10.
LITIGATION
In 2005, an employee received a defaulted judgment against the Company concerning the case Bowers v. Friendly Energy Corporation, San Diego Superior Court Case No. 775084. The default judgment in the principle sum of $434,211.50 was reduced to a principal amount of $110,000, with interest from October 13, 2000. With accrued interest and less principal paid of $140,000, the balance at September 30, 2012 is $152,831, as reported in the liability section of the balance sheet.
In the current quarter, a private lender filed a suit against the Company concerning the case Mark Myers v. Friendly Energy Exploration in San Diego Superior Court. This case involves a loan for $238,500. The Company is seeking an extension to the time for payment.
11.
SUBSEQUENT EVENTS
In accordance with ASC 855, we have evaluated subsequent events through November 12, 2012, and did not have any material recognizable subsequent events, except for the issuance of 32,649,743 common shares on October 12, 2012 for settlement of debt and 1,964,092 common shares on October 26, 2012 for settlement of debt.
