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Subsequent Events
3 Months Ended
Apr. 30, 2013
Subsequent Events [Abstract]  
Subsequent Events

Note 10 – Subsequent Events

 

Ironridge Transaction

 

On May 24, 2013, pursuant to an order setting forth a stipulated settlement (the “Order” and the “Stipulation”) issued by the Superior Court of the State of California for the County of Los Angeles – Central District (the “Court”), Ironridge Global IV, Ltd. (“Ironridge”), who had previously purchased a total of $1,278,058 in accounts payable and accrued expenses (the “Claim”) owed by us to various parties, was issued 5,000,000 shares of our common stock (the “Initial Issuance”) in satisfaction of such accounts payable and accrued expenses, which amount will come off our balance sheet and will significantly improve our liquidity. The accounts payable and accrued expenses represented amounts originally owed by us to various creditors in connection with trade payables, the purchase of property and equipment, prior credit agreements, and attorneys’ fees.

 

The shares issued in the Initial Issuance are subject to adjustment based on the closing prices of our common stock during certain calculation periods (as described in greater detail in the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 15, 2013).

 

The Stipulation provides that at no time shall shares of Common Stock be issued to Ironridge and its affiliates which would result in them owning or controlling more than 9.99% of the Company’s outstanding Common Stock. The Company also agreed pursuant to the Stipulation that (a) until at least one half of the total trading volume for the Calculation Period has traded, the Company would not, directly or indirectly, enter into or effect any split or reverse split of Common Stock; (b) until at least thirty days from the date the Order is approved, the Company would not, directly or indirectly, issue any securities pursuant to a Form S-8 registration statement; and (c) until at least six months from the date the Order is approved, the Company would not, directly or indirectly, issue or sell any free trading securities for financing purposes.

 

Issued Shares

 

In May 2013, the Company issued 30,000 shares at $0.36 per share for investor relation services rendered.

 

Retired Shares

 

In May 2013, the Company cancelled 588,235 shares of common stock as part of the Ironridge settlement of TCA discussed in Note 5.