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Subsequent Event
6 Months Ended
Jun. 30, 2011
Subsequent Event

 

NOTE 12 Subsequent Event

 

On August 3, 2011, the Company gave notice to call its senior convertible note with a redemption date of September 6, 2011, if not otherwise converted prior to the redemption date at the election of the holder. The note balance at the notice date was $700,394. The note holder may elect to convert the note into common stock at the conversion price of $1.50 per share prior to the redemption date. Any portion of the note not converted by the redemption date will be redeemed by the Company at 125 percent of the note balance. The note holder has the option to reduce the call amount to 4.99% of the Company’s outstanding common shares. If such election is made, the note balance subject to conversion or redemption would be reduced to $322,894 as of September 6, 2011 (determined based on shares outstanding as of August 3, 2011). The Company may initiate additional calls at 30 day intervals beginning after September 6, 2011. The notes are secured in first position by all of the Company’s assets. These security arrangements expire upon full conversion of the notes.