SUBSEQUENT EVENTS | 9 Months Ended |
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Sep. 30, 2011 | |
| SUBSEQUENT EVENTS |
13. SUBSEQUENT EVENTS
The following is a summary of significant events impacting the
Company for the period from October 1, 2011, through the issuance
of these financial statements in addition to subsequent events
described in the footnotes above.
On
October 4, 2011, the Company acknowledged an agreement between
Lanktree Consulting Corporation and Southridge Partners II, LP
whereby Lanktree transferred $125,000 of principal related to the
$580,000 convertible note to Southridge for cash. After
this transfer and other Lanktree conversions of $250,000 to common
stock, the balance of the note due Lanktree is
$205,000. On October 7, 2011, Southridge converted
$25,000 of principal into 477,783 shares of common
stock. The conversion was at a rate of
$0.0523. On November 11, 2011, the Company issued
870,827 shares of common stock to Southridge for conversion of
$15,000 of principal on their outstanding note ($0.017225 per
share). On November 15, 2011, the Company issued 380,825
shares of common stock to Southridge for conversion of
$5,400 of principal ($0.01418 per share). The balance of
the note after these conversions was $79,600. On
November 11, 2011, the Company issued 221,518 shares of common
stock to Southridge to compensate them for a drop in the share
price from the time of their notice of conversion dated October 4,
2011, to the actual issue date of the shares.
On
October 11, 2011, the Company issued 265,290 shares of common stock
to Lanktree Consulting Corporation valued at $32,720 for interest
and default penalty interest accrued through October 4, 2011 on
five convertible notes.
On
October 11, 2011 the Company issued Exchange Agreements to four
private investors who in the aggregate invested
$145,000. These Exchange Agreements converted private
placements to two year convertible debentures with an interest rate
of 4% per annum paid at maturity and with a conversion price of
$0.10 per common share. The Company formally cancelled
the previously issued shares on November 12, 2011.
Effective
October 19 and 21, 2011, the Company issued 1,200,000 common shares
to two consultants valued at $85,480 based on the closing price of
the Company’s common stock on the date of
issuance.
On
October 31, 2011, the Company issued 767,544 shares of common stock
to a new investor for conversion of $17,500 of principal at an
exchange price of $0.0228 per share. The investor had
acquired $170,000 of principal from two of the Company’s
noteholders on October 26, 2011. On November 16, 2011,
the Company issued 797,448 shares of common stock to this investor
for conversion of $10,000 of principal at an exchange price of
$0.01254 per share. The balance of the new note after
these conversions was $142,500.
On November 3, 2011, the Company issued 1,000,000 shares of common
stock for legal services value at $28,100 based on the closing
trading price for the Company’s common stock on the date of
issuance.
On November 9, 2011, the Company issued 1,122,679 shares of common
stock to Mammoth Corporation at a conversion price of $0.0168 per
share for conversion of principal and interest in the amount of
$18,681. Mammoth had acquired $37,500 of principal plus
accrued interest outstanding on a portion of the 2007 subscription
agreement debentures. After this conversion, the
principal balance outstanding on the 2007 subscription agreement
debentures is $760,000.
Cash
Procedures with regard to Sales of Products Secured by the Second
Quarter 2011 Inventory Notes. Beginning on
October 20, 2011, the Company assigned certain of its accounts
receivable and instructed customers who received product secured by
the Second Quarter 2011 Inventory Notes to remit cash payments
directly to Acqua Wellington Opportunity LP
(“Acqua”). Acqua shall disburse funds
received among the noteholders on a pro rata
basis.
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