Note 7 - Notes Payable - Related Parties

12 Months Ended

Dec. 31, 2012

Note 7 - Notes Payable - Related Parties

NOTE 7 NOTES PAYABLE – RELATED PARTIES

The Company had outstanding balances on its notes payable – related parties of the following amounts as of December 31, 2012 and 2011:

	As of December 31,
	2012			2011

Shareholder loans, Prime plus 2.5% interest rate, due July 2012, under negotiation process	$	55,800		$	55,800
Loans from officer, 5.5% interest rate, due on demand		15,884			60,884
Loan from officer, 13.17% interest rate, due on demand		35,000			-
Loans from company owned by shareholders, 5.5% interest rate, due May 2016		42,500			42,500
Total notes payable		149,184			159,184
Less: Current portion of notes payable		(106,684	)		(116,684	)
Total long-term notes payable	$	42,500		$	42,500

In July 2009, the Company’s shareholders made several loans in totaling $275,000 to the Company to fund its operations. The shareholder loans were evidenced by promissory notes due in July 2012, with interest at the floating interest rate of Prime plus 2.5%. The interest rate will be adjusted each calendar quarter of January 1, April 1, July 1 and October 1. The loans expired in July 2012 and are currently in default. The Company recorded interest expenses of $3,209 during the year ended December 31, 2012.

In addition, the Company had outstanding balances of $50,884 due to the Company’s President as of December 31, 2012. The funds borrowed from the Company’s President were to fund the Company’s operations. There are no formal promissory notes. Rather verbal agreements between the President and the Company dictate the terms. The notes unsecured and due on demand. Accordingly, the Company recorded interest expenses of $5,815 during the year ended December 31, 2012.

The Company has a loan payable to US Green Pros, LLC, a related party to the Company, at an interest rate of 5.5% per annum and which is due in full on May 17, 2016. The balance of this loan was $42,500 as of December 31, 2012. Accordingly, the Company recorded interest expenses of $2,338 during the year ended December 31, 2012.

ORGANIC PLANT HEALTH INC. 10-K