,565 and $43,606).

As consideration for the two lines of credit, the Company has granted 60,000,000 options (note 5(c)).