Note 8. Subsequent Events.
On October 29, 2012, the Company borrowed $100,000 from an individual investor pursuant to a secured promissory note. The note matures on December 26, 2012, and is secured by a subordinated security interest in all Company assets. In lieu of interest or any other consideration, the Company issued 20,000 shares of its common stock to the lender. The $10,000 value of the shares was recorded as original issue discount and will be amortized as interest expense over the term of the note.
On November 12, 2012, the Company and Artann amended their Development and Commercialization Agreement (see Note 7). Under the terms of the amendment, the amounts due on October 27, 2012 will be due on November 27, 2012. The Company agreed to pay simple interest on the amount due at a rate of 20% per year.