In April 2012, the Company issued 150,000 shares of common
stock as repayment of loans on behalf of RBMS, valued at $30,000, $0.20, per share.
In July 2012, the Company issued an aggregate of 1,200,000
shares of common stock at $0.20, per share, for legal services.
In July and August 2012, the Company converted an aggregate
of 40 shares of Series A Preferred stock to 526,253 shares of common stock at a conversion rate of $.10, per share, including accrued
dividends, penalty and interest.
In October 2012, the Company converted 100 preferred shares
of stock to 2,780,602 shares of common stock at a conversion rate of $0.05, per share, including accrued dividends, penalty and
interest, pursuant to an agreement with the investor.
On October 15, 2012, the Company issued 500,000 shares of
common stock at $0.20, per share, for legal services pursuant to an agreement dated April 23, 2012.
In October, 2012, the Company issued an aggregate of 62,253
shares of common stock at $0.30, per share, to the investment banker in connection with financings.
On November 8, 2012, the Company issued 100,000 shares of
common stock at $0.15, per share, in settlement of accounts payable.
Convertible Note and Warrant
On May 1, 2012, the Company issued a two-year, 10% convertible
promissory note in the amount of $150,000. 121 days from the issue date, the holder can convert any unpaid principal
and accrued interest into common shares of the Company. Between 121 days and 150 days from the issue date, the conversion price
per share shall be $0.25; from 151 days to 180 days from the issue date, the conversion price shall be $0.20; anytime thereafter
the conversion price shall be $0.15, subject to adjustment as defined. . The investor also was issued a five year common stock
purchase warrant for the purchase of up to 480,000 shares of the Companys common stock, at a price per share of $0.40, that
permits a cashless exercise in the event that the underlying shares of common stock to be issued upon exercise are not registered
pursuant to an effective registration statement at the time of the exercise. The Company received net proceeds of $127,000
after payment of expenses incurred in connection with such transaction. In connection with this financing, the investment
banker received 40,000 shares of the Companys common stock.
On July 17, 2012 and October 15, 2012, the Company sold
an additional $56,000 and $41,000, respectively, of the 10% convertible promissory notes. Warrants to purchase an
aggregate of 272,530 shares of the Companys common stock were issued in conjunction with these financings. In
connection with these financings, the investment banker received 22,253 shares of the Companys common stock.
On April 16, 2012 the Company entered into a non-exclusive
agreement with an investment banker, financial advisor and consultant for a term of six months. The investment banker
is entitled to a cash placement fee of 8% of the total purchase price of the Companys securities sold, adjusted by the exercise
of any investor warrants, in connection with a placement resulting from the investment bankers introduction. In
addition, the banker shall receive common shares of the Company equal to 8% of the funds raised, as defined. If the investment
banker introduces the Company during the term to a transaction which becomes a merger, acquisition, joint venture or similar transaction,
the Company shall pay the banker a fee in combination of stock and cash that reflects the exact percentage of stock and or cash
used for the transaction, as defined.
On April 25, 2012, the Company engaged a law firm to represent
the Company in connection with a financing with an investment banker at a flat rate of $10,000, payable from the proceeds of the
closing or within 30 days from the date of closing. In addition, the firm will represent the Company for a period of
three months through the end of July 2012 in connection with legal services in exchange for 300,000 shares of the Companys
common stock, as defined.