Item 6.
Other Information.
CTLM® DEVELOPMENT HISTORY, REGULATORY AND CLINICAL STATUS
Since inception, the entire mission of IDSI was to further develop and refine the CT Laser Mammography system which was invented in 1989 by our late co-founder, Richard J. Grable. The 1994 prototype was built on a platform using then state-of-the-art computer processors which were slow and lasers which were very sensitive to temperature changes and required frequent calibration and servicing.
In order to market and sell the CTLM® in the United States, we must obtain marketing clearance from the Food and Drug Administration. Initially, we were seeking marketing clearance through an application through Pre-Market Approval (PMA) which must be supported by extensive data, including pre-clinical and clinical trial data, as well as evidence to prove the safety and effectiveness of the device.
A PMA is the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices. Class III devices are those that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potentially unreasonable risk of illness or injury. Due to the level of risk associated with Class III devices, the FDA has determined that general and special controls alone are insufficient to assure the safety and effectiveness of Class III devices. Therefore, these devices require a PMA application in order to obtain marketing clearance.
The FDA automatically classifies new technologies in Class III when limited safety information is available and no predicate device is available. It allows for multiple clinical studies to be conducted to collect the necessary data to obtain safety and clinical information to be used for future FDA submissions. At the time that we were developing the CTLM® system and considering marketing clearance there was not enough data on laser based technologies nor were there approved other new medical devices dedicated to breast imaging other than the traditional x-ray technology. As a result, the FDA recommended that we seek a PMA application.
We received FDA approval to begin our non-pivotal clinical study in February 1999. The first CTLM® was installed at Nassau County (NY) Medical Center in July 1999 and a second CTLM® was installed at the University of Virginia Health System. We submitted the non-pivotal clinical data to the FDA in May 2001. In spite of our efforts to control operating temperatures with thermal cooling cabinets for the lasers and voltage stabilizers to control power, our engineering team led by Mr. Grable decided that they would re-design the CTLM® system into a compact, robust system using surface-mount technology for the electronics and a solid state diode laser that did not require a separate chiller to control its operating temperature. It was a case where technology had to catch up with the invention. Unfortunately, Mr. Grable passed away unexpectedly in 2001. It took several years to re-design and test but our efforts were successful and we began to collect the clinical data necessary to file the PMA application.
In May 2003, we filed a PMA application for the CTLM® to the FDA. In August 2003, we received a letter from the FDA citing deficiencies in our PMA application requiring a response to the deficiencies. We initially planned on submitting an amendment to the PMA application to resolve the deficiencies and requested an extension. In March
2004 we received an extension to respond with the amendment; however, in October 2004, we made a decision to voluntarily withdraw the original PMA application and resubmit a modified PMA in a simpler and more clinically and technically robust filing.
In November 2004, we received a letter from the FDA stating that the CTLM® study had been declared a Non-Significant Risk (NSR) study when used for our intended use.
In 2005, we initiated the PMA process by designing a new clinical study protocol and a modified intended use, which limited the participants in the study to patients with dense breast tissue. The inclusion criteria was modified because we believed that we would be more successful in proving our hypothesis of the CTLM® system's intended use and have the most success at obtaining marketing clearance from the FDA. Concurrently, we identified qualified clinical sites and retained them to proceed with our clinical study.
One of the regulatory requirements for a company (sponsor) to conduct a clinical study within a hospital or imaging center is the regulatory body's Institutional Review Board ("IRB") within each hospital or imaging center, which must approve the clinical research the sponsor is requesting. We understood the IRB approval process based on prior experience encountered with the first clinical trial. The IRBs of hospital or imaging centers do not necessarily have a set time frame for reviewing and approving proposed clinical research for a sponsor. Therefore, there is no way a sponsor can anticipate the length of time it will take each IRB to approve the clinical study. We were delayed in this process due to the time it took to obtain the necessary approvals from the IRBs since certain IRBs took longer than others to approve the clinical research.
In 2006, we made changes to bring the CTLM® system to its most current design level. We believe these changes improved the CTLM®'s image quality and reliability. Upgraded CTLM® systems were installed at our U.S. clinical sites and data collection proceeded in accordance with our clinical protocol. The data collection continued from 2006 to 2010, progressing slowly due to low patient volume pursuant to the inclusion criteria of our clinical protocol.
In our clinical trial, the physician at each hospital or imaging center who oversees the clinical study is responsible for ensuring that each patient meets the requirements of the study. However, there is no way to determine if the patient that is having her standard x-ray mammogram qualifies for the clinical study of the CTLM® system. For example, each hospital or imaging center has a variable amount of patients scheduled for their mammogram, but it is impossible to determine whether or not a particular patient would meet the inclusion criteria (requirement) of the clinical study. So if there are 13 patients scheduled for a mammogram, we may get only one, or even none that qualify for the clinical study because it is based on the specific inclusion and exclusion criteria determined in the protocol.
The inclusion and exclusion criteria can outline as little or as much as necessary to prove a study, whether it takes five criteria or 15 criteria to prove the study. In order for a patient to qualify, she must meet all the criteria. Otherwise, she cannot be examined and cannot participate as a patient. Therefore, it is impossible to determine how many patients getting their mammogram will qualify each day for the CTLM clinical study because they must meet all the inclusion and exclusion criteria of the study protocol. As a result, it has been impossible for us to anticipate how many cancer cases we will collect as the study proceeded.
In September 2008, we were advised that we did not have sufficient cancer cases to finish the clinical study required for the PMA statistical analysis to be processed by our independent biostatistician. The clinical study participants were not from a pre-selected patient population. Therefore, we did not know whether the patients had cancer or did not have cancer before they participated in the clinical study.
We announced in March 2009 that our research and development team achieved a technical breakthrough with a new reconstruction algorithm that improved the visualization of angiogenesis in the CTLM® images. Angiogenesis is the process in which new blood vessels are formed in response to a chemical signal sent out by cancerous tumors. The CTLM visualizes the blood distribution in the breast, to detect the new blood vessels (angiogenesis) required for cancerous lesions to grow. The improved algorithm enhances the images by reducing the number of artifacts
occasionally produced during an examination, thereby making diagnosis easier. We also incorporated streamlined numerical methods into the software so that the new algorithm does not require additional computing resources, allowing us to provide the improved functionality to existing customers as a software upgrade.
As of May 2009, 10 clinical sites had participated in the clinical trials and at the time we believed we had sufficient clinical data to support our PMA application. However, we did not have sufficient financing to support the clinical sites, initiate the reading phase, the statistical analysis study and the submission of the PMA application to the FDA.
Through the years, new MRI and other dedicated breast imaging systems gained FDA marketing clearance pursuant to applications under the FDA's Section 510(k) premarket notification. In the last several years, the De Novo 510(k) process became an alternate pathway for new technologies with low to moderate risk an opportunity to seek FDA marketing clearance through this simpler process. In addition, laser safety data and clinical safety and efficacy data were obtained through previous clinical trials to support an FDA application through the traditional 510(k) process. We believe our CTLM® system is of low to moderate risk due to the series of technical studies conducted as well as the series of clinical studies we were engaged in which led the FDA to determine in 2004 that our clinical studies were a Non Significant Risk (NSR) device study.
A Section 510(k) premarket notification is a premarket submission made to the FDA to demonstrate that the device to be marketed is at least as safe and effective as, that is, substantially equivalent to, a legally marketed device that is not subject to PMA. Submitters must compare their device to one or more similar legally marketed devices and make and support their substantial equivalency claims. A legally marketed device is a device that was legally marketed prior to May 28, 1976 for which a PMA is not required, or a device which has been reclassified from Class III to Class II or I, or a device which has been found to be substantially equivalent through the 510(k) process. The legally marketed device(s) to which equivalence is drawn is commonly known as the "predicate" device.
To submit a Section 510(k) premarket notification application, a company must meet the following guidelines:
To demonstrate substantial equivalence to another legally U.S. marketed device, the 510(k) applicant must demonstrate that the new device, in comparison to the predicate:
|
has the same intended use as the predicate; and
|
|
has the same technological characteristics as the predicate; or
|
|
has the same intended use as the predicate; and
|
|
has different technological characteristics when compared to the predicate, and
|
|
does not raise new questions of safety and effectiveness; and
|
|
demonstrates that the device is at least as safe and effective as the legally marketed device.
|
One possible outcome resulting from applying for a Section 510(k) premarket notification of intent to market that we believed would have been an option, was the evaluation of automatic class III designation, commonly referred to "De Novo process". The De Novo process is an alternate pathway provided by the FDA to classify certain new devices that had automatically been placed in Class III due to lack of a predicate. The De Novo classification process was created to provide a mechanism for the classification of certain lower-risk devices for which there is no predicate, but would otherwise fall into Class III. The De Novo process is most applicable when the risks of a device are well-understood and appropriate special controls can be established to mitigate those risks.
The de novo process cannot be requested until a Section 510(k) premarket notification has been submitted and the FDA responds with a determination that the device is "not substantially equivalent" (NSE) to the predicate device. The FDA then classifies the applicant devices into Class III designation. Applicants who receive a class III determination from the FDA may request an evaluation for reclassification into Class I or II.
In March 2010, we decided to focus on the possibility of obtaining FDA marketing clearance through a Section 510(k) premarket notification for our CTLM® system instead of a PMA application based on our own research of other medical imaging devices that received a Section 510(k) premarket notification, such as the Aurora MRI Breast
Imaging System (the "breast MRI"). Other sources of our research were obtained through reading medical imaging industry publications, the FDA's website, and discussions with attendees at medical imaging trade shows; specifically the Radiological Society of North America in Chicago, IL in November 2009; Arab Health Show in Dubai, UAE in January 2010, and European Congress of Radiology in Vienna, Austria in March 2010. We began the process of examining the various potential predicate devices that could be credible to support our Section 510(k) premarket notification application.
In July 2010, we made our decision to select as our predicate device the breast MRI. This decision was made as a result of our examination of comparative clinical images between CTLM® and breast MRI, which are both functional molecular imaging devices having the ability to visualize angiogenesis in the breast. We began preparing the Section 510(k) premarket notification submission and engaged the services of a FDA regulatory consultant to review our preliminary draft and then re-engaged the services of our FDA regulatory counsel to complete the Section 510(k) premarket notification application and to submit it to the FDA.
On November 22, 2010, we submitted a Section 510(k) premarket notification application to the FDA for its review. We believed that the Section 510(k) premarket notification submission was the best process to obtain U.S. marketing clearance in the least burdensome and most timely manner. FDA marketing clearance would enable us to market and sell the CTLM® system throughout the United States. Also, we believed that receipt of U.S. marketing clearance will substantially enhance our ability to sell the CTLM® in the international market.
On January 21, 2011, we received a request for additional information from the FDA regarding our Section 510(k) premarket notification application. A request for additional information is quite common during the FDA review process. Due to the extensive amount of additional information requested, we filed the response to the FDA request on July 8, 2011. Upon receipt of our response at the FDA offices, the FDA 90-day response time clock was re-activated. Consequently, we expected to get either an FDA determination on our Section 510(k) application or another request for additional information within the next 90-day time frame.
On August 2, 2011, we received official notification from the FDA that the review of our Section 510(k) premarket notification application had been completed and that the FDA determined that the device, (CTLM®), is not substantially equivalent to devices marketed in interstate commerce prior to May 28, 1976, the enactment date of the Medical Device Amendments, or to any device which has been reclassified into Class I (General Controls) or Class II (Special Controls), or to another device found to be substantially equivalent through the Section 510(k) process. This decision to deny our application was based on the fact that the FDA was not aware of a legally marketed preamendments device labeled or promoted for using "Diffuse Optical Tomography" (DOT) to image the optical attenuation properties of breast tissue in order to aid the diagnosis of cancer, other conditions, diseases, or abnormalities. Therefore, this device was classified by statute into class III (Premarket Approval), under Section 513(t) of the Federal Food, Drug, and Cosmetic Act (the "Act"). All FDA determined Class III devices must fall under Section 515(a)(2) of the Act (which) requires a class III device to have an approved application (PMA) before it can be legally marketed.
The determination by the FDA that our CTLM® imaging technology will now be recognized as a DOT device and that there are no other DOT devices known to the FDA, presents us with a unique technological opportunity. Essentially, IDSI could be the first medical imaging company to file a PMA application for a Diffuse Optical Tomography breast imaging device. Since the FDA has identified CTLM® as a class III device, a formal clinical study will be required to obtain PMA approval. While we have begun the PMA process and plan to use clinical studies previously collected, if permitted to do so by the FDA, no meaningful progress can be made in this process until we obtain the substantial financing required to cover the costs for any additional new studies that we may need; the cost of a clinical research organization (CRO) to manage the process; the cost of a biostatistician to prepare the statistical report; FDA filing fees; and other costs associated with the PMA process. We believe that we will need at least $1.2 million for this process. A timeline cannot be established until funding is secured. Once funding is secured we plan to collect any additional case studies we may need from our clinical sites. The number of additional cases needed, will be provided by our biostatistician in consultation with the FDA.
In previous filings, management had disclosed the potential to have our CTLM® device approved through the FDA "De Novo" process. This process would only become an option to us if the FDA did not approve our 510(k) premarket notification of intent to market the device. While waiting for a ruling from the FDA on our 510(k) premarket notification of intent to market the CTLM®, management continued to research the advantages and disadvantages regarding the potential option to initiate a De Novo application if the FDA determined our traditional 510(k) application to be "Not Substantially Equivalent". Our research identified several articles illustrating the potential pitfalls of going down the De Novo pathway. One such article from Medical Device Consultants (MDCI), a full service contract research organization and consulting firm that helps emerging and established firms commercialize novel and innovative medical devices, dated March 21, 2011(
included below
) best summarizes the issues that we would face if we choose the De Novo pathway.
"The De Novo process has been around since the implementation of the FDA Modernization Act of 1997 (FDAMA). The FDAMA was intended to help improve the efficiency of bringing low-risk medical devices to market, allowing for simpler reclassification of devices that were classified as Class III due to the lack of a suitable predicate. The section of the FDAMA that handled this aspect of medical device classification (Section 513(f)(2)) became known as the De Novo process.
De Novo is a two-step process that requires a company to submit a 510(k) and complete a standard review, including an analysis of the risk to the patient and operator associate with the use of the device and the substantial equivalence rationale. Once that has been accomplished, and the medical device in question has been determined to be Not Substantially Equivalent (NSE) by the FDA, the product is automatically classified as a Class III device. The manufacturer can then submit a request for evaluation of Automatic Class III designation to have the product reclassified from Class III into Class I or Class II. The FDA will review the device classification proposal and either recommend special controls to create a new Class I or II device classification or determine that the product is a Class III device. If FDA determines that the level of risk associated with the use of the device is appropriate for a Class II or Class I designation, then the product can be cleared as a 510(k) and FDA will issue a new classification regulation and product code. This also adds the device in question to the predicate pool, which in turn broadens the market for other medical device companies considering products in a similar therapeutic area. If the device is not approved through De Novo, then it must go through the standard premarket approval (PMA) process for Class III devices.
