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Subsequent Events
3 Months Ended
Mar. 31, 2012
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

11. Subsequent Events

 

Four M Purchasers and matching funds

 

During April and May 2012, the Company received $2.5 million related to the issuance of an 8% secured convertible note payable to Four M Purchasers. The note is payable on April 2, 2013, and is convertible at a price of $ 0.40 per share. Warrants to purchase 3,212,500 shares of common stock at an exercise price of $0.40 for five years were issued in connection with the note. The agreement provided that Four M Purchasers advanced the Company $500,000 upon executing the agreement and advanced the remaining $2 million (on a 2:1 basis) when the funds were matched by other investors (the Company received $1,142,000 from the issuance of notes payable and common stock to other investors and received the remaining $2 million from Four M Purchasers).

 

The funds matched from other investors resulted in the issuance of 8% convertible notes with an aggregate principal balance of $935,000 due in April 2013. In connection with the convertible notes, the Company also issued 4,025,000 warrants to purchase shares of common stock at an exercise price of $0.40 per share for five years. In addition, the Company issued 900,000 shares of common stock for proceeds of $207,000.

 

In connection with the execution of the $2.5 million secured convertible note payable, Four M Purchasers agreed to extend the maturity date for the $2 million note payable issued to Four M Purchasers on November 10, 2011. The $2 million note was originally due on May 10, 2012 and the extended due date is April 2, 2013. Also, the Company agreed to grant a security interest in the Company's intellectual property (all patents and licenses) to secure the repayment under the $2.5 million convertible note and the $2 million note payable.

 

Other

 

Between April and May 2012, the Company converted $507,000 of liabilities into 2,618,142 shares of common stock. Additionally, 10,368 shares of the Company’s common stock were issued in consideration of consulting services rendered in April.