| 6. 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 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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On April 18, 2013, we issued 200,000 shares of restricted Common Stock to a newly retained investor relations firm for payment of services until October 2013, and 100,000 shares of restricted Common Stock to a previously retained investor relations firm for payment of services until September 2013. |
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On May 20, 2013, the
Company entered into a Securities Purchase Agreement with an existing investor pursuant to which the Company sold an
aggregate of 437.5 units for a purchase price of $400.00 per unit or an aggregate Purchase Price of $175,000. This
represents the third and final tranche of a $2.0 million private placement. Each unit purchased in the private
placement (“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. |
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On April 12, 2013,
1,000,000 shares of the Company’s Common Stock was converted into 10,000 shares of Series H Convertible Preferred Stock. |
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