The number of FDA NSE determinations due to the lack of a suitable predicate is very low for those low risk medical devices that have the potential for reaching the market via the De Novo process. Medical device manufacturers are attracted to the cost efficiencies associated with the De Novo process when compared against the investment and post-market FDA oversight associated with a PMA. Unfortunately, the time to market for devices eligible for the De Novo process can be very long.
FDAMA calls for the FDA to review and return a decision on a De Novo reclassification submission within 60 days of receipt (the initial submission must be sent by the manufacturer within 30 days of receiving NSE notification). In practice, however, the amount of time taken to review De Novo requests by the FDA and issue the special controls guidance has risen from 62 days in 2006 to 241 days since 2007. Tacked on to the 510(k) review times, devices traveling the De Novo pathway average 482 days of review time from beginning to end.
Further compounding the delays associated with De Novo is the fact that the entire process resembles a procedural "black hole." The FDA is not required to provide any updates concerning the status of a De Novo application, nor is there any simple way for medical device manufacturers to track a De Novo submission on their own.
De Novo is rare in the realm of low-risk medical devices – a mere 54 products took this particular route between 1998 and 2009. Given the extensive delays associated with the process, MDCI advises medical
device companies to consider all other market approval pathways before deciding on to pursue a De Novo reclassification."
Prepared by Benjamin Hunting, Cindy Nolte, and Helen Mayfield
MDCI Blogging Team"
Understanding that the above statements were a fair representation of the regulatory industry's general feelings towards the FDA De Novo process, management decided to accept and heed the FDA's letter (received on August 2, 2011) detailing their decision of CTLM® being "not substantially equivalent" and furthermore, accepting their recommendation that CTLM® is a class III device that would require a PMA submission. Other considerations such as comparing time frames between De Novo and the PMA process were taken into account. The average De Novo application took 482 days to be reviewed compared to the average PMA review of 284 days. In addition, upon further review, both the De Novo and PMA process require virtually identical clinical safety and efficacy data; therefore, the PMA path was chosen. Management has identified potential FDA regulatory consultants who can guide us through the complete PMA application process and is presently in contract negotiations with several prospective consulting firms. We will not be able to engage the services of an FDA consulting firm or a biostatistician until we have a commitment for funding. There can be no assurance that we will obtain this funding.
Progress toward re-submitting a PMA application during Fiscal Year 2012 and the
ten
months of Fiscal Year 2013 was significantly delayed and then eventually halted simply due to lack of funding to hire the necessary FDA consultants required to assist in the process. Our employees had reached their level of FDA expertise related to preparing the "ground work" for a PMA application submission and could not proceed any further without the expert assistance of FDA consultants.
During the fiscal year ended June 30, 2012, there was a significant reduction in key Company staff due to employee resignations, retirement and layoffs, which reduced operating overhead until additional external funding could be secured. We will not hire replacement staff until such time as we have secured sufficient funding to complete the PMA filing with the FDA. Prior to the reduction in key staff members, an internal PMA application strategy that might allow inclusion of previously collected patient data was developed. This approach (generally referred to as a PMA Protocol) will need to be qualified by our FDA consultants prior to presenting our approach to the FDA Reviewers/Examiners. The forum for this process is generally referred to as an FDA "Pre- IDE" meeting (essentially a pre-clinical meeting) between the Company, its FDA Consultants and the FDA/PMA Examiners. During the "Pre-IDE" meeting, the Company (and its FDA Consultants) would present their approach for both data collection, patient selection and data analysis. The FDA Reviewers would provide input (critique and suggestions) to us as to what they believe an acceptable PMA protocol would require. Once agreement is reached by all parties the next logical step is to implement the protocol. .
In summary, our management team now believes that the more structured and proven PMA application approach with its semi-rigid timetable for mandatory responses would provide us with the best route to achieve marketing clearance for our innovative new imaging modality that in the future will be classified as Diffuse Optical Tomography.
The CTLM® system is a Diffuse Optical Tomography (DOT) CT-like scanner. Its energy source is a laser beam and not ionizing radiation such as is used in conventional x-ray mammography or CT scanners. The advantages of imaging without ionizing radiation may be significant in our markets. CTLM® is an emerging new imaging modality offering the potential of functional molecular imaging, which can visualize the process of angiogenesis which may be used by the radiologist to distinguish between benign and malignant tissue. X-ray mammography is a well-established method of imaging the breast but has limitations especially in dense breast cases. While x-ray mammography and ultrasound produce two dimensional images (2D) of the breast, the CTLM® produces 3D images. Ultrasound is often used as an adjunct to mammography to help differentiate tumors from cysts or to localize a biopsy site. We believe the CTLM® will be used to provide the radiologist with additional information to manage the clinical case; help diagnose breast cancer earlier; reduce diagnostic uncertainty especially in mammographically dense breast cases; and may help decrease the number of biopsies performed on benign lesions.
Because breast cancers nearly always develop in the dense tissue of the breast (not in the fatty tissue), older women who have mostly dense tissue on a mammogram are at an increased risk of breast cancer. Abnormalities in dense breasts can be more difficult to detect on a mammogram. The CTLM® technology is unique and patented. We intend to develop our technology into a family of related products. We believe these technologies and clinical benefits constitute substantial markets for our products well into the future.
While we believed the net benefits of submitting a 510(k) application outweighed those of a PMA application for the shareholders, patients and customers, the FDA determined that we must file a PMA application to obtain marketing clearance. The high costs and lengthened review period associated with a PMA application are much greater than with a 510(k) submission.
The procedural and substantive differences in the FDA marketing clearance process between a 510(k) application and a PMA application are in the costs associated with the applications and the duration of the review process. The 510(k) filing fee for small business is $2,480, and the fees of the FDA regulatory consultant assisting with the submission and pre-submission review process were approximately $55,000. The PMA filing fee for a small business is $62,000. We estimate that the fees of the FDA regulatory consultants assisting with the PMA submission and the completion of the data collection phase will be approximately $1,000,000.
In our prior SEC filings, we included disclosure regarding the estimated dates by which we believed that we would be able to file our PMA application including December 2008, March 2009, June 2009, March 2010, April 2010 and July 2010. All of these projections proved incorrect. There were many factors contributing to why we were not able to achieve our projected timelines. After each delay, we disclosed in subsequent SEC filings a new projected date based on what we believed at that point in time would be a reasonable estimate of when we would be able to file our application for FDA marketing clearance. The factors contributing to these delays include, but are not limited to, the following:
|
Designing a new clinical study protocol and a modified intended use,
|
|
Identifying qualified clinical sites and retaining them to proceed with our clinical study,
|
|
Obtaining the necessary approvals from the Institutional Review Boards ("IRB"),
|
|
Updating the CTLM® system to its most current design level,
|
|
Our research and development team finalizing the improvements regarding the reconstruction algorithm by enhancing the CTLM® images by reducing the number of artifacts which would enable the physician to interpret the images more easily,
|
|
Low patient volume following the inclusion criteria of our clinical protocol,
|
|
Lack of cancer cases required for the PMA statistical analysis, and
|
|
Lack of sufficient financing to support the clinical sites, initiate the reading phase, the statistical analysis study and the preparation and submission of the PMA application to the FDA.
|
We believed that our Private Equity Credit Agreements would provide substantially all of the financing needed by IDSI for its operations and the costs associated with the filing of our FDA application for marketing clearance. Unfortunately, the continued sale of stock through our Private Equity Credit Agreements caused dilution, a decline in the stock price, and the depletion of our available authorized shares.
There was no assurance that the Section 510(k) premarket notification would result in marketing clearance. Since we were unsuccessful in our pursuit of Section 510(k) marketing clearance, we would have to return to the PMA process, which would take substantial additional time and funding, with no assurance of success.
We are engaging the services of FDA regulatory consultants who specialize in FDA matters. If we are unable to obtain prompt FDA marketing clearance, it will have a material adverse effect on our business and financial condition and would result in postponement of the commercialization of the CTLM®.
In addition, sales of medical devices outside the U.S. may be subject to international regulatory requirements that vary from country to country. The time required to gain approval for international sales may be longer or shorter than required for FDA marketing clearance and the requirements may differ. Also, we believe that receipt of U.S. marketing clearance will substantially enhance our ability to sell the CTLM® in the international market.
Regulatory approvals, if granted, may include significant limitations on the indicated uses for which the CTLM® may be marketed. In addition, to obtain these approvals, the FDA and certain foreign regulatory authorities may impose numerous other requirements which medical device manufacturers must comply with. Product approvals could be withdrawn for failure to comply with regulatory standards or the occurrence of unforeseen problems following initial marketing.
Any products manufactured or distributed by us pursuant to FDA marketing clearance will be subject to pervasive and continuing regulation by the FDA. Labeling, advertising and promotional activities are subject to scrutiny by the FDA and, in certain instances, by the Federal Trade Commission. In addition, the marketing and use of our products may be regulated by various state agencies. The export of medical devices is also subject to regulation in certain instances. Both the FDA and the individual states may inspect the manufacturers of our products on a routine basis for compliance with current QSR regulations and other requirements.
In addition to the foregoing, we are subject to numerous federal, state, and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, and fire hazard control. There can be no assurance that we will not be required to incur significant costs to comply with such laws and regulations and that such compliance will not have a material adverse effect upon our ability to conduct business. See Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations-Cautionary Statements – Extensive Government Regulation, No Assurance of Regulatory Approvals".
The development chronology stated above details how complicated the process is to develop a brand new medical imaging technology. We believe that we have a strong patent portfolio and are the world leader in optical tomography. We have received marketing approval in China and Canada; the CE Mark for the European Union; ISO 13485:2003 registration; UL Electrical Test Certificate; and Product registrations in Brazil and Argentina. The registrations for Brazil and Argentina were not renewed in 2009 because of the costs associated with new testing requirements by UL. We have now completed the Electromagnetic Compatibility ("EMC") testing required by UL and plan to submit our renewal application for these product registrations in 2011. Worldwide, our end users have completed more than 25,000 patient scans, and we have sold 17 CTLM® systems as of the date of this report. Our decision to fund the Company primarily through the sale of equity has enabled us to reach this important milestone.
In fiscal 2010, fiscal 2011, fiscal 2012 and thus far in fiscal 2013, we have used the proceeds from short-term loans, long-term loans and proceeds from our Southridge Private Equity Credit Agreement for working capital. Going forward we intend to use the proceeds from the sale of convertible debentures, convertible preferred shares, convertible promissory notes, and/or alternative financing facilities as our sources of working capital. It is unlikely that we will be able to use our Private Equity Agreement with Southridge or any successor private equity agreements due to the high costs of preparing and filing an S-1 registration statement and the limitation on how many shares can be registered to stay within the window to be deemed a secondary offering. There can be no assurance that the equity credit financing will continue to be available on acceptable terms. Substantial additional financing will be required before and after receipt of FDA marketing clearance, assuming it is received, as to which there can be no assurance. See Item 5. "Financing/Equity Line of Credit."
Clinical Collaboration Sites Update
CTLM® Systems were installed and patients were scanned under clinical collaboration agreements at the following sites:
1)
|
Humboldt University of Berlin, Charité Hospital, Berlin, Germany
|
2)
|
The Comprehensive Cancer Centre, Gliwice, Poland
|
3)
|
Catholic University Hospital, Rome, Italy
|
4)
|
MeDoc HealthCare Center, Budapest, Hungary
|
5)
|
Tianjin Medical University's Cancer Institute and Hospital, Tianjin, China
|
Due to lack of funding, we have been unable to support these clinical sites resulting in a temporary halt to clinical research at several of these sites. We expect to resume supporting their research if and when we have funds available to allocate to this program.
We were pleased to learn in June 2012 that a clinical paper produced by Dr. J. Qi, an independent CTLM® researcher based in Tianjin Medical University Cancer Institute and Hospital Tianjin, China, is pending publication in "Clinical Imaging," a highly respected radiology journal based in New York, NY. Each article accepted for publication undergoes a through review for content and accuracy by an editorial board of Radiologists.
The paper by Dr. Qi titled, "CTLM as an adjunct to Mammography in the diagnosis of Patients with Dense Breasts", reported that when a CTLM® study was combined with a (digital) x-ray based mammogram -breast cancer detection rate otherwise medically referred to as test "sensitivity" was significantly improved from a low of 34.40% to a new high of 81.57% when dealing with Extremely Dense Breasts (ACR classification). In addition, the researchers "could distinguish malignant from benign lesions".
We are very pleased that the clinical benefits of a CTLM® breast exam have been validated by a group of independent researchers. We believe that Dr. Qi's results will be further validated upon completion of our PMA application to the FDA.
The abstract of the article can be found at www.clinicalimaging.org and searched under the title "CTLM as an adjunct to mammography in the diagnosis of patients with dense breasts".
We have temporarily discontinued discussions with other hospitals and clinics wishing to participate in our clinical collaboration program and plan to resume discussions if we secure the necessary funding to continue the program. We have been commercializing the CTLM® in many global markets and we previously announced our plans to set up this network to foster research and to promote the technology in local markets. We will continue to support similar programs outside of the United States if and when we are able to allocate funds for these programs. These investments have the potential to accelerate CTLM® market acceptance while providing valuable clinical experiences.
International Distributors - Global Commercialization
The following table details the regulatory requirement and status of each country in which we have sold or marketed the CTLM®.
