SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2013

NOTE 20.

SUBSEQUENT EVENTS

On July 1, 2013, the Company and Mr. Gray entered into a Modification Agreement of the June 2011 Note and the July 2011 Note for the purpose of deferring the annual payment of interest due on July 1, 2013 of $14,001 and $12,501, respectively, until such time as Mr. Gray provides written notice to us with such notice being no less than 15 days prior to the relevant payment date. Moreover, the parties agreed that no Event of Default under the June 2011 Note and the July 2011 Note occurred as a result of any failure by us to make the annual payment of interest due on July 1, 2013. Commencing on July 1, 2013, interest at the rate of 12.0% per annum will accrue on the deferred interest payments of $14,001 and $12,501, respectively, until the relevant payment date

Pursuant to the terms of a stock subscription agreement dated July 3, 2013, we issued 150,000 shares of our common stock, par value $0.001 per share, related to a payment of $87,000 for consulting services provided by Carmel Advisors, LLC. Refer to Part II, Item 2 “Unregistered Sales of Equity Securities and Use of Proceeds” herein for additional information.