NOTE 8 – RELATED PARTY TRANSACTIONS

Loans from Shareholders

Occasionally, officers will loan money at 6% interest rate to the Company to support working capital. As of December 31, 2012 the Company owed its CEO $5,470. During the year ended December 31, 2013 the Company repaid the loan in full. For the period end December 31, 2013 and December 31, 2012 the Company recognized $52 and $328, respectively, of interest expense on the loan. The expense was recorded as additional paid in capital.

On or about June 7, 2013, two of the three officers of the Company agreed to forgive all of their accrued compensation. As a result the Company recorded $539,000 to additional paid in capital. Additionally accrued compensation of $32,964 was forgiven by these officers as of June 30, 2013.

In April 2013, the Company issued 250,000 shares of common stock to an officer, for accrued stock compensation, as required per the terms of the officer’s employment agreement and the Board Resolution dated April 2, 2012. Fair market value for the shares was determined by taking the average share price for each cash-for-stock purchase in the applicable period of accrual. The price ranged from $0.34 to $0.50 for a total expense of $86,793.

During the fourth quarter of 2013 an officer advanced the Company $70,000, $32,500 of which was repaid as of December 31, 2013. The Company recognized $406 of interest expense on the loan. The expense was recorded as additional paid in capital.