Country
|
Sold
|
Marketed
|
Regulatory Requirement
|
Regulatory Status
|
United States
|
No
|
No
|
Food & Drug Administration
|
Preparing for PMA Submission
|
Argentina
|
Yes
|
Yes
|
ANVISA
|
Expired(1)
|
Australia
|
No
|
Yes
|
TGA Approval
|
Canceled, Distributor Will Re-Submit(8)
|
Austria
|
No
|
Yes
|
CE Mark
|
Approved
|
Brazil
|
No
|
Yes
|
ANVISA
|
Expired(2)
|
Canada
|
No
|
Yes
|
Health Canada Approval
|
Approved
|
China
|
Yes
|
Yes
|
SFDA Approval
|
Approved
|
Croatia
|
No
|
Yes
|
CIHI(4)
|
Not Submitted Yet
|
Colombia
|
No
|
Yes
|
Register with MOH(3)
|
Not Submitted Yet
|
Curacao
|
No
|
Yes
|
MOH
|
Submitted by distributor-No Status(14)
|
Czech Republic
|
Yes
|
Yes
|
CE Mark
|
Approved
|
Egypt
|
No
|
Yes
|
CE Mark & Egypt MOH
|
Not Submitted Yet
|
Germany
|
No
|
Yes
|
CE Mark
|
Approved
|
Hong Kong
|
No
|
Yes
|
CE/SFDA
|
Not Submitted Yet
|
Hungary
|
Yes
|
Yes
|
CE Mark
|
Approved
|
India
|
Yes
|
Yes
|
CE Mark & BIS Certification
|
Not Required(9)
|
Indonesia
|
Yes
|
Yes
|
DirJen POM
|
Pending(12)
|
Israel
|
No
|
Yes
|
Import License
|
Approved
|
Italy
|
Yes
|
Yes
|
CE Mark
|
Approved
|
Jordan
|
No
|
Yes
|
JFDA(6)
|
Not Submitted Yet
|
Kazakhstan
|
No
|
Yes
|
Registration Cert. & GOSTR Cert.
|
Not Submitted Yet
|
Kuwait
|
No
|
Yes
|
MOH
|
Approved
|
Macedonia
|
No
|
Yes
|
CE Mark
|
Not Submitted Yet
|
Malaysia
|
Yes
|
Yes
|
BPFK
|
Not Required(10)
|
Mexico
|
Yes
|
Yes
|
MOH - COFERPRIS
|
Pending(11)
|
Montenegro
|
No
|
Yes
|
MOH
|
Not Submitted Yet
|
New Zealand
|
No
|
Yes
|
CE Mark
|
Not Submitted Yet
|
Oman
|
No
|
Yes
|
MOH
|
Not Submitted Yet
|
Philippines
|
No
|
Yes
|
BHDT(7)
|
Not Submitted Yet
|
Poland
|
Yes
|
Yes
|
CE Mark
|
Approved
|
Romania
|
Yes
|
Yes
|
CE Mark
|
Approved
|
Russia
|
No
|
Yes
|
ROSZDRAVNADZOR
|
Pending(13)
|
Saudi Arabia
|
No
|
Yes
|
CE Mark & MOH
|
Not Submitted Yet
|
Serbia
|
No
|
Yes
|
CE Mark
|
Approved
|
Slovenia
|
No
|
Yes
|
CE Mark
|
Approved
|
South Africa
|
No
|
Yes
|
CE Mark & DOH(4)
|
Not Submitted Yet
|
Turkey
|
Yes
|
Yes
|
CE Mark
|
Approved
|
Ukraine
|
No
|
Yes
|
CE Mark
|
Not Submitted Yet
|
United Arab Emirates
|
Yes
|
Yes
|
UAE/MOH
|
Approved
|
Vietnam
|
No
|
Yes
|
MOH
|
Not Submitted Yet
|
(1)
Will be renewed upon appointment of new distributor.
(2)
|
Distributor will renew ANVISA.
|
(3)
|
MOH - Ministry of Health
|
(4)
|
DOH - Department of Health
|
(5)
|
CICI - The Croatian Institute for Health Insurance
|
(6)
|
JFDA – Jordan Food and Drug Administration
|
(7)
|
BHDT - Bureau of Health Devices and Technology
|
(8)
TGA had requested additional documentation of our initial approval from our former distributor, which they did not provide timely. The initial approval was canceled and our new distributor will resubmit the application.
(9)
CDSCO – Medical Device Division, Not required as this time but will be required for some classes of medical devices in 2011 or 2012.
(10)
|
BPFK – Malaysia National Pharmaceutical Control Bureau, Registration is voluntary
|
(11)
|
COFEPRIS – Mexico Ministry of Health
|
(12) DirJenPOM – We received a deposit from our distributor Jainsons Pty Ltd. and the system was installed in Jakarta, Indonesia. Our distributor is responsible for registering the CTLM® with the Indonesia Director General of Food and Drugs ("DirJen POM") who controls the registration of medical devices. Product registrations for medical devices issued from certain designated countries such as Canada can be used to support the registration in Indonesia with the DirJen POM. The CTLM® system has received international certifications and licenses from the European Union, CE mark; Canada, CMDCAS Canadian Health screening; China, SFDA; and ISO 13485 issued by UL.
(13) Our distributor, National Diagnostic Service and Management LLC (National) of Novi, Michigan, through its affiliate Phoenix Med of Moscow, Russia, has submitted an application to the Ministry of Health which is currently pending. The distributor has defaulted on its obligations stipulated in their distributor agreement and agreed to transfer the distributor agreement to their Moscow based affiliate. We are in the process of signing a new distributor agreement using the same or similar terms and conditions of the agreement with National. The new distributor would take over and continue the registration process with the Ministry of Health.
(14) Our distributor, Medical Care Systems, CA, filed an application with the Curacao Ministry of Health for a Women's Imaging Center in Curacao. The distributor defaulted on its obligations stipulated in their distributor agreement and we allowed the distributor agreement to expire.
We market our CTLM® system in the countries listed in the table above, where permitted. Product registration is not necessarily required to market our CTLM® in a particular country. Prior to processing a Purchase Order, we would contact either a regulatory service or the distributor in that particular country to determine what, if any, product registration is required.
We have never shipped nor would we ever ship a CTLM® system to any country without first obtaining the necessary regulatory approvals or product registration, if required. Any medical device that is shipped into a country without approval or registration would be quarantined in customs and the shipper would be advised that the device would be sent back to them. However, we are permitted to ship CTLM® systems for product demonstration or exhibition at trade shows without registering the product in that country.
In March 2009, we announced that we had redefined our marketing strategy and launched a new campaign focusing on the international market. Because of our disappointment with the performance of many of our previous distributors, we have terminated their distribution agreements for non-performance or allowed their agreements to expire. In April 2009, we were pleased to announce that we renewed our distribution agreement with EDO MED Sp. Z.o.o. as our exclusive distributor in Poland. EDO MED will continue to market and provide technical service support for the CTLM® throughout Poland, as well as to assist with and promote the ongoing research efforts utilizing CTLM® technology at the Comprehensive Cancer Centre in Gliwice, Poland and other institutes and research centers. As of the date of this report, EDO MED's distribution agreement has expired and we have not had negotiations to renew. The Clinical Collaboration program at the Comprehensive Cancer Centre, Maria Sklodowska-Curie Memorial Institute, in Gliwice has been temporarily discontinued due to our inability to fund the program.
In the Asia-Pacific Region, we previously announced that we contracted with BAC, Inc. to manage our representative office in Beijing, existing distributors and develop new areas. As part of our continuing cost cutting initiatives, we closed our representative office in January 2009, and in December 2008, we terminated our contract with BAC, Inc. for non-performance. In March 2009, we announced the appointment of Jainsons Pty Ltd Company as our new distributor for Australia and New Zealand. In July 2010, we announced that we installed a CTLM® system at Tata Memorial Hospital, the national cancer comprehensive cancer center in Mumbai, India. The system was placed by Anto Puthiry, Managing Director of High-Tech Healthcare Equipments Pvt. Ltd.
In September 2007, we announced the installation of a CTLM® system at the Tianjin Medical University's Cancer Institute and Hospital ("Tianjin"), the largest breast disease center in China. The hospital evaluated the CTLM® under three research protocols designed to improve current methods of addressing breast cancer imaging and treatment follow-up. We previously announced that we installed a CTLM® system at Beijing's Friendship Hospital, which enabled CTLM® clinical procedures to become listed on the Regional and subsequently the National Schedule for patient payments.
In December 2008, we announced that a recent study of the CTLM® was one of the featured scientific abstracts at the Radiological Society of North America ("RSNA") from November 30th to December 5th. Dr. Jin Qi, a radiologist at the Tianjin Medical University Cancer Institute and Hospital, Tianjin, China was selected for her clinical paper, "CTLM as an Adjunct to Mammography in the Diagnosis of Patients with Dense Breasts." Dr. Qi attended RSNA with IDSI and was present at our exhibit. Dr. Qi's clinical paper was accepted as one of the European Congress of Radiology's conference presentations in March 2009. The study demonstrated that: "when the CTLM® system was used as an adjunct to mammography in heterogeneously and extremely dense breasts, the sensitivity (detecting cancer) increased significantly."
We previously signed an exclusive distributor in Malaysia, where interest in breast cancer detection and treatment was surging due to publicity surrounding their former First Lady, who succumbed to the disease. In September 2007, we announced the installation of a CTLM® system at the Univeriti Putra Malaysia ("UPM") in Kuala Lumpur, Malaysia. The CTLM® was installed at UPM's academic facility within the jurisdiction of the Ministry of Education and was evaluated by specialists from UPM in conjunction with specialists from Serdang Hospital in Kuala Lumpur. Following the evaluation at UPM, we appointed a new distributor, Daichi Holding Berhad ("Daichi") of Penasng, Malaysia. The CTLM® was removed from UPM academic facility at the conclusion of the evaluation period. Daichi issued a purchase order for this system and it was initially installed in August 2009 at Catherine Women's Medical Center in Petaling Jaya, Malaysia. On September 22, 2009, we announced that Daichi completed the purchase of the system with full payment. In June 2010, Daichi notified us that they were relocating the system and is now installed at the Breast Wellness (M) SDN. BHD (a public limited liability company) in Petaling Jaya, Malaysia.
Activities in Europe and the Middle East are top marketing priorities for IDSI. As a result of our participation as an exhibitor at the Arab Health Medical Conference in January 2010 in Dubai, UAE, and at the European Congress of Radiology ("ECR") in March 2010 in Vienna, Austria, we were able to meet with qualified distributors to discuss their interest in representing us in their respective territories. While attending Arab Health, we hired a Managing Director to market the CTLM® in the UAE and parts of the Middle East. We are not marketing or seeking distributors and will not market the CTLM® directly or indirectly in Iran, Sudan and/or Syria and other Middle Eastern countries that are subject to U.S. economic sanctions and export controls.
Additionally, we are negotiating with distributors in Egypt, Jordan, Saudi Arabia, India, Iraq, Lebanon, Turkey, Austria, and Belgrade. In April 2009, we signed a non-exclusive agreement with Neomedica d.o.o. Beograd to market the CTLM® system to the private and public sectors of Slovenia, Croatia, Serbia, Montenegro, and Macedonia. In October 2008, we announced that our distributor, Laszlo Meszaros of Kardia Hungary Kft. purchased the first CTLM® system for Budapest, Hungary. The CTLM® system has been installed at the new MeDoc HealthCare Center ("MDHC") located in Budapest, in collaboration with Dr. Maria Gergely, Chief Radiologist of Uzsoki Hospital.
Our distributor, The Oyamo Group ("Oyamo") placed an order for the first CTLM® system for Israel in October 2008. Oyamo obtained the import license from The Israeli Ministry of Health for the CTLM® system and the system was installed in November 2010 at Sheba Medical Center at Tel Hashomer, which is outside of Tel Aviv. Oyamo advised that the hospital was unable to conduct clinical studies due to lack of available time on the part of the principal investigator. Although Oyamo is in technical default of their distributor agreement, they are seeking a new hospital for a clinical site for the CTLM®.
In December 2008, we announced that a new study evaluating the CTLM system as an adjunct to mammography was featured in the December 2008 issue of Academic Radiology. Alexander Poellinger, M.D., a radiologist at Charite Hospital in Berlin. Germany, authored "Near-infrared Laser Computed Tomography of the Breast: A Clinical Experience" along with colleagues at Charite and IDSI's Director of Advanced Development as co-author. Their work demonstrated an increase in accuracy of diagnosing malignant and benign breast lesions in patients who were examined with mammography and CTLM adjunctively compared to mammography alone. Dr. Poellinger's clinical paper was distributed to doctors and distributors visiting our booth at the European Congress of Radiology in March 2009.
In March 2010, we exhibited our CTLM® system and clinical results at the annual European Congress of Radiology (ECR 2010) held from March 4 -8, in Vienna, Austria. ECR 2010 attracted approximately 19,000 participants worldwide. ECR is one of the largest medical meetings in Europe and the second largest radiology meeting in the world and currently has 45,000 members.
In November 2010, we exhibited our CTLM® system with our Canadian distributor, Arc Diagnostic at the Health Achieve 2010 in Toronto, Canada. This exposition provided IDSI the opportunity to introduce and showcase the CTLM® system for the first time in Canada to prestigious hospitals, decision makers and Ministry of Health and business leaders in the area.
In November 2010, we exhibited our CTLM® system at the 96th RSNA show in Chicago, IL from November 28th to December 2nd.
In December 2010, we announced that we received a deposit for two CTLM® systems from our distributor, Jainsons Pty Ltd for India and Indonesia. The first CTLM® system was installed at a private imaging center in Ahmedabad, India on December 11, 2010. Jainsons was in default of their contract obligations and their distribution agreement was terminated on March 8, 2012. Jainsons refused to make the scheduled payments for a system in India and the account has been placed with an outside collection agency.
In January 2011, we exhibited the CTLM® at the Arab Health 2011 medical conference held from January 24 – 27 at the Dubai International Convention and Exhibition Centre in Dubai, United Arab Emirates (UAE). We presented clinical images obtained from the CTLM® system, identified potential distributors for the Middle East region and obtained prospective sales leads. The Arab Health Exhibition and Congress is one of the largest and most prestigious healthcare events in the Middle East, with over 2,700 exhibitors from 141 countries and more than 65,000 medical professionals.
In February 2011, we announced that we completed installation and applications training of a CTLM® system at the Hang Lekiu Medical Center in Jakarta, Indonesia. This was the second CTLM® system installed to complete the order from our distributor, Jainsons Pty Ltd, received in December 2010. Jainsons was in default of their contract obligations and their distribution agreement was terminated on March 8, 2012. After making the August 2011 and September 2011 scheduled payments, Jainsons refused to make any of the remaining scheduled payments for a system in Indonesia. The account has been placed with an outside collection agency.
On April 26, 2011, we announced that we have signed an exclusive distribution agreement with Kepter Internacional ("Kepter") of Monterrey, Mexico to promote our CTLM® systems throughout Mexico. Kepter is headquartered in Monterrey, Mexico with operations in Central and South America. The company represents innovative technologies nationally and internationally providing solutions for various aspects of the healthcare industry and infectious
control. Kepter's strategy is to offer environmental friendly and cost effective alternatives to conventional operations in the healthcare and commercial construction industry. Currently, Kepter's representatives are working closely with the Mexican Health Ministry to gain national acceptance for the CTLM® system; however, there can be no assurance that this acceptance will be obtained. Kepter International has formed a new company named "Sistemas de Diagnostico e Imagenologia de Mexico S.A. de C.V." to market the CTLM® in Mexico. We have completed the sale and installation of a CTLM® system in Monterrey, Mexico and the distributor has advised us that they are working on the sale of a second system but no timeline has been given for this sale.
