4. Lines of Credit

6 Months Ended

Jun. 30, 2012

4. Lines of Credit

The Company has two lines of credit as follows:

Creditor	Interest Rate	Borrowing Limit	Repayment Terms	Principal Outstanding	Accrued Interest	Total	Security	Purpose
Chairman	1% per Month	$2,500,000	Due on Demand	$ 1,527,352	$ 124,103	$ 1,651,455	General Security over Assets	Sales and Marketing Program
Wife of Chairman	1% per Month	$2,000,000	Due on Demand	$ 1,814,831	$ 302,104	$ 2,116,935	General Security over Assets	Operations, Product Development
Total				$ 3,342,183	$ 426,207	$ 3,768,390

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. On October 24, 2011, the March 6, 2011 agreement was amended to allow the Company to borrow the remaining funds available for general corporate matters.

On May 25 2010, the Company finalized negotiations with a relative of the Chairman for a line of credit borrowing arrangement of $1 million. 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 million to $2 million.

As consideration for the two lines of credit, the Company has granted 75,750,000 options (note 5(c)).