| 10. Subsequent Events |
We performed
a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined, except
as disclosed herein, that there were no other such events requiring recognition or disclosure in the financial statements.
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On January 4, 2013, the Company reported that it had entered into a securities purchase and exchange agreement with an investor, pursuant to which the Company agreed to exchange an aggregate of 10,000 shares of a newly created series of preferred stock, designated Series H Convertible Preferred Stock, par value $0.01 per share (the “Series H Preferred Stock”) for 1,000,000 shares of the Company’s common stock, par value $0.01 per share of Common Stock held by the investor in a non-cash transaction. the investor originally purchased the Common Stock from the Company for $0.8025 per share. The exchange ratio was 100 shares of Common Stock per share of Series H Preferred Stock at a stated conversion price of $0.8025 per share. |
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On February 6 and March 28, 2013, the Company entered into a Securities Purchase Agreement with various individuals pursuant to which the Company sold an aggregate of 4,650 units for a purchase price of $400.00 per unit or an aggregate Purchase Price of $1,859,700. This represents the first two tranches of a $2.0 million private placement Each unit purchased in the first two tranches (“Unit”) consists of (i) one share of a newly created series of preferred stock, designated Series J Convertible Preferred Stock, par value $0.01 per share convertible into 1,000 shares of the Company’s common stock, par value $0.01 per share and (ii) a warrant to purchase 1,000 shares of common stock at an exercise price equal to $0.40 per share, with a term expiring three years from the respective closing date. Of the $1,859,700 invested in the first two tranches of the subsequent Private Placement, $746,000 was received in cash and $1,113,700 was from the conversion of outstanding indebtedness and accrued board of directors’ fees. The Purchasers in the first two tranches of the Private Placement consisted of certain existing and new investors in the Company as well as all of the members of the Company’s Board of Directors. |
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On February 8, 2013, Dr. Mickey Urdea was appointed to the Company’s Board of Directors, to fill the vacancy created by the resignation of Mr. Wayne Fritzsche, a longtime Board member who resigned on Thursday, February 7, 2013 to pursue a full-time, management position with PBI. Dr. Urdea was appointed as a Class III Board member - his term of office will expire at the 2014 annual meeting of shareholders. In addition to his Board of Director’s responsibilities, Dr. Urdea will develop and lead the Company’s Scientific Advisory Board. |
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On April 10, 2013, the Company entered into a six-month, uncollateralized loan agreement (“Subsequent Note”) for a principal sum of $275,000, of which $125,000 was advanced to the Company upon closing. The Subsequent Note includes an original issue discount of 10%, and an interest rate of 12%, but no interest will be due if the Subsequent Note is repaid on or before July 9, 2013. |
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