7. Related Party Transactions

3 Months Ended

Mar. 31, 2012

7. Related Party Transactions

Related party transactions included the following:

		Three months ended March 31, 2012		Three months ended March 31, 2011
Development costs:
Consulting services rendered by an individual whom is a director and officer of the Company	$	15,000	$	15,000

Interest expense:
Promissory notes issued to relatives of Chairman		78,617		153,319
Lines of credit from Chairman and relatives of Chairman		82,142		-
Stock options granted to Chairman of the Company		231,948		-
Stock options granted to relatives of the Chairman		-		1,493,702

Selling, general and administration:
Consulting services rendered by an individual whom is a director and officer of the Company	$	47,400	$	47,400

Except as discussed in the next paragraph, all transactions with related parties were incurred in the normal course of operations and measured at the exchange amount, which is the amount of consideration established and agreed upon by the transacting parties.

Interest on promissory notes payable to related parties, management compensation and compensation paid to a relative of a director have been recorded at the exchange amount, which is the amount agreed to by the parties. Options granted to related parties have been recorded at their estimated fair value as disclosed note 3(c).