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Description of Business
12 Months Ended
Dec. 31, 2012
Notes to Financial Statements  
Note 1. Description of Business

Recent Developments

 

Issuance of Additional Promissory Notes. Between August 2012 and April 2013, the Company issued promissory notes to two investors in the principal amounts of $10,000 (the “$10K Note”), $25,000 (the “$25K Note”), $15,000 (the “$15K Note”), $20,000 (the “$20K Note”) and $16,000 (the "$16K Note") (together, the “Notes”). As additional consideration for the purchase of the Notes, the Company issued: (i) 200,000 shares of its common stock, par value $0.001 per share (“Common Stock”) to the purchaser of the $25K Note and the $15K Note, (ii) 8,496 $0.50 FPMI Warrants, defined below, to the purchaser of the $10K Note, and (iii) 36,000 warrants to purchase shares of FluoroPharma Medical, Inc. (“FPMI”) common stock, for $1.00 per share (“$1.00 FPMI Warrants”), to the purchaser of the $20K Note and the $16K Note. The $1.00 FPMI Warrants expire on February 15, 2019.

 

The Notes accrue interest at the rate of 6% annually. The $10K Note and the $25K Note are currently due and payable on demand, while the $15K Note, the $20K Note and the $16K Note are due and payable on June 30, 2013 (the “Maturity Date”). The Notes are convertible at the option of each respective holder into shares of Common Stock at a conversion price equal to $0.10 per share. In addition, the holders may exchange the Notes for Common Stock in the event the Company consummates a qualified financing (the “Qualified Financing”), which is defined in the Notes as a financing resulting in gross proceeds to the Company of at least $500,000. While the Company intends to pay the Notes using proceeds from a Qualified Financing, such Qualified Financing may not occur prior to the date the holders of the $10K Note and $25K Note demand repayment, or the Maturity Date of the $15K Note, the $20K Note or the $16K Note.

The Company presently intends to issue additional Notes to finance its current working capital needs. However, there can be no assurance that the Company will be able to issue additional Notes.

 

Modification of June 2012 Notes. The Company entered into agreements with the holders of June 2012 Notes to extend the maturity date to November 15, 2012. As consideration for the extension of the maturity date, the Company assigned a total of 269,004 FPMI Warrants, which FPMI Warrants have an exercise price of $0.50 per share and expire on April 19, 2019. The June 2012 Notes are currently due and payable, on demand.

 

Overview

 

The Company has developed and ultimately intends to commercialize its innovative PAD based products for the OTC and laboratory markets based on its patented technology platforms, and its genomic diagnostics, based on its patented PadKit® technology for the worldwide healthcare industry. These platforms include: inSync®, Unique™, PadKit®, and OEM branded OTC and laboratory testing products based on the Company’s core intellectual property related to its PAD technology. These products are intended for the treatment of hemorrhoids, minor vaginal infection, urinary incontinence, general catamenial uses and other medical needs.

 

The Company’s efforts to commercialize its products are currently contingent on additional financing to execute its business and operating plan which is currently focused on the commercialization of the Company’s PAD technology either directly or though a joint venture or other relationship intended to increase shareholder value. In the interim, the Company has executed a plan to substantially reduce expenses, including headcount, and to restructure and/or eliminate many of its outstanding liabilities. This plan was necessary in order for the Company to continue as a going concern. No assurances can be given that the Company will obtain financing, or otherwise successfully develop a business and operating plan or enter into an alternative relationship to commercialize the Company’s PAD technology.

 

The Company’s current strategy is to develop a financing and operating plan to: (i) leverage its broad-based intellectual property (IP) and patent portfolio to develop new and innovative diagnostic products; (ii) commercialize existing products either directly or through joint ventures or similar relationships intended to capitalize on the Company’s PAD technology; (iii) contract manufacturing to third parties while maintaining control over the manufacturing process; and (iv) maximize the value of the Company’s investments in non-core assets. As a result of its current financial condition, however, the Company’s efforts in the short-term will be focused on obtaining financing necessary to maintain the Company as a going concern.