Short Term Loans And Short Term Loans

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

Short Term Loan

NOTE 11 - SHORT TERM LOANS AND SHORT TERM LOANS

	March 31, 2013		December 31, 2012
Bridge Loan	$	2,000,000	$	2,000,000
Bridge loan payable provision		208,506		188,465
RIGHT loan		122,182		217,420
Bryan Sanders loan		30,000		30,000
Total short term loans		2,360,688		2,435,885

RIGHT loan	153,719	—
Total long term loans	153,719	—

The loans above are assumed from the acquisition of Genetic Immunity.

Bridge Loan

On August 29, 2007, the Company entered into a Bridge Loan agreement as a Senior Secured Convertible Debenture for an amount of $2,000,000. The loan providers are the followings:

Name	Bridge Amount
SBIC Investors
Trident	$	1,100,000
Non-SBIC Investors
Andy Browder		25,000
Proto Investments		250,000
Ford Sasser		25,000
Danny Vela		25,000
Steve Walton		150,000
Hilton Wilson		25,000
Will Wilson		250,000
Rodman & Renshaw		150,000
	$	2,000,000

The loan bears an annual interest rate of 12%. According to the loan agreement, the Company settles the loan principal on the earlier of August 29, 2009 or consummation of a qualifying transaction other than reverse merger effected by the Company in completion of or in connection with a Public Offering. In case of late payment, the Company is liable to pay 18% late interest fee. The accumulated interest payable, along with the late payment interest is accrued in accrued expenses (see Note 6).

As of the printing of this document, the US$1.1 million in face value of debentures was purchased by a fund operating under the SBIC, which has since been put into receivership with the U.S. SBA. The SBA is expected to execute a forbearance agreement. The remaining US$900,000.00 of face value of the debenture is held by individuals who are considering whether to sign the forbearance agreement. The debenture holders have liens on certain intellectual property of the Company. Because there is significant know how associated with the intellectual property, the involvement of the Company's management team and scientific team is necessary to commercialize the intellectual property. Most recently, the Company received written consent from the SBA to proceed with the forbearance agreement and is awaiting similar approval from the aforementioned individuals. If said individuals elect to not accept the terms of the forbearance agreement as approved by the Company and the SBA, thus keeping the Company in default on its obligations, there is the potential for litigation by the holders of the debentures. The loan is not convertible at 31 March 2013.

RIGHT Loan

On January 31, 2013, the Company entered into a modification of RIGHT loan contract. According to the modification, the total outstanding amount of 225,000 EUR is payable from September 15, 2013 in 15,000 EUR instalments. As a result of the modification 120.000 EUR is reclassified to long term liabilities.

The loan bears 3% annual interest.