| 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.
|
●
|
On January 29 and February 28, 2014, the Company entered into a Securities Purchase Agreement with various individuals pursuant to which the Company sold an aggregate of 4,875 units for a purchase price of $250.00 per unit and 1,854 units for a purchase price of $340.00 per unit, respectively, or an aggregate Purchase Price of $1,849,110. This represents the second and third tranches of a $1.5 million private placement which was subsequently increased to $3.5 million and extended to April 4, 2014. Each unit purchased in the second and third tranche (“Unit”) consists of (i) one share of a newly created series of preferred stock, designated Series K 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 500 shares of Common Stock at an exercise price equal to one hundred and twenty-five percent of the common stock equivalent price per share, with a term expiring three years from the respective closing date. |
|
●
|
In February
2014, the Company chose to pay off the April 11, 2013 and June 26, 2013 loan balances see Note 7. The holder of
the note chose to convert $37,500 of the outstanding balance to 150,000 shares of Company common stock, resulting in a cash
payment of $203,100. |
|
●
|
On February 6, 2014 the Company paid off the $75,000 balance of the promissory note, see Note 7, along with accrued interest on the note. |
|
●
|
In March
2014, a Series D warrant holder exercised warrants to purchase 450,000 shares of common stock resulting in net proceeds to
the Company of $112,500. |
|