In July 2011, we announced that we signed an exclusive distribution agreement with National Diagnostic Service and Management LLC ("NDSM") of Novi, Michigan and its affiliate Phoenix Med of Moscow, Russia to promote our CTLM® systems throughout Russia. NDSM and its partners distribute medical diagnostic and medical laser equipment and service support throughout Russia. As an independent distributor with over 15 years of experience within the Russian medical market and employing only product certified engineers, NDSM and Phoenix Med have a long established reputation within the women's health medical community. NDSM has initiated the medical device registration process required to import medical equipment into Russia. The distributor has defaulted on its obligations stipulated in their distributor agreement and agreed to transfer the distributor agreement to their Moscow based affiliate We are in the process of signing a new distributor agreement their affiliate using the same terms and conditions of the agreement with National. The new distributor would take over and continue the registration process with the Ministry of Health.
On August 2011, we announced that we would be exhibiting our CTLM® at the FIME 2011 medical trade fair conference to be held on August 10th to 12th in Miami Beach, FL. Dr. Jose Cisneros, our Director of Clinical Research was invited to present, "New Imaging Modalities for Breast Cancer" featuring our CTLM® system at the FIME conference.
In October 2011, we announced that the CTLM® purchase was confirmed after a successful rigorous evaluation of our CTLM® system at the Hang Lekiu Medical Center in Jakarta, Indonesia. This positive outcome reinforces DOT as a valuable new breast imaging modality. Hang Lekiu Medical Center is a leading provider of advanced multi-disciplined medical care in a modern patient friendly environment. The evaluation was initiated February 2011 by introducing the unique clinical benefits of CTLM® to Indonesia's Health Minister Endang Rahayu Sedyaningsih, local officials and key news organizations.
In November 2011, we announced that our exclusive distributor for Mexico, Kepter Internacional ("Kepter"), placed an order for five CTLM® systems with one system to be delivered and installed the third week of December 2011. In connection with the first system, Kepter paid a $45,000 deposit. Kepter advised us that they were unable to accept delivery in December so we shipped the system in January 2012. In August 2012, the CTLM® was installed at the Centro Medico Ave in Monterrey, Mexico. On September 12, 2012, Linda Grable Chairman/CEO and Deborah O'Brien, Senior Vice-President attended the official inauguration of the CTLM® installation at the Centro Medico Ave. The event was attended by the medical community, government officials and local community leaders. IDSI's exclusive distributor in Mexico, Kepter, has created a new company, "Sistemas de Diagnostico e Imagenologia de Mexico S.A. de C.V.", committed to establishing other CTLM® sites throughout Mexico. A video of the event can be viewed at
http://vimeo.com/49416717
.
In November 2011, we announced that we would be exhibiting our CTLM® at the 97th annual Radiological Society of North America (RSNA) Scientific Assembly meeting in Chicago, IL from November 27th to December 2nd. This meeting gave us the opportunity to present the CTLM® system which has been recently recognized as Diffuse Optical Tomography (DOT) to the national and international markets.
In December 2011, we announced that we signed an exclusive distribution agreement with ID Matrix Systems to market and sell our CTLM® systems to private and government hospitals and private imaging centers throughout China and Hong Kong. The agreement stipulates that ID Matrix must purchase a minimum of 15 CTLM® systems within the first year of the contract along with a 50% deposit with each order to remain our exclusive distributor for the territories. ID Matrix is in technical default of its distributor agreement.
In December 2011, we received an order for one CTLM® system with a deposit of $50,000 from our exclusive distributor, ID Matrix, which was initially scheduled to ship to China during the first week of January 2012. The distributor was not ready to take delivery so we will wait for their instructions for delivery. As of the date of this report we have not received any indication from the distributor that their customer is ready to receive and install the CTLM® system in their territory. We have no timeframe for delivery or if this sale will ever be completed.
In January 2012, we exhibited the CTLM® at the 37th annual Arab Health 2012 medical conference held from January 23 – 26 at the Dubai International Convention and Exhibition Centre in Dubai, United Arab Emirates (UAE). This meeting gave us the opportunity to present the CTLM® system which has been recently recognized as Diffuse Optical Tomography (DOT) to the Middle East markets. We presented clinical images obtained from the CTLM® system, identified potential distributors for the Middle East region and obtained prospective sales leads. The Arab Health Exhibition and Congress is the largest and most prestigious healthcare event in the Middle East, with over 3,000 exhibitors from 100 countries and more than 70,000 medical professionals.
In February 2012, we issued a press release titled, "Imaging Diagnostic Remains Committed to "DOT" & Shareholders" in which Linda Grable, Chairman and CEO of IDSI commented that: "After years of developing a truly unique and non-invasive breast imaging technology, we are pleased to be recognized as 'Diffuse Optical Tomography.' In addition, as possibly the first DOT breast imaging modality to seek FDA approval, we are completely dedicated to meeting all of the FDA requirements as quickly as possible. Dr. S. Ponder, Director of Advanced Development for IDSI states that: "We continue to be encouraged by our clinical study results. Especially, when dealing with heterogeneous and extremely dense breasts. We have been able to demonstrate that CTLM® increases detection sensitivity especially in Extremely Dense Breast (BIRADS classification), when compared to x-ray based mammography."
On May 14, 2012, we signed a distribution agreement with Shimadzu Medical to market the CTLM® in Australia, New Zealand and the Pacific Islands. Shimadzu Medical Systems (Oceania) Pty Ltd is an Australasian subsidiary of Shimadzu Corporation, Kyoto, Japan. Shimadzu is working towards resubmitting the required information for Therapeutic Goods Administration (TGA). TGA is Australia's regulatory agency for medical drugs and devices.
In May 2012, we announced the signing of a distribution agreement with Mareen Group Co., to market and sell its Computed Tomography Laser Mammography (CTLM(R)) System in Kuwait. Mareen Group Co., is a Medical & Pharmaceutical distribution company well established and based in Kuwait. They have been in operation since 1998, proudly providing various medical and healthcare institutions within Kuwait and the surrounding areas with advanced medical equipment and pharmaceuticals from across the globe. The philosophy of Mareen Group has always been to build close ties with their customers by supporting their every need with prompt professional service and support.
In July 2012, we announced the signing of a distribution agreement with Mareen Group Co., to market and sell its Computed Tomography Laser Mammography (CTLM®) System in Jordan.
In September 2012, we announced the installation of the first CTLM® system in Monterrey, Mexico at Centro Medico Ave through our exclusive distributor Sistemas de Diagnostico e Imagenologia de Mexico S.A. de C.V.
Centro Medico Ave is a comprehensive state of the art medical center that offers first class facilities along with the finest and most distinguished physicians who are dedicated to diagnosing, treating and rehabilitating health. Its ongoing objective is to achieve excellence in every aspect of patient care.
In November 2012, we announced that we shipped a CTLM® system to the Euromedica Hospital in Baia Mare, Romania. This exciting event was possible through the joint efforts of the exclusive CTLM® distributor for Romania, Lebada USA, Inc. and the Romanian American Board of Trade. Euromedica Hospital, the first Romanian private Hospital accredited by CoNAS, the National Hospital Accreditation Committee, provides a wide range of care from outpatient medical consultations, laboratory tests, clinical investigations, hospitalization, surgery and post-surgery hospitalization. The hospital is equipped with the latest technical equipment for examinations and treatments.
Ovidius T. Lebada, CEO of Lebada USA, Inc., states, "The recent shipment to Euromedica Hospital is just one of several CTLM® systems planned for the Romanian market.
In December 2012, we announced that Clinical Imaging, a leading US based radiologist peer review journal, has reviewed and accepted a paper that evaluates the results of CTLM® and mammography when imaging dense breasts. Clinical Imaging provides widespread coverage of innovative technology, new applications, and important issues concerning all diagnostic imaging techniques. The paper's author, Dr. Jin Qi remarks, "Our data indicated that the imaging of CTLM® was least affected by tissue density in breasts and provides information about angiogenesis in breast lesions, especially in malignant lesions, when used as an adjunct to mammography in heterogeneously dense breasts and extremely dense breasts, sensitivity increased significantly."
On May 14, 2014, we announced that we have received approval from the Ministry of Health in Kuwait to market and sell our CTLM® in that country. Mareen Group Co. is the exclusive distributor of CTLM® in Kuwait.
Among our global users, we have three systems in Poland, two in Italy, two in the Czech Republic, two systems in the United Arab Emirates, two systems in India, and two systems in China as well as one system each in Germany, Hungary, Malaysia, Israel, Indonesia, Brazil, Mexico and Romania. As of the date of this report, IDSI's users have performed over 25,000 CT Laser Mammography (CTLM®) patient scans worldwide.
Other Recent Events
On May 1, 2013, our Board of Directors appointed Elizabeth J. Shotmeyer to serve on our Board.
Ms. Shotmeyer, prior to her appointment as a Director, had loaned the Company a principal amount of $91,950. At the time these loans were made Ms. Shotmeyer was deemed an unaffiliated third party investor. Immediately upon her appointment she became an affiliated party.
The appointment of Ms. Shotmeyer will fill one vacancy on our Board of Directors. Ms. Shotmeyer was appointed to the Compensation Committee. Ms. Shotmeyer has held executive positions in the oil, gas, and real estate sectors for over 40 years, from 1964-2004. She has held several roles such as Director and Vice President at United States Oil Corporation and related companies, located in New Jersey. She has owned and operated oil tank farms in New York, Delaware and Virginia. Ms. Shotmeyer is currently the owner of Shotmeyer Enterprises LLC and Big Shot Communications located in Florida. She has served on various boards from 1989-1993, including but not limited to the Board of Directors for Children's Museum of Boca Raton. In 1972, Ms. Shotmeyer earned her B.A. in English (Pre Law) from University of La Verne, Pomona, CA. Ms. Shotmeyer witnessed her mother's struggle with breast cancer, a devastating battle that resulted in her mother's demise. As a result, she is a firm believer of innovative methods of early detection. Ms. Shotmeyer is appointed to serve as a director until our 2013 annual meeting of shareholders or until her earlier resignation or removal.
Laser Imager for Lab Animals
Our Laser Imager for Lab Animals "LILA™" program is an optical helical micro-CT scanner in a third-generation configuration. The system was designed to image numerous compounds, especially green fluorescent protein, derived from the DNA of jellyfish. The LILA scanner is targeted at pharmaceutical developers and researchers who monitor cancer growth and who use multimodality small animal imaging in their clinical research.
IDSI's strategic thrust for the LILA project has changed, as we decided to focus on women's health business markets with a family of CTLM® systems and related devices and services. The animal imager did not fit our business model although the fundamental technology is related to the human breast imager. Consequently, we sought to align the project with a company already in the animal imaging market that might complete the LILA and commercialize it.
On August 30, 2006 we announced an exclusive license agreement under which Bioscan, Inc. would integrate LILA technology into their animal imaging portfolio. Under the agreement we would transfer technology to Bioscan by December 2006 upon receipt of the technology transfer fee. We have received full payment of $250,000 for the technology transfer fee and $69,000 for the parts associated with the agreement. The agreement also provides for royalties on future sales. Bioscan has commenced its work on the LILA project and placed one of their engineers at our facility so that he can confer with our engineers if necessary. Bioscan pays us for use of the space and consulting fees if they require our engineering assistance. There can be no assurance that it will be successful or that we will receive any royalties from Bioscan.
Financing/Equity Line of Credit
We will require substantial additional funds for working capital, including operating expenses, clinical testing, regulatory processes and manufacturing and marketing programs and our continuing product development programs. Our capital requirements will depend on numerous factors, including the progress of our product development programs, results of pre-clinical and clinical testing, the time and cost involved in obtaining regulatory approvals, the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights, competing technological and market developments and changes in our existing research, licensing and other relationships and the terms of any new collaborative, licensing and other arrangements that we may establish. Moreover, our fixed commitments, including salaries and fees for current employees and consultants, and other contractual agreements are likely to increase as additional agreements are entered into and additional personnel are retained.
From July 2000 until August 2007, when we entered into an agreement for the sale/lease-back of our headquarters facility, Charlton Avenue LLC ("Charlton") provided all of our necessary funding through the private placement sale of convertible preferred stock with a 9% dividend and common stock through various private equity credit agreements. See "Item 2, Results of Operations, Liquidity and Capital Resources, Sale/Lease-Back" We initially sold Charlton 400 shares of our Series K convertible preferred stock for $4 million and subsequently issued an additional 95 Series K shares to Charlton for $950,000 on November 7, 2000. We paid Spinneret Financial Systems Ltd. ("Spinneret"), an independent financial consulting firm unaffiliated with the Company and, according to Spinneret and Charlton, unaffiliated with Charlton, $200,000 as a consulting fee for the first tranche of Series K shares and five Series K shares as a consulting fee for the second tranche. The total of $4,950,000 was designed to serve as bridge financing pending draws on the Charlton private equity line provided through the various private equity credit agreements described in the following paragraphs.
From November 2000 to April 2001, Charlton converted 445 shares of Series K convertible preferred stock into 11,200 common shares and we redeemed 50 Series K shares for $550,000 using proceeds from the Charlton private equity line. Spinneret converted 5 Series K shares for $63,996. All Series K convertible preferred stock has been converted or redeemed and there are no convertible preferred shares outstanding.
Prior Equity Agreements
From August 2000 to February 2004, we obtained funding through three Private Equity Agreements with Charlton. Each equity agreement provided that the timing and amounts of the purchase by the investor were at our sole discretion. The purchase price of the shares of common stock was set at 91% of the market price. The market price, as defined in each agreement, was the average of the three lowest closing bid prices of the common stock over the ten day trading period beginning on the put date and ending on the trading day prior to the relevant closing date of the particular tranche. The only fee associated with the private equity financing was a 5% consulting fee payable to Spinneret. In September 2001 Spinneret proposed to lower the consulting fee to 4% provided that we pay their consulting fees in advance. We reached an agreement to pay Spinneret in advance as requested and paid them $250,000 out of proceeds from a put.
From the date of our first put notice, January 25, 2001 to our last put notice, February 11, 2004, under our Third Private Equity Credit Agreement, we drew a total of $20,506,000 and issued 98,624 shares to Charlton. As each of the obligations under these prior agreements was satisfied, the agreements were terminated. The Third Private Equity Agreement was terminated on March 4, 2004 upon the effectiveness of our first Registration Statement for the Fourth Private Equity Credit Agreement.
