COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

COMMITMENTS AND CONTINGENCIES

NOTE 6 - COMMITMENTS AND CONTINGENCIES:

Commitments:

The Company has issued a promissory note ("Note") for $650,000, payable to the Borkwood Development Ltd, a previous shareholder of the Company ("Seller"), payable and amortized monthly and carrying a interest at 5% per year. The Company has the right to prepay the note at any time with a notice of 14 days. To secure the payment of principal and interest the Sellers will receive a perfect lien and security interest in the Shares in the company ANV until the note with accrued interest is paid in full., and, 2) In the case that the Note has not been repaid within 12 months from the day of closing the Sellers have the right to convert the debt to common stock of Advanced Oxygen Technologies, Inc. in an amount of non diluted shares calculated on the conversion Date, equal to the lesser of : a) Six hundred and Fifty thousand (650,000) or the Purchase Price minus the principal payments made by the buyer, which ever is greater, divided by the previous ten day closing price of AOXY as quoted on the national exchange, or b) Fifteen million shares, which ever is lesser. The Note has been extended until July 1, 2014 and interest waived through the period ending June 30, 2013.

The Company's wholly owned subsidiary Anton Nielsen Vojens, ApS has a note payable with a bank ("Note A"). The original amount of Note A was kr 750,000 Danish Krone (kr). Note A is secured by the revenues of the lease with Statoil, with a 7.00% interest rate and 5 years left on the term. The balances on the note as of March 31, 2014 and March 31, 2013 were $47,786 and $54,953 respectively and the yearly payments are fixed at kr 75,000.

The Company's wholly owned subsidiary Anton Nielsen Vojens, ApS has a note payable with a bank ("Note B"). The original amount of Note B was kr 1,132,000 Danish Krone (kr). Note B is secured by the subsidiary;s real estate, with a 2.00% interest rate and 10 years left on the term. The balance on the note as of March 31, 2013 was $188,271.