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SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
NOTE 11. SUBSEQUENT EVENTS

On January 12, 2012 and February 1, 2012, the Company entered into Note Purchase Agreements with a limited number of accredited investors, pursuant to which the Company issued promissory notes in the principal amount of $95,000 together with 1,054,500 shares of the Company's Common Stock. The Note Purchase Agreements are due and payable on or before the earlier to occur of March 31, 2012 or the date the Company consummates a qualified financing resulting in gross proceeds to the Company of at least $1.5 million. The Notes accrue interest at the rate of five percent (5%) per annum. Net proceeds to the Company after the deduction of selling commissions, but before expenses of the Note Offering, were approximately $72,150.

 

On January 12, 2012, the Company issued a total of 12,598,120 shares of common stock to certain of the Company’s senior management team in consideration of the forgiveness of amounts due to management aggregating $314,953.

 

On January 25, 2012, the Company issued a total of 2,333,333 shares of common stock to certain individuals associated with the Company’s for services provided.

 

On February 23, 2012, the Company issued a promissory note in the principal amount of $99,500 (“Bridge Note1”). The Bridge Note1 is due and payable on or before the earlier to occur of April 18, 2012 or termination of a pending agreement between the parties. The Bridge Note1 accrues interest at the rate of one percent (1%) per annum and is collateralized by certain assets of the Company.

 

On March 28, 2012, the Company terminated the investment banking agreement with John Thomas Financial (“JTF”) dated June 10, 2011, and releasing the Company from any further obligation to JTF under the investment banking agreement. In consideration for the termination of the investment banking agreement, and any liability thereunder, the Company agreed to issue JTF 2,000,000 shares of the Company’s common stock.

 

On March 28, 2012, the Company issued a promissory note in the principal amount of $28,600 (the “Bridge Note2”). The Bridge Note2 is due and payable from the receipts on the sales of the Company’s flagship product Bazi ® on or before the earlier to occur of April 30, 2012 or termination of a pending agreement between the parties. The Bridge Note 2 accrues interest at the rate of one percent (1%) per annum and is collateralized by certain assets of the Company. The proceeds from the issuance of the Bridge Note2 was used for general working capital.

On April 6, 2012, the Company issued a total of 9,500,000 shares of common stock to certain individuals associated with the Company in consideration of services provided.

 

On April 6, 2012, the Company issued five directors a total of 6,000,000 shares of common stock for services provided to the Company.

 

The Company has negotiated agreements with certain of its vendors to compromise their claims against the Company. Under the terms of the agreements, the vendors have agreed to accept either shares of the Company’s common stock or a reduced cash amount for monies owed to the vendor by the Company, conditioned upon the Company completing the current negotiations of a potential acquisition.

 

The Company is currently in negotiations of a potential acquisition that requires significant contingencies to be met by the Company before the acquisition can be consummated. The proposed acquisition will significantly dilute the Company’s existing shareholders. There is no guarantee that the Company will be able to meet the contingencies and consummate the acquisition.