On January 9, 2004, we and Charlton entered into a new "Fourth Private Equity Credit Agreement" which replaced our prior private equity agreements. The terms of the Fourth Private Equity Credit Agreement were more favorable to us than the terms of the prior Third Private Equity Credit Agreement. The new, more favorable terms were: (i) The put option price was 93% of the three lowest closing bid prices in the ten day trading period beginning on the put date and ending on the trading day prior to the relevant closing date of the particular tranche, while the prior Third Private Equity Credit Agreement provided for 91%, (ii) the commitment period was two years from the
effective date of a registration statement covering the Fourth Private Equity Credit Agreement shares, while the prior Third Private Equity Credit Agreement was for three years, (iii) the maximum commitment was $15,000,000, (iv) the minimum amount we were required to draw through the end of the commitment period was $1,000,000, while the prior Third Private Equity Credit Agreement minimum amount was $2,500,000, (v) the minimum stock price requirement was controlled by us as we had the option of setting a floor price for each put transaction (the previous minimum stock price in the Third Private Equity Credit Agreement was fixed at $.10), (vi) there were no fees associated with the Fourth Private Equity Credit Agreement; the prior private equity agreements required the payment of a 5% consulting fee to Spinneret, which was subsequently lowered to 4% by mutual agreement in September 2001, and (vii) the elimination of the requirement of a minimum average daily trading volume in dollars. The previous requirement in the Third Private Equity Credit Agreement was $20,000.
We made sales under the Fourth Private Equity Credit Agreement from time to time in order to raise working capital on an "as needed" basis. Under the Fourth Private Equity Credit Agreement we drew down $14,198,541 and issued 133,317 shares of common stock. We terminated use of the Fourth Private Equity Credit Agreement and instead began to rely on the Fifth Private Equity Credit Agreement (described below) upon the April 26, 2006, effectiveness of our S-1 Registration Statement filed March 23, 2006.
On March 21, 2006, we and Charlton entered into a new "Fifth Private Equity Credit Agreement" which has replaced our prior Fourth Private Equity Credit Agreement. The terms of the Fifth Private Equity Credit Agreement were similar to the terms of the prior Fourth Private Equity Credit Agreement. The new credit line's terms were (i) The put option price is 93% of the three lowest closing bid prices in the ten day trading period beginning on the put date and ending on the trading day prior to the relevant closing date of the particular tranche (the "Valuation Period"), (ii) the commitment period was two years from the effective date of a registration statement covering the Fifth Private Equity Credit Agreement shares, (iii) the maximum commitment was $15,000,000, (iv) the minimum amount we were required to draw through the end of the commitment period was $1,000,000, (v) the minimum stock price, also known as the floor price was computed as follows: In the event that, during a Valuation Period, the Bid Price on any Trading Day fell more than 18% below the closing trade price on the trading day immediately prior to the date of the Company's Put Notice (a "Low Bid Price"), for each such Trading Day the parties had no right and were under no obligation to purchase and sell one tenth of the Investment Amount specified in the Put Notice, and the Investment Amount accordingly would be deemed reduced by such amount. In the event that during a Valuation Period there existed a Low Bid Price for any three Trading Days—not necessarily consecutive—then the balance of each party's right and obligation to purchase and sell the Investment Amount under such Put Notice would terminate on such third Trading Day ("Termination Day"), and the Investment Amount would be adjusted to include only one-tenth of the initial Investment Amount for each Trading Day during the Valuation Period prior to the Termination Day that the Bid Price equaled or exceeded the Low Bid Price and (vi) there were no fees associated with the Fifth Private Equity Credit Agreement.
We made sales under the Fifth Private Equity Credit Agreement from time to time in order to raise working capital on an "as needed" basis. Prior to the expiration of the Fifth Private Equity Credit Agreement on March 21, 2008, we drew down $5,967,717 and issued 165,412 shares of common stock.
The Sixth Private Equity Credit Agreement
On April 21, 2008, we and Charlton entered into a new "Sixth Private Equity Credit Agreement" which has replaced our prior Fifth Private Equity Credit Agreement. The terms of the Sixth Private Equity Credit Agreement are similar to the terms of the prior Fifth Private Equity Credit Agreement. This new credit line's terms are (i) The put option price is 93% of the three lowest closing bid prices in the ten day trading period beginning on the put date and ending on the trading day prior to the relevant closing date of the particular tranche (the "Valuation Period"), (ii) the commitment period is three years from the effective date of a registration statement covering the Sixth Private Equity Credit Agreement shares, (iii) the maximum commitment is $15,000,000, (iv) There is no minimum commitment amount, (v) the minimum stock price, also known as the floor price is computed as follows: In the event that, during a Valuation Period, the Bid Price on any Trading Day falls more than 20% below the closing trade price on the trading day immediately prior to the date of the Company's Put Notice (a "Low Bid Price"), for each such Trading Day the parties shall have no right and shall be under no obligation
to purchase and sell one tenth of the Investment Amount specified in the Put Notice, and the Investment Amount shall accordingly be deemed reduced by such amount. In the event that during a Valuation Period there exists a Low Bid Price for any three Trading Days—not necessarily consecutive—then the balance of each party's right and obligation to purchase and sell the Investment Amount under such Put Notice shall terminate on such third Trading Day ("Termination Day"), and the Investment Amount shall be adjusted to include only one-tenth of the initial Investment Amount for each Trading Day during the Valuation Period prior to the Termination Day that the Bid Price equals or exceeds the Low Bid Price and (vi) there are no fees associated with the Sixth Private Equity Credit Agreement. The conditions to our ability to draw under this private equity line, as described above, may materially limit the draws available to us.
Under the Sixth Private Equity Credit Agreement we have drawn down $2,042,392 and issued 454,000 shares of common stock. On November 23, 2009, we terminated our Sixth Private Equity Credit Agreement in connection with the execution of our Private Equity Credit Agreement with Southridge, which was amended on January 7, 2010.
As of the date of this report, since January 2001, we have drawn an aggregate of $42,714,650 in gross proceeds from our equity credit lines with Charlton and have issued 851,352 shares as a result of those draws.
The Southridge Private Equity Credit Agreement
On November 23, 2009, we and Southridge entered into a new "Southridge Private Equity Credit Agreement" which has replaced our prior Sixth Private Equity Credit Agreement with Charlton. On January 7, 2010, we and Southridge amended the terms of the "Southridge Private Equity Credit Agreement" and revised the language to clarify that Southridge is irrevocably bound to accept our put notices subject to compliance with the explicit conditions of the Agreement.
The terms of the Southridge Private Equity Credit Agreement are similar to the terms of the prior Sixth Private Equity Credit Agreement with Charlton. This new credit line's terms are (i) The put option price is 93% of the three lowest closing bid prices in the ten day trading period beginning on the put date and ending on the trading day prior to the relevant closing date of the particular tranche (the "Valuation Period"), (ii) the commitment period is three years from the effective date of a registration statement covering the Southridge Private Equity Credit Agreement shares, (iii) the maximum commitment is $15,000,000, (iv) There is no minimum commitment amount, and (v) there are no fees associated with the Southridge Private Equity Credit Agreement. The conditions to our ability to draw under this private equity line, as described above, may materially limit the draws available to us.
We are obligated to prepare promptly, and file with the SEC within sixty (60) days of the execution of the Southridge Private Equity Credit Agreement, a Registration Statement with respect to not less than 100,000,000 of Registrable Securities, and, thereafter, use all diligent efforts to cause the Registration Statement relating to the Registrable Securities to become effective the earlier of (a) five (5) business days after notice from the Securities and Exchange Commission that the Registration Statement may be declared effective, or (b) one hundred eighty (180) days after the Subscription Date, and keep the Registration Statement effective at all times until the earliest of (i) the date that is one year after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Investor may sell all Registrable Securities under Rule 144 without volume limitations, or (iii) the date the Investor no longer owns any of the Registrable Securities (collectively, the "Registration Period"), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
We are further obligated to prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until the expiration of the Registration Period.
On January 12, 2010, we filed a Registration Statement for 120,000,000 shares pursuant to the requirements of the Southridge Private Equity Credit Agreement. This Registration Statement was declared effective on February 25, 2010. On May 24, 2010 we filed a Post-Effective Amendment No. 1 to our Registration Statement to update our financial statements and related notes to the financial statements and business information for the quarter ending March 31, 2010. We reduced the amount of shares registered to 85,744,007 shares. This amended Registration Statement was declared effective on May 27, 2010.
As of the date of this report, we have drawn down $2,000,000 and issued 142,489 shares of common stock under the Private Equity Credit Agreement with Southridge, all pursuant to the Registration Statement declared effective in May 2010.
On December 21, 2010, we filed a new Registration Statement on Form S-1 covering 35,487,756 shares to be issued pursuant to the Southridge Private Equity Agreement. This Registration Statement, as amended, has not yet been declared effective. As of the date of this report, since January 2001, we have drawn an aggregate of $44,714,650 in gross proceeds from our equity credit lines with Charlton and Southridge and have issued 993,841 shares as a result of those draws.
Short-Term Loans
In November 2009, we borrowed a total of $237,500 from four private investors pursuant to short-term promissory notes. These notes were due and payable in the amount of principal plus 20% premium, so that the total amount due was $285,000. In addition, we issued to the investors 70 shares of restricted common stock for each $1 lent so that a total of 16,625,000 shares of stock were issued to the investors. The aggregate fair market value of the 16,625,000 shares of stock when issued was $465,500. $30,000 principal on one of the notes was sold to OTC Global Partners in September 2012.
$10,000 premium on one of the notes was sold to WHC Capital LLC on March 22, 2013.
As of
March 31, 2013
, we have repaid an aggregate principal and premium in the amount of $148,500 on these short-term notes and owe a balance of $196,300 of which $70,000 is the principal remaining. The original due date of December 21, 2009, was first extended to February 28, 2010, with a second extension to June 15, 2010, a third extension to September 30, 2010 and a fourth extension to October 31, 2010. Further extensions of the $100,000 note were made through June 30, 2012 for 3% additional premium per month. However, as of June 30, 2012, we are accruing this 3% additional premium per month but have not yet received an extension of maturity date and are in technical default of the note. We are negotiating with the lender to extend the maturity date. In connection with all of the extensions, a total of $89,800 of additional premium was accrued as of
March 31, 2013
.
In December 2009, we borrowed a total of $400,000 from a private investor pursuant to three short-term promissory notes. These notes were payable from March 10 through March 15, 2010 in the amount of principal plus 15% premium, so that the total amount due was $460,000. In addition, we issued to the investor 48,000 shares of restricted common stock as collateral. These shares are to be returned and cancelled upon payment of the notes. The original due date of March 15, 2010 was first extended to June 15, 2010, with a second extension to September 30, 2010 and a third extension to October 31, 2010. Further extensions of the notes were made through June 30, 2012 for 3% additional premium per month on each note. We have not yet received an extension of maturity date and are in technical default of the note. We are negotiating with the lender to extend the maturity date. In connection with these extensions a total of $284,420 of additional premium was accrued for the December 2009 notes as the date of this report. In April 2011, Southridge purchased a total of $200,000 in principal value of promissory notes from the private investor. All conversions before December 10, 2012, were adjusted to reflect a 1 for 500 reverse split effective that date. As of
March 31, 2013
, Southridge has converted $180,515 principal and $55,600 premium into 2,257,052 shares of which 41,493 shares of our common stock that was previously issued as collateral.
On December 12, 2012, the private investor sold $180,769 of a promissory note originally dated December 15, 2009 to ASC Recap. The terms of the original note remain the same except that the holder may elect
at any time
to convert any part or all of the $180,769 into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 18,000,000 shares of our common stock in connection with this transaction.
On January 3, 2013, Magna Group, LLC ("Magna") purchased $100,000 principal of a Promissory Note dated December 10, 2009 from a private investor. A new Convertible Promissory Note was issued to Magna on January 3, 2013 with a maturity date of September 3, 2013. Interest will accrue at 12% per annum. Any amount on principal or interest that remains unpaid when due shall bear an interest rate of 22% from the due date until paid. Magna may elect
at any time
to convert any part or all of the $100,000 plus interest into shares of our common stock at an Initial Conversion Price equal to 45% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice. We reserved 50,000,000 shares of our common stock in connection with this transaction.
On January 18, 2013, Redwood Management LLC ("Redwood") purchased $100,000 principal of a $100,000 Promissory Note originally dated December 14, 2009 from a private investor. Redwood may elect
at any time
to convert any part or all of the $100,000 into shares of our common stock at an Initial Conversion Price equal to 45% of the lowest closing bid price during the 15 trading days immediately prior to the date of the conversion notice. We reserved 100,000,000 shares of our common stock in connection with this transaction.
On January 8, 2010, we borrowed a total of $600,000 from a private investor pursuant to two short-term promissory notes. These notes were payable April 6, 2010 in the amount of principal plus 15% premium, so that the total amount due was $690,000. In addition, we issued to the investor 62,727 shares of restricted common stock as collateral. These shares are to be returned and cancelled upon payment of the notes. The original due date of April 6, 2010 was first extended to June 15, 2010, with a second extension to September 30, 2010 and a third extension to October 31, 2010. Further extensions of the notes were made through July 31, 2011 for 3% additional premium per month on each note. In January 2011, Southridge purchased a total of $600,000 in principal value of promissory notes from the private investor. As of the date of this report, Southridge has fully converted $600,000 principal and $340,099 premium into 768,912 shares of our common stock of which 62,112 shares were collateral shares and 706,800 new shares were issued pursuant to Rule 144. Although we were in technical default of these two notes, the holder, Southridge elected to convert these notes into common shares. In connection with these prior extensions through June 30, 2012 and the accrual of the additional premiums through May 31, 2012, a total of $255,647 of additional premium was accrued for the January 2010 notes as of June 30, 2012.
On February 25, 2010, we borrowed $350,000 from a private investor pursuant to a short-term promissory note. We issued to the investor 35 shares of Series L Convertible Preferred Stock as collateral. This note had a maturity date of April 30, 2010; however, the investor gave us notice of conversion to the collateral shares on March 31, 2010. The Note was cancelled upon this conversion. The 35 shares of Series L Convertible Preferred Stock accrue dividends at an annual rate of 9% and are convertible into an aggregate of 16,587,690 shares of common stock (473,934 shares of common stock for each share of preferred stock). Pursuant to the Certificate of Designation, Rights and Preferences for the Series L Convertible Preferred Stock, we are obligated to reduce the conversion price and reserve additional shares for conversion if we sold or issued common shares below the price of $.0211 per share (the market price on the date of issuance of the Preferred Stock). In October 2010, we obtained a waiver from the private investor holding the 35 shares of Series L Convertible Preferred Stock in which the investor agreed to convert no more than the 16,587,690 common shares currently reserved as we do not have sufficient authorized common shares to reserve for further conversions pursuant to the Certificate of Designation, Rights and Preferences. The investor agreed to a conversion floor price of $.015, which required us to reserve an additional 13,491 common shares.
On January 6, 2011, the investor converted 15 shares of the Series L Convertible Preferred Stock into 20,000 shares of common stock. As of the date of this report, the investor holds 20 shares of the Series L Convertible Preferred Stock.
