Commitments and Contingencies

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements

Note 10. Commitments and Contingencies

Professional Services Agreement.  On May 16, 2011, the Company entered into a consulting agreement with its financial advisor, pursuant to which the financial advisor provides certain business, corporate development, litigation support, financial and strategic consulting services to the Company for and in consideration of the payment of $12,000 per month.  Under the terms of the consulting agreement, however, amounts due thereunder not paid accrued until the Company's cash balance exceeds $1.5 million, or 24 months from the date of execution.  

On August 1, 2012, the consulting agreement was amended to extend the deferral period for accrued cash compensation from May 16, 2013 to December 31, 2013, and to require the Company to issue 100,000 shares of restricted Common Stock per month in lieu of the agreement’s previous requirement of monthly issuances of warrants to purchase Common Stock. In addition, all warrants previously issued under the consulting agreement were exchanged for shares of Common Stock at a ratio of one share for every two warrants issued under the terms of the consulting agreement, resulting in the cancellation of warrants to issue 3.0 million shares of Common Stock in exchange for a total of 1.5 million shares of restricted Common Stock.

On October 29, 2013, we entered into a new advisory agreement with our financial advisor.  Pursuant to this agreement, we agreed to pay a retainer in the amount of $100,000 and $15,000 per month beginning on November 29, 2013.  The initial term of the agreement expires on December 31, 2014.  The advisor agreed to defer the cash fees due under the new agreement until June 30, 2014.