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SUBSEQUENT EVENTS | 12 Months Ended
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Dec. 31, 2012
SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS | NOTE 17 -- SUBSEQUENT EVENTS In accordance with applicable accounting standards for the disclosure of events that occur after the balance sheet date but before the financial statements are issued, all events or transactions that occurred after December 31, 2012 are outlined below: On January 15, 2013, The Company received a final judgment resolving claims against the Company in the Securities and Exchange Commission’s civil enforcement action against the Company and its former CEO, Scott Haire, based upon actions alleged to have been taken in 2009. The judgment was delivered by the United States District Court for the Southern District of Florida. Under the judgment, the Company has been permanently enjoined from violations of Section 18(a) of the Securities Act and Section 10(b) of the Securities Exchange Act involving the payment of undisclosed compensation to investment advisors, managers, trustees, or any associated person thereof or the manipulation of the price or volume of any security. The Company also paid a civil penalty in the amo unt of $20,000 under the terms of the judgment. On February 13, 2013, the Company received an additional $23,000 of financing under the May 30, 2012 Convertible Note agreement. On February 15, 2013, the board of directors approved an annual salary of $150,000 for Mr. Lutz, company CEO, effective March 1, 2013. On February 19, 2013, the Company issued two convertible promissory notes, each in the principal amount of $250,000, to Solomon Oden Howell, Jr. and the James W. Stuckert Revocable Trust, each a current shareholder of the Company. Each of the Notes carries an interest rate of 10% per annum, and all principal and accrued but unpaid interest under the Notes is due and payable upon achievement by the Company of certain revenue targets under existing international distribution agreements. Additionally, all principal and accrued but unpaid interest under the Notes may be converted, at the option of the holder, into shares of the Company’s common stock at a conversion price of $.07 per share, or into an equivalent number of shares of the Company’s Series C Preferred Stock. On February 27, 2013 the Company and Applied Nutritionals executed a letter agreement pertaining to the approximately $803,000 of past due royalties owed by the Company to Applied Nutritionals. Under the terms of the letter agreement, the Company is required to make an initial payment of $420,000 on March 25, 2013, and four subsequent monthly payments of $107,500 each on the 25th day of April, May, June and July, 2013, in consideration for which Applied Nutritionals will standstill on the past due royalties claims. The Company made the initial payment of $420,000 on February 27, 2013. On March 20, 2013, the Company made a payment in the amount of $16,000 pursuant to an Offer in Compromise accepted by the Internal Revenue Service on February 21, 2013. The Payment was made as a final settlement of the Company’s obligations in connection with delinquent payment of 2004–2005 tax liabilities. On March 25, 2013 a royalty payment in the amount of $107,500 was made to Applied Nutritionals. In the first quarter of 2013, the Company paid the remaining $35,000 due on the October 1, 2012 Promissory Note. In the first quarter of 2013, the Company paid the first three installments due, totaling $20,000, on the December 11, 2012 Promissory Note. The balance remaining due as of March 31, 2013 is $30,000. In the first quarter of 2013, the Company paid the first three installments due, totaling $35,000, on the December 7, 2012 Promissory Note. The balance remaining due as of March 31, 2013 is $40,000. In the first quarter of 2013, the Company paid a total of $15,000 to extend the due date of the June 21, 2011 Note to April 14, 2013. In January of 2013, $5,760 was received and 240,000 shares of common stock were issued in an exercise of warrants. In January of 2013, 74,993 shares of stock were issued according to the terms of the Forbearance agreement related to the June 21, 2011 Note Payable (see Note 6 "Significant Transaction - Forbearance Agreement"). In January of 2013, 400,000 shares of common stock were issued in conversion of $9,688 of the May 30, 2012 Convertible Note and 1,587,301 shares were issued in conversion of $50,000 of debentures. The Company issued an additional 500,000 shares of common stock were issued to a consultant according to the terms of the engagement agreement. In February of 2013, 400,000 shares of common stock were issued in conversion of $12,880 of the May 30, 2012 Convertible Note. The Company also issued 500,000 shares of common stock were issued to a consultant according to the terms of the engagement agreement. The Company has evaluated subsequent events from the balance sheet date through the date of this filing.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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