On December 13, 2010, we borrowed a total of $60,000 from a private investor pursuant to a short-term promissory note. The note is payable on or before January 31, 2011. As consideration for this loan, we were obligated to pay back his principal, $26,400 in premium and issue 6,000 restricted shares of common stock upon the approval by our shareholders of an increase in authorized common stock at our annual meeting to be held on July 12, 2011. On September 9, 2011, we issued the 6,000 common shares pursuant to Rule 144. We received an extension of maturity date to December 31, 2012 for this note. On September 5, 2012, the private investor sold $40,000 principal of the note to SGI Group. On December 17, 2012, the private investor sold the balance of his note totaling $46,400 ($20,000 principal and $26,400 premium) to WHC Capital LLC.
In November and December 2010, we received a total of $145,000 from Southridge pursuant to three short-term promissory notes. All three notes provide for a redemption premium of 15% of the principal amount on or before March 31, 2011. Interest will accrue at 8% per annum until maturity. Southridge may elect
at any time
to convert any part or all of the $145,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 90% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In January 2011, we received a total of $157,000 from Southridge pursuant to three short-term promissory notes. All three notes provide for a redemption premium of 15% of the principal amount on or before May 31, 2011. Interest will accrue at 8% per annum until maturity. Southridge may elect
at any time
to convert any part or all of the $157,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 90% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In February 2011, we received a total of $115,000 from Southridge pursuant to two short-term promissory notes. Both notes provide for a redemption premium of 15% of the principal amount on or before May 31, 2011. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $115,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 90% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In March 2011, we received $60,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before May 31, 2011. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $60,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 90% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In April 2011, we received $165,000 from Southridge pursuant to two short-term promissory notes. The notes provide for a redemption premium of 15% of the principal amount on or before July 31, 2011. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $165,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 90% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In May 2011, we received $80,000 from Southridge pursuant to two short-term promissory notes. The notes provide for a redemption premium of 15% of the principal amount on or before July 31, 2011. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $80,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a
conversion price equal to the lesser of (a) $0.01 or (b) 90% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In July 2011, we received $150,000 from Southridge pursuant to a short-term promissory note. The note provided for a redemption premium of 15% of the principal amount on or before December 31, 2011. We received an extension of maturity date to February 29, 2012 for these notes. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $150,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 70% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In August 2011, we received $82,500 from Southridge pursuant to two short-term promissory notes of which the principal on these notes was $100,000 and $7,500, respectively. The $100,000 note provided for a $25,000 original issue discount and both notes provided for a redemption premium of 15% of the principal amount on or before December 31, 2011. We received an extension of maturity date to February 23, 2013 for these notes. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $107,500 principal amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.01 or (b) 70% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. The
$100,000 and the
$7,500 note
have
been paid in full through the conversion to common stock pursuant to Rule 144.
In August 2011, we received $50,000 from OTC Global Partners, LLC pursuant to a short-term promissory note. The note provided for a redemption premium of 15% of the principal amount on or before March 1, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. OTC Global Partners, LLC may elect
at any time
to convert any part or all of the $50,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.014 or (b) 65% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In September 2011, we received $133,000 from Southridge pursuant to two short-term promissory notes of which the principal on these notes was $100,000 and $100,000, respectively. One of the $100,000 notes provided for a $33,000 original issue discount and the other $100,000 note provided a $34,000 original issue discount. The notes provided for a redemption premium of 15% of the principal amount on or before December 31, 2011. We received an extension of maturity date to December 31, 2012 for these notes. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $200,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.0075 or (b) 70% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. The $100,000 note has been paid in full through the conversion to common stock pursuant to Rule 144.
In October 2011, we received $67,000 from Southridge pursuant to a short-term promissory note of which the principal on the note was $100,000. The note provides for a $33,000 original issue discount. The note provided for a redemption premium of 15% of the principal amount on or before January 12, 2012. We received an extension of maturity date to December 31, 2012 for this note. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $100,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.0075 or (b) 70% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice.
In October 2011, we received $67,000 from Southridge pursuant to a short-term promissory note of which the principal on the note was $100,000. The note provides for a $33,000 original issue discount. The note provided for a redemption premium of 15% of the principal amount on or before January 26, 2012. We received an extension of
maturity date to December 31, 2012 for this note. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $100,000 Principal Amount of the Notes plus accrued interest into shares of our common stock at a conversion price equal to the lesser of (a) $0.005 or (b) 70% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In October 2011, we received $78,500 from Asher Enterprises pursuant to a short-term promissory note due on or before July 26, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. Asher Enterprises may elect
at any time after 180 days
to convert any part or all of the $78,500 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 58% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In November 2011, we received $20,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $20,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 62% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
On November 21, 2011, Southridge sold their May 12, 2011 $60,000 short-term promissory note to Panache Capital, LLC ("Panache"). The terms of the original note remain the same except that the maturity date is now November 21, 2012 and interest will accrue at 10% per annum until maturity above and beyond the premium.
In November 2011, we received $40,000 from Panache pursuant to a short-term promissory note. The note provides a maturity date of November 21, 2012. Interest will accrue at 10% per annum until maturity. Panache may elect
at any time
to convert any part or all of the $40,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 62% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In November 2011, we received $53,000 from Asher Enterprises pursuant to a short-term promissory note due on or before September 5, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. Asher Enterprises may elect
at any time after 180 days
to convert any part or all of the $53,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 58% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. This note has been paid in full through the conversion to common stock pursuant to Rule 144.
In December 2011, we received $17,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before December 18, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $17,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 62% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In December 2011, we received $12,000 from an unaffiliated third party investor pursuant to a short-term promissory note. The note provided for a redemption premium of 15% of the principal amount on or before March 8, 2012. Interest will accrue at 10% per annum until maturity above and beyond the premium. On January 6, 2012, we amended a promissory note in the principal amount of $12,000 dated December 9, 2011 held by an unaffiliated third-party investor. The note provided for a redemption premium of 15% of the principal amount on or before March 8, 2012. Interest will accrue at 10% per annum until maturity above and beyond the premium. The
amendment provided for the issuance of three (3) restricted shares of Series P Preferred Stock having a stated value of $5,000 per share. These shares, having a total value of $15,000, will be used as collateral for the note held by the investor. We received an extension of maturity to June 4, 2012 for this note. Thereafter, a late fee premium of 1% per month will be due if unpaid. We have not yet received an extension of maturity date and are in technical default of the note. We are negotiating with the lender to extend the maturity date.
In December 2011, we borrowed a total of $21,604 from a private investor pursuant to two short-term promissory notes. The notes provided for a 2% premium per month. One of the notes was payable on or before December 16, 2011 and the other on or before January 6, 2012. We received an extension of maturity date to June 30, 2012 for these notes for 3% additional premium per month on each note.
In January 2012, we received a total of $175,200 from an unaffiliated third party investor pursuant to five short-term promissory notes with a maturity date ranging from March 5, 2012 to March 20, 2012. The notes provided for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 10% per annum until maturity above and beyond the premium. We issued a total of 38 Series P Preferred Stock to the investor as collateral with a total stated value of $190,000. We received an extension of maturity to June 4, 2012 for these notes. Thereafter, a late fee premium of 1% per month will be due if unpaid. We have not yet received an extension of maturity date and are in technical default of the note. We are negotiating with the lender to extend the maturity date.
On March 20, 2013, the private investor sold $57,600 Principal of his $57,600 note to Tangiers Investment Group LLC. The full sale of the note was for $75,969 ($57,600 Principal, $8,640 Premium, $4,032 Late Fee Premium and $5,697 Interest). On March 20, 2013, we entered into a new Promissory Note with Tangiers Capital for $75,969 in Principal with a maturity date of March 19, 2014. Interest will accrue at 15% per annum until maturity above and beyond the premium. The holder may elect at an Event of Default to convert any part or all of the $75,969 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In February 2012, we received a total of $42,000 from an unaffiliated third party investor pursuant to two short-term promissory notes with a maturity date ranging from April 13, 2012 to April 30, 2012. The notes provided for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 10% per annum until maturity above and beyond the premium. We issued a total of 9 Series P Preferred Stock to the investor as collateral with a total stated value of $45,000. We received an extension of maturity to June 4, 2012 for these notes. Thereafter, a late fee premium of 1% per month will be due if unpaid. We have not yet received an extension of maturity date and are in technical default of the note. We are negotiating with the lender to extend the maturity date.
On February 23, 2012, Southridge sold their $100,000 short-term promissory note to Panache Capital, LLC ("Panache") of which a balance of $70,000 principal was remaining after Southridge converted $30,000 principal in a debt to equity conversion on February 17, 2012. The terms of the original note remain the same except that the maturity date is now November 21, 2012 and interest will accrue at 10% per annum until maturity above and beyond the premium.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In February 2012, we received $25,000 from Panache pursuant to a short-term promissory note. The note provides a maturity date of February 28, 2013. Interest will accrue at 10% per annum until maturity. Panache may elect
at any time
to convert any part or all of the $25,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 55% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In March 2012, we received $30,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before March 18, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 62% of the average of the two lowest closing bid prices during the five trading days
immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In April 2012, we received $11,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2012. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $11,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In April 2012, we received $2,500 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before April 25, 2013. Interest
at any time
an Event of Default to convert any part or all of the $2,500 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In May 2012, we received a total of $25,000 from an unaffiliated third party investor pursuant to a short-term promissory note with a maturity date of August 2, 2012. The note provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 10% per annum until maturity above and beyond the premium. We issued a total of 5 Series P Preferred Stock to the investor as collateral with a total stated value of $25,000. We have not yet received an extension of maturity date and are in technical default of the note. We are negotiating with the lender to extend the maturity date.
In May 2012, we received $8,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before May 14, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $8,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In May 2012, we received $13,000 from Linda Grable
, our CEO and Chairman of the Board
, pursuant to a short-term promissory note.
Ms. Grable is deemed an affiliated party.
The note provides for a redemption premium of 15% of the principal amount on or before May 21, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Ms. Grable may elect
at any time
to convert any part or all of the $13,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In May 2012, we received $32,000 from a private investor pursuant to two short-term promissory notes with a maturity date ranging from May 17, 2013 to May 20, 2013. The notes provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $32,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
In June 2012, we received $6,672 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before June 17, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $6,672 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days
immediately prior to the date of the conversion notice.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In June 2012, we received $14,000 from a private investor pursuant to two short-term promissory notes with a maturity date ranging from June 6, 2013 to June 20, 2013. The notes provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $14,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
In July 2012, we received $20,100 from a private investor pursuant to four short-term promissory notes with a maturity date ranging from July 9, 2013 to July 24, 2013. The notes provide for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $20,100 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
In August 2012, we received $25,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $25,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice. We reserved 50,000,000 shares of our common stock in connection with this loan.
The note has been paid in full through the conversion to common stock pursuant to Rule 144.
In August 2012, we received $95,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $95,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 400,000,000 shares of our common stock in connection with this loan.
On August 20, 2012, Southridge sold $70,000 of their original $100,000 short-term promissory note dated October 12, 2011 to Levin Consulting Group. The terms of the original note remain the same except that the holder may elect
at any time
to convert any part or all of the $70,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
In August 2012, we received $35,000 from Levin Consulting Group pursuant to a short-term promissory note with a maturity date of August 20, 2013. The note provides for a redemption premium of 15% of the principal amount on or before November 18, 2012; 20% on or before December 18, 2012; 25% on or before January 17, 2013; and 30% on or before February 16, 2013. Interest will accrue at 10% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $35,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
On August 20, 2012, Southridge sold $30,000 of their original $100,000 short-term promissory note dated October 12, 2011 to SGI Group LLC ("SGI"). The terms of the original note remain the same except that the holder may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
In August 2012, we received $15,000 from SGI pursuant to a short-term promissory note with a maturity date of August 20, 2013. The note provides for a redemption premium of 15% of the principal amount on or before November 18, 2012; 20% on or before December 18, 2012; 25% on or before January 17, 2013; and 30% on or before February 16, 2013. Interest will accrue at 10% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $15,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
In September 2012, we received $29,000 from Southridge pursuant to a short-term promissory note of which the principal on the note was $30,000. The note provides for a $1,000 original issue discount. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Southridge may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 150,000,000 shares of our common stock in connection with this loan.
In September 2012, we received $25,000 from Panache pursuant to a short-term promissory note of which the principal on the note was $30,000. The note provides for a $5,000 original issue discount. The note provides for a redemption premium of 15% of the principal amount on or before December 31, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. Panache may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 200,000,000 shares of our common stock in connection with this loan.
In September 2012, we received $30,000 from Southridge pursuant to a short-term promissory note. The note provides for a redemption premium of 20% on or before December 17, 2012; 25% on or before March 17, 2013; and 30% on or before June 15, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 700,000,000 shares of our common stock in connection with this loan.
On September 26, 2012, a private investor sold $30,000 of its original $100,000 short-term promissory note dated November 23, 2009 to OTC Global Partners. The terms of the original note remain the same except that the new note provides for a new redemption premium of 15% of the principal amount on or before September 25, 2013.
Interest will accrue at 8% per annum until maturity above and beyond the premium. OTC Global Partners may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the Initial closing bid price, then the Purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
In October 2012, we received $20,000 from Panache pursuant to a short-term promissory note. The note provides a maturity date of September 28, 2013. Interest will accrue at 10% per annum until maturity. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. Panache may elect
at any time
to convert any part or all of the $20,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
In October 2012, we received $38,500 from FLUX Carbon Starter pursuant to a short-term promissory note. The note provides a maturity date of October 3, 2013. We received net proceeds of $33,250 after deductions of $3,500 for legal fees and $1,750 for a finder's fee. Interest will accrue at 10% per annum until maturity. FLUX Carbon Starter may elect
at any time
to convert any part or all of the $38,500 principal amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date.
In October 2012, we received $27,000 from Southridge pursuant to a short-term promissory note of which the principal on the note was $40,000 and the maturity date of the note is March 31, 2013. The note provides for a $13,000 original issue discount. The note provides for a redemption premium of 20% on or before January 7, 2013; 25% on or before April 7, 2013; and 30% on or before July 15, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $40,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 300,000,000 shares of our common stock in connection with this loan.
In October 2012, we received $1,000 from Southridge pursuant to a short-term promissory note. The note provides a maturity date of April 30, 2013. The note provides for a redemption premium of 20% on or before January 22, 2013; 25% on or before April 24, 2013; and 30% after April 24, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $40,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 300,000,000 shares of our common stock in connection with this loan.
In November 2012, we received $6,250 from SGI Group pursuant to a short-term promissory note of which the principal on the note was $12,500 and the maturity date of the note is May 31, 2013. The note provides for a $6,250 original issue discount. The note provides for a redemption premium of 20% of the principal amount on or before February 10, 2013; 25% on or before May 11, 2013; and 30% after May 11, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $12,500 Principal Amount of the Note plus accrued interest into shares of our common stock at an
Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 125,000,000 shares of our common stock in connection with this loan.
