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Related Party Transactions
12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  
Note 5. Related Party Transactions

The Company has licensed its technology on an exclusive basis (“Exclusive License Agreement”) from Advanomics Corporation (“Advanomics”), a privately held Canadian company. Dr. Steve N. Slilaty, the Company’s Chief Executive Officer and a Director, is an Officer, Director and principal shareholder of Advanomics. In 2009 the Company issued an aggregate of 17,109,194 shares of its Common Stock valued at $73,000 and 850,000 shares of Series “A” Convertible Preferred Stock valued at $73,000 in exchange for this license, and has an option to purchase 2,000,000 shares of Advanomics common stock at $5 (US) per share within 1 year of September 30, 2009 as well as a second option to purchase an additional 1,000,000 shares of Licensor’s Common Stock at an exercise price of $10.00 (US) per share also for a 1 year term. The Company advanced further funds pursuant to this contract of $300,000. The total transaction costs to date of $446,000 have been written off as impaired. Pursuant to a notice of conversion filed by Advanomics on December 21, 2011, the Company issued 17,000,000 shares of Common Stock in exchange for the 850,000 shares of Preferred Stock held by Advanomics. On December 21, 2011, Advanomics and the Company executed an amendment to the Exclusive License Agreement which waives a condition of termination and revises the consideration payable to Advanomics. The original Exclusive License Agreement required the Company to exercise an option to purchase shares in Advanomics for aggregate consideration of $9,700,000.00 ($5.00 per share). This obligation was waived and replaced with an annual licensing fee of $360,000.00 and reimbursement of research and development expenses incurred by Advanomics in connection with the Licensed Material as defined in the original Exclusive License Agreement. 

 

In September 2009, the Company acquired certain assets from Sunshine Bio Investments Inc. Michele Di Turi, the Company’s Chief Operating Officer and Director, is President and Director of Sunshine Bio Investments Inc. The Company issued 1,710,748 shares of Common Stock valued at $500,000 in consideration for these assets. Goodwill was recognized on the transaction of $499,976 which has been written off.