In November 2012, we received $6,250 from Star City Capital pursuant to a short-term promissory note of which the principal on the note was $12,500 and the maturity date of the note is May 31, 2013. The note provides for a $6,250 original issue discount. The note provides for a redemption premium of 20% of the principal amount on or before February 10, 2013; 25% on or before May 11, 2013; and 30% after May 11, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $12,500 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 125,000,000 shares of our common stock in connection with this loan.
In November 2012, we received $20,000 from Southridge pursuant to a short-term promissory note of which the principal on the note was $40,000 and the maturity date of the note is May 31, 2013. The note provides for a $20,000 original issue discount. The note provides for a redemption premium of 20% on or before March 27, 2013; 25% on or before June 25, 2013; and 30% after June 25, 2013. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $40,000 Principal Amount of the Note plus accrued interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice; provided that if the closing bid price for the common stock on the Clearing Date is lower than the initial closing bid price, then the purchase price shall be adjusted such that the discount shall be taken from the Closing Bid Price on the clearing date. We reserved 400,000,000 shares of our common stock in connection with this loan.
In December 2012, we received $3,000 from a private investor pursuant to two short-term promissory notes with a maturity date ranging from December 5, 2013 to December 9, 2013. The notes provide for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $3,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In December 2012, we received $20,000 from a private investor pursuant to a short-term promissory note with a maturity date of December 19, 2013. The notes provide for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $20,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In December 2012, we received $12,000 from an unaffiliated third party investor pursuant to a short-term promissory note with a maturity date of June 13, 2013. The note provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 10% per annum until maturity above and beyond the premium. We issued a total of 3 Series P Preferred Stock to the investor as collateral with a total stated value of $15,000.
In December 2012, we received $15,000 from WHC Capital, LLC pursuant to a short-term promissory note with a maturity date of October 6, 2013. Interest will accrue at 12% per annum until maturity above and beyond the premium. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. The holder may elect
at any time
to convert any part or all of the $15,000
Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In January 2013, we received $31,500 from Hanover Holdings I, LLC ("Hanover") pursuant to a short-term promissory note. The note provides a maturity date of September 3, 2013. Interest will accrue at 12% per annum. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. Hanover may elect
at any time
to convert any part or all of the $31,500 plus interest into shares of our common stock at an Initial Conversion Price equal to 45% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice. We reserved 20,000,000 shares of our common stock in connection with this transaction.
On January 3, 2013, Magna Group, LLC ("Magna") purchased $100,000 principal of a Promissory Note dated December 10, 2009 from a private investor. A new Convertible Promissory Note was issued to Magna on January 3, 2013 with a maturity date of September 3, 2013. Interest will accrue at 12% per annum. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. Magna may elect
at any time
to convert any part or all of the $100,000 plus interest into shares of our common stock at an Initial Conversion Price equal to 45% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice. We reserved 50,000,000 shares of our common stock in connection with this transaction.
In January 2013, we received $5,850 from a private investor pursuant to two short-term promissory notes with a maturity date ranging from January 3, 2014 to January 8, 2014. The notes provide for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $5,850 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In January 2013, we received $30,000 from Black Arch Opportunity Fund LP ("Black Arch") pursuant to a short-term promissory note. The note provides a maturity date of November 9, 2013. Interest will accrue at 12% per annum. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. Black Arch may elect
at any time
to convert any part or all of the $30,000 plus interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice.
In January 2013, we received $25,000 from Redwood Management LLC ("Redwood") pursuant to a $125,000 short-term promissory note dated January 18, 2013. The terms of the note provide that the Redwood will pay $25,000 every 30 days from execution of the note until the entire $125,000 is paid in full. The note provides a maturity date of January 18, 2014. Interest will accrue at 12% per annum on the aggregate unconverted outstanding principal amount. Redwood may elect
at any time
to convert any part or all of the outstanding balance plus interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the fifteen trading days immediately prior to the date of the conversion notice. We reserved 100,000,000 shares of our common stock in connection with this transaction.
In January 2013, Redwood agreed to purchase five promissory notes held by a private investor totaling $365,688 of which $213,600 in principal and $123,752 in premium; $17,040 is cash redemption premium and $11,296 is interest. Redwood may elect
at any time
to convert any part or all of the outstanding balance plus interest into shares of our common stock at an Initial Conversion Price equal to 45% of the lowest closing bid price during the fifteen trading days immediately prior to the date of the conversion notice. We reserved 60,000,000 shares of our common stock in connection with this transaction.
In January 2013, we received $19,500 from Hanover Holdings I, LLC ("Hanover") pursuant to a short-term promissory note. The note provides a maturity date of January 23, 2014. Interest will accrue at 12% per annum. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. Hanover may elect
at any time
to convert any part or all of the $19,500 plus interest into shares of our common stock at an Initial Conversion Price equal to 45% of the lowest closing bid price during the five trading days immediately prior to the date of the conversion notice. We reserved 12,500,000 shares of our common stock in connection with this transaction.
In January 2013, we received $15,000 from WHC Capital, LLC pursuant to a short-term promissory note with a maturity date of January 25, 2014. Interest will accrue at 12% per annum until maturity above and beyond the premium. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. The holder may elect
at any time
to convert any part or all of the $15,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In February 2013, we received $7,000 from a private investor pursuant to a short-term promissory note with a maturity date of February 7, 2014. The note provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $7,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In February 2013, we received $25,000 from Redwood Management LLC ("Redwood") pursuant to a $125,000 short-term promissory note dated January 18, 2013. The terms of the note provide that the Redwood will pay $25,000 every 30 days from execution of the note until the entire $125,000 is paid in full. The note provides a maturity date of January 18, 2014. Interest will accrue at 12% per annum on the aggregate unconverted outstanding principal amount. Redwood may elect
at any time
to convert any part or all of the outstanding balance plus interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the fifteen trading days immediately prior to the date of the conversion notice.
In February 2013, we received $15,000 from WHC Capital, LLC pursuant to a short-term promissory note with a maturity date of January 25, 2014. Interest will accrue at 12% per annum until maturity above and beyond the premium. Any amount on principal or interest that remains unpaid when due, shall bear an interest rate of 22% from the due date until paid. The holder may elect
at any time
to convert any part or all of the $15,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In March 2013, we received $78,500 from Asher Enterprises pursuant to a short-term promissory note due on or before December 5, 2013. We received net proceeds of $75,000 after deductions of $2,500 for legal fees. Interest will accrue at 8% per annum until maturity above and beyond the premium. Asher Enterprises may elect
at any time after 180 days
to convert any part or all of the $78,500 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 58% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. We reserved 209,000,000 shares of our common stock in connection with this loan.
In March 2013, we received $30,000 from Tangiers Investment Group, LLC ("Tangiers") pursuant to a short-term promissory note due on or before December 5, 2013. We received net proceeds of $25,000 after deductions of $2,500 for legal fees and $2,500 for a consulting fee. Interest will accrue at 15% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $30,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In March 2013, we received $20,000 from JMJ Financial pursuant to a short-term promissory note with a maturity date of March 26, 2014. During the first 90 days of the loan period, interest will be 0%. Interest will accrue at 12% per annum after 90 days until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $20,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to the lower of $0.0016 or 60% of the average of the lowest closing bid price during the 25 trading days immediately prior to the date of the conversion notice. We reserved 500,000,000 shares of our common stock in connection with this loan.
In March 2013, we received $7,500 from Redwood Management LLC ("Redwood") pursuant to a $125,000 short-term promissory note dated January 18, 2013. The terms of the note provide that the Redwood will pay $25,000 every 30 days from execution of the note until the entire $125,000 is paid in full. The note provides a maturity date of January 18, 2014. Interest will accrue at 12% per annum on the aggregate unconverted outstanding principal amount. Redwood may elect
at any time
to convert any part or all of the outstanding balance plus interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the fifteen trading days immediately prior to the date of the conversion notice.
In April 2013, we received $8,000 from Linda Grable
, our CEO and Chairman of the Board
,
pursuant to a short-term promissory note.
Ms. Grable is deemed an affiliated party.
The note provides for a redemption premium of 15% of the principal amount on or before March 31, 2014. Interest will accrue at 8% per annum until maturity above and beyond the premium. Ms. Grable may elect
at any time
to convert any part or all of the $8,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the two lowest closing bid prices during the five trading days immediately prior to the date of the conversion notice.
In April 2013, we received $10,000 from a private investor pursuant to a short-term promissory note with a maturity date of April 2, 2014. The note provides for a redemption premium of 15% of the principal amount upon maturity. Interest will accrue at 8% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $10,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In April 2013, we received $32,500 from Asher Enterprises pursuant to a short-term promissory note due on or before January 14, 2014. We received net proceeds of $30,000 after deductions of $2,500 for legal fees. Interest will accrue at 8% per annum until maturity above and beyond the premium. Asher Enterprises may elect
at any time after 180 days
to convert any part or all of the $32,500 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 58% of the average of the three lowest closing bid prices during the 10 trading days immediately prior to the date of the conversion notice. We reserved 2,662,000,000 shares of our common stock in connection with this loan.
On April 25, 2013, the private investor sold $16,000 Principal of his $16,000 note to Tangiers Investment Group LLC. The full sale of the note was for $21,916 ($16,000 Principal, $4,000 Premium and $1,916 Interest). On April 25, 2013, we entered into a new Promissory Note with Tangiers Capital for $21,916 in Principal with a maturity date of April 24, 2014. Interest will accrue at 15% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $21,916 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
On April 25, 2013, the private investor sold $11,648 Principal of his $22,000 note to Tangiers Investment Group LLC. The full sale of the note was for $18,084 ($11,648 Principal, $3,947 Premium and $2,489 Interest). On April 25, 2013, we entered into a new Promissory Note with Tangiers Capital for $18,084 in Principal with a maturity date of April 24, 2014. Interest will accrue at 15% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $18,084 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In April 2013, we received $20,000 from Tangiers Investment Group, LLC ("Tangiers") pursuant to a short-term promissory note due on or before April 24, 2014. We received net proceeds of $15,000 after deductions of $2,500 for legal fees and $2,500 for a consulting fee. Interest will accrue at 15% per annum until maturity above and beyond the premium. The holder may elect
at any time
to convert any part or all of the $20,000 Principal Amount of the Note plus accrued interest into shares of our common stock at a conversion price equal to 50% of the average of the lowest closing bid price during the ten trading days immediately prior to the date of the conversion notice.
In April 2013, we received $5,000 from Redwood Management LLC ("Redwood") pursuant to a $125,000 short-term promissory note dated January 18, 2013. The terms of the note provide that the Redwood will pay $25,000 every 30 days from execution of the note until the entire $125,000 is paid in full. The note provides a maturity date of January 18, 2014. Interest will accrue at 12% per annum on the aggregate unconverted outstanding principal amount. Redwood may elect
at any time
to convert any part or all of the outstanding balance plus interest into shares of our common stock at an Initial Conversion Price equal to 50% of the lowest closing bid price during the fifteen trading days immediately prior to the date of the conversion notice.
OID (Original Issue Discount) is included in debt discount and amortized ratably to interest expense over the term of the respective notes to which they relate.
Debt to Equity Conversions:
On May 11, 2011, Southridge executed a debt to equity conversion of a $80,000 short-term promissory note dated November 11, 2010 plus accrued interest of $3,174. We issued Southridge 22,180 common shares pursuant to Rule 144 based on an agreed exchange price of $3.75 per share. We canceled the $12,000 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On July 13, 2011, Southridge executed a debt to equity conversion of a $14,000 short-term promissory note dated December 16, 2010 plus accrued interest of $641. We issued Southridge 2,928 common shares pursuant to Rule 144 based on an agreed exchange price of $5 per share. We canceled the $2,100 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On July 13, 2011, Southridge executed a debt to equity conversion of a $51,000 short-term promissory note dated December 22, 2010 plus accrued interest of $2,269. We issued Southridge 10,654 common shares pursuant to Rule 144 based on an agreed exchange price of $5per share. We canceled the $7,650 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On July 21, 2011, Southridge executed a debt to equity conversion of a $55,000 short-term promissory note dated January 13, 2011 plus accrued interest of $2,278. We issued Southridge 11,456 common shares pursuant to Rule 144 based on an agreed exchange price of $5 per share. We canceled the $8,250 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On July 21, 2011, Southridge executed a debt to equity conversion of a $22,000 short-term promissory note dated January 19, 2011 plus accrued interest of $882. We issued Southridge 4,576 common shares pursuant to Rule 144 based on an agreed exchange price of $5 per share. We canceled the $3,300 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On August 24, 2011, Southridge executed a debt to equity conversion of a $80,000 short-term promissory note dated January 28, 2011 plus accrued interest of $3,647. We issued Southridge 16,729 common shares pursuant to Rule 144 based on an agreed exchange price of $5 per share. We canceled the $12,000 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On August 24, 2011, Southridge executed a partial debt to equity conversion of a $80,000 short-term promissory note dated February 7, 2011 in which they converted $20,000 principal plus accrued interest of $868. We issued Southridge 4,174 common shares pursuant to Rule 144 based on an agreed exchange price of $5 per share.
On September 27, 2011, Southridge executed a final debt to equity conversion of a $80,000 short-term promissory note dated February 7, 2011 in which they converted the remaining $60,000 principal plus accrued interest of $868. We issued Southridge 16,780 common shares pursuant to Rule 144 based on an agreed conversion price of $3.75 per share. We canceled the $12,000 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On September 27, 2011, Southridge executed a debt to equity conversion of a $35,000 short-term promissory note dated February 15, 2011 plus accrued interest of $1,688. We issued Southridge 9,783 common shares pursuant to Rule 144 based on an agreed conversion price of $3.75 per share. We canceled the $5,250 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On September 27, 2011, Southridge executed a debt to equity conversion of a $60,000 short-term promissory note dated March 31, 2011 plus accrued interest of $2,315. We issued Southridge 16,617 common shares pursuant to Rule 144 based on an agreed conversion price of $3.75 per share. We canceled the $9,000 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On September 28, 2011, we amended the terms of all debt agreements with Southridge Partners II, LP and agreed to amend the conversion terms of the Notes such that the principal portion of the Notes, plus accrued interest, shall be convertible into shares of our common stock at a conversion price per share equal to the lesser of (a) $3.75 or (b) ninety percent (90%) of the average of the three (3) lowest closing bid prices during the ten (10) trading days immediately prior to the date of the conversion notice.
On October 13, 2011, Southridge executed a debt to equity conversion of a $100,000 short-term promissory note dated April 14, 2011 plus accrued interest of $3,989. We issued Southridge 41,596 common shares pursuant to Rule 144 based on an agreed conversion price of $2.50 per share. We canceled the $15,000 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On November 3, 2011, Southridge executed a debt to equity conversion of a $65,000 short-term promissory note dated April 26, 2011 plus accrued interest of $2,721. We issued Southridge 27,088 common shares pursuant to Rule 144 based on an agreed conversion price of $2.50 per share. We canceled the $9,750 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On November 16, 2011, Southridge executed a debt to equity conversion of a $20,000 short-term promissory note dated May 6, 2011 plus accrued interest of $850. We issued Southridge 13,452 common shares pursuant to Rule 144 based on an agreed conversion price of $1.55 per share. We canceled the $3,000 in premium associated with this note because the note was fully converted into common stock and was not redeemed for cash.
On December 15, 2011, Panache executed a partial debt to equity conversion of a $60,000 short-term promissory note dated May 12, 2011 in which they converted $14,415 principal. We issued Panache 10,000 common shares pursuant to Rule 144 based on an agreed conversion price of $1.4415 per share.
On January 3, 2012, Panache executed a partial debt to equity conversion of a $60,000 short-term promissory note dated May 12, 2011 in which they converted $12,896 principal. We issued Panache 16,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.806 per share.
On January 10, 2012, Panache executed a partial debt to equity conversion of a $60,000 short-term promissory note dated May 12, 2011 in which they converted $12,896 principal. We issued Panache 16,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.806 per share.
On January 18, 2012, Panache executed a partial debt to equity conversion of a $60,000 short-term promissory note dated May 12, 2011 in which they converted $12,710 principal. We issued Panache 20,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.6355 per share.
On January 27, 2012, Panache executed a debt to equity conversion of a $60,000 short-term promissory note dated May 12, 2011 in which they converted the final $7,083 in principal. We issued Panache 11,424 common shares pursuant to Rule 144 based on an agreed conversion price of $0.612 per share. We still owe Panache $3,139 in accrued interest associated with this note.
On January 23, 2012, Southridge executed a partial debt to equity conversion of a $150,000 short-term promissory note dated July 27, 2011 in which they converted $85,000 principal. We issued Southridge 132,781 common shares with a restrictive legend based on an agreed conversion price of $0.65 per share. The restrictive legend was removed on February 2, 2012 pursuant to Rule 144.
On January 27, 2012, Southridge executed a partial debt to equity conversion of a $150,000 short-term promissory note dated July 27, 2011 in which they converted $30,000 principal. We issued Southridge 48,387 common shares pursuant to Rule 144 based on an agreed conversion price of $0.60 per share.
On February 7, 2012, Southridge executed a partial debt to equity conversion of a $150,000 short-term promissory note dated July 27, 2011 in which they converted $18,500 principal and $6,411 interest. We issued Southridge 48,555 common shares pursuant to Rule 144 based on an agreed conversion price of $0.515 per share.
On February 10, 2012, Southridge executed a partial debt to equity conversion of a $150,000 short-term promissory note dated July 27, 2011 in which they converted $16,500 principal and $99 interest. We issued Southridge 34,544 common shares pursuant to Rule 144 based on an agreed conversion price of $0.48 per share.
On February 17, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $30,000 principal and $3,858 interest. We issued Southridge 68,475 common shares on February 27, 2012 pursuant to Rule 144 based on an agreed conversion price of $0.495 per share.
On February 23, 2012, Southridge executed a debt to equity conversion of a $7,500 short-term promissory note dated August 23, 2011 in which they converted $7,500 principal and $289 interest. We issued Southridge 15,091 common shares pursuant to Rule 144 based on an agreed conversion price of $0.515 per share.
On February 28, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated September 12, 2012 in which they converted $51,000 principal and $3,595 interest. We issued Southridge 121,456 restricted common shares pursuant to Rule 144 based on an agreed conversion price of $0.45 per share.
On March 5, 2012, OTC Global Partners executed a debt to equity conversion of a $50,000 short-term promissory note dated August 30, 2011 in which they converted $50,000 principal and $2,027 interest. We issued OTC Global Partners 145,530 common shares pursuant to Rule 144 based on an agreed conversion price of $0.3575 per share.
On April 13, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated September 12, 2012 in which they converted $49,000 principal and $1,096 interest. We issued Southridge 247,387 restricted common shares on April 24, 2012 pursuant to Rule 144 based on an agreed conversion price of $0.205 per share.
On April 13, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated September 28, 2012 in which they converted $4,000 principal and $4,340 interest. We issued Southridge 41,184 restricted common shares on April 24, 2012 pursuant to Rule 144 based on an agreed conversion price of $0.205 per share.
On May 1, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,765 principal. We issued Panache 42,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.2325 per share.
On May 1, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $12,000 principal. We issued Asher 52,174 common shares pursuant to Rule 144 based on an agreed conversion price of $0.23 per share.
On May 2, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $15,000 principal. We issued Asher 88,235 common shares pursuant to Rule 144 based on an agreed conversion price of $0.17 per share.
On May 10, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $13,000 principal. We issued Asher 136,842 common shares pursuant to Rule 144 based on an agreed conversion price of $0.095 per share.
On May 10, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $7,440 principal. We issued Panache 60,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.124 per share.
On May 15, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,330 principal. We issued Panache 100,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0933 per share.
On May 21, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $18,500 principal. We issued Asher 205,556 common shares pursuant to Rule 144 based on an agreed conversion price of $0.09 per share.
On May 22, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,330 principal. We issued Panache 100,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.093 per share.
On May 29, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $12,000 principal. We issued Asher 133,333 common shares pursuant to Rule 144 based on an agreed conversion price of $0.09 per share.
On May 30, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,330 principal. We issued Panache 100,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.093 per share.
On June 4, 2012, Asher executed a partial debt to equity conversion of a $78,500 short-term promissory note dated October 24, 2011 in which they converted $8,000 principal and $3,140 in interest. We issued Asher 171,385 common shares pursuant to Rule 144 based on an agreed conversion price of $0.065 per share.
On June 5, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $9,920 principal. We issued Panache 160,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.062 per share.
On June 8, 2012, Asher executed a partial debt to equity conversion of a $53,000 short-term promissory note dated November 29, 2011 in which they converted $12,000 principal. We issued Asher 171,385 common shares pursuant to Rule 144 based on an agreed conversion price of $0.07 per share.
On June 12, 2012, Asher executed a partial debt to equity conversion of a $53,000 short-term promissory note dated November 29, 2011 in which they converted $14,000 principal. We issued Asher 200,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.07 per share.
On June 15, 2012, Asher executed a partial debt to equity conversion of a $53,000 short-term promissory note dated November 29, 2011 in which they converted $13,000 principal. We issued Asher 136,842 common shares pursuant to Rule 144 based on an agreed conversion price of $0.095 per share.
On June 20, 2012, Asher executed a partial debt to equity conversion of a $53,000 short-term promissory note dated November 29, 2011 in which they converted $14,000 principal and $2,120 in interest. We issued Asher 189,647 common shares pursuant to Rule 144 based on an agreed conversion price of $0.085 per share.
On July 17, 2012, Ms. Grable, our CEO and Chairman of the Board, executed a full debt to equity conversion of a $13,000 short-term promissory note in which she converted $13,000 principal and $148 in interest. We issued Ms. Grable 87,654 restricted common shares pursuant to Rule 144 based on an agreed conversion price of $0.15 per share. Ms. Grable is deemed an affiliated party.
On July 17, 2012, a private investor executed a partial debt to equity conversion of five of her notes in which she converted $19,583 principal into 200,000 restricted common shares pursuant to Rule 144 based on an agreed conversion price of $0.0885 per share.
On July 25, 2012, a private investor executed a full debt to equity conversion of a $3,000 short-term promissory note in which she converted $3,000 principal into 20,000 restricted common shares pursuant to Rule 144 based on an agreed conversion price of $0.15 per share.
On July 30, 2012, a private investor executed a partial debt to equity conversion of a $10,000 short-term promissory note in which she converted $6,900 principal into 46,000 restricted common shares pursuant to Rule 144 based on an agreed conversion price of $0.15 per share.
On August 7, 2012, a private investor sold their December 2011 short-term promissory notes totaling $21,604 in principal and $5,334 in premium to OTC Global Partners. A new short-term promissory note was issued to OTC Global Partners dated August 7, 2012 with a taking period back to December 7, 2011. OTC Global Partners may elect at an Event of Default to convert any part or all of the $21,604 Principal Amount of the Note plus accrued premium into shares of our common stock at a conversion price $0.16.
On August 7, 2012, OTC Global Partners executed a partial debt to equity conversion of the $21,604 short-term promissory note in which they converted $21,604 principal and $2,396 in premium. We issued OTC Global Partners 150,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.16 per share.
On September 5, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated September 28, 2011 in which they converted $85,582 principal. We issued Southridge 760,727 common shares pursuant to Rule 144 based on an agreed conversion price of $0.115 per share.
On September 10, 2012, Levin Consulting Group executed a partial debt to equity conversion of the $70,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $20,000 principal. We issued Levin Consulting Group 160,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.125 per share. On September 21, 2012 we issued Levin Consulting Group an additional 240,000 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On September 10, 2012, Panache executed a partial debt to equity conversion of a $100,000 short-term promissory note dated August 25, 2011 in which they converted $14,885 principal. We issued Panache 160,054 common shares pursuant to Rule 144 based on an agreed conversion price of $0.093 per share.
On September 11, 2012, Southridge executed a final debt to equity conversion of a $100,000 short-term promissory note dated September 28, 2011 in which they converted $10,418 principal and $3,004 in interest. We issued Southridge 178,958 common shares pursuant to Rule 144 based on an agreed conversion price of $0.075 per share.
On September 11, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated October 26, 2011 in which they converted $32,500 principal and $7,036 in interest. We issued Southridge 527,142 common shares pursuant to Rule 144 based on an agreed conversion price of $0.075 per share.
On September 12, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated October 26, 2011 in which they converted $4,150 principal. We issued Southridge 55,333 common shares pursuant to Rule 144 based on an agreed conversion price of $0.075 per share.
On September 12, 2012, Panache executed a partial debt to equity conversion of a $40,000 short-term promissory note dated November 21, 2011 in which they converted $23,250 principal. We issued Panache 250,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.093 per share.
On September 19, 2012, Panache executed a final debt to equity conversion of a $40,000 short-term promissory note dated November 21, 2011 in which they converted $16,750 principal and $3,244 in interest. We issued Panache 257,983 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0775 per share.
On September 20, 2012, Southridge executed a partial debt to equity conversion of a $100,000 short-term promissory note dated October 26, 2011 in which they converted $47,300 principal and $153 in interest. We issued Southridge 759,255 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0625 per share.
On September 27, 2012, OTC Global Partners executed a partial debt to equity conversion of the $30,000 short-term promissory note in which they converted $18,000 in principal. We issued OTC Global Partners 360,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.05 per share.
On September 28, 2012, Panache executed a partial debt to equity conversion of a $25,000 short-term promissory note dated February 28, 2012 in which they converted $13,200 principal. We issued Panache 240,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.055 per share.
On October 1, 2012, Southridge executed a final debt to equity conversion of a $100,000 short-term promissory note dated October 26, 2011 in which they converted $16,050 principal and $219 in interest. We issued Southridge 325,384 common shares pursuant to Rule 144 based on an agreed conversion price of $0.05 per share.
On October 1, 2012, Southridge executed a partial debt to equity conversion of a $20,000 short-term promissory note dated November 14, 2011 in which they converted $10,900 principal and $1,398 in interest. We issued Southridge 245,967 common shares pursuant to Rule 144 based on an agreed conversion price of $0.05 per share.
On October 2, 2012, Southridge executed a final debt to equity conversion of a $20,000 short-term promissory note dated November 14, 2011 in which they converted $9,100 principal and $18 in interest. We issued Southridge 182,351 common shares pursuant to Rule 144 based on an agreed conversion price of $0.05 per share.
On October 3, 2012, SGI Group executed a partial debt to equity conversion of the $30,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $9,000 principal and $106 in interest. We issued SGI Group 364,248 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On October 4, 2012, Panache executed a partial debt to equity conversion of a $25,000 short-term promissory note dated February 28, 2012 in which they converted $6,600 principal. We issued Panache 240,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0275 per share.
On October 10, 2012, FLUX Carbon Starter Fund executed a partial debt to equity conversion of a $38,500 short-term promissory note dated October 4, 2012 in which they converted $15,000 principal. We issued FLUX Carbon Starter 300,000 restricted common shares pursuant to Rule 144 based on an agreed conversion price of $0.05 per share.
On October 11, 2012, OTC Global Partners executed a final debt to equity conversion of the $30,000 short-term promissory note in which they converted $18,000 in principal. We issued OTC Global Partners 240,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.05 per share.
On October 18, 2012, Southridge executed a partial debt to equity conversion of a $17,000 short-term promissory note dated December 19, 2011 in which they converted $15,900 principal and $1,125 in interest. We issued Southridge 681,010 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On October 23, 2012, Panache executed a final debt to equity conversion of a $25,000 short-term promissory note dated February 28, 2012 in which they converted $5,200 principal and $1,512 in interest. We issued Panache 244,061 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0275 per share.
On October 24, 2012, Levin Consulting Group executed a partial debt to equity conversion of the $70,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $12,200 principal and $214 in interest. We issued Levin Consulting Group 496,417 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On October 24, 2012, SGI Group executed a partial debt to equity conversion of the $30,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $5,100 principal and $88 in interest. We issued SGI Group 207,528 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On November 6, 2012, Southridge executed a final debt to equity conversion of a $17,000 short-term promissory note dated December 19, 2011 in which they converted $1,100 principal and $26 in interest. We issued Southridge 45,043 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On November 6, 2012, Southridge executed a debt to equity conversion of a $30,000 short-term promissory note dated March 19, 2012 in which they converted $30,000 principal and $1,433 in interest. We issued Southridge 1,257,337 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On November 6, 2012, Southridge executed a partial debt to equity conversion of an $11,000 short-term promissory note dated April 9, 2012 in which they converted $2,750 principal and $475 in interest. We issued Southridge 128,998 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On November 21, 2012, Southridge executed a final debt to equity conversion of an $11,000 short-term promissory note dated April 9, 2012 in which they converted $8,250 principal and $53 in interest. We issued Southridge 332,122 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On November 21, 2012, Southridge executed a debt to equity conversion of a $2,500 short-term promissory note dated April 26, 2012 in which they converted $2,500 principal and $111 in interest. We issued Southridge 1,104,427 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On November 21, 2012, Southridge executed a debt to equity conversion of an $8,000 short-term promissory note dated May 15, 2012 in which they converted $8,000 principal and $321 in interest. We issued Southridge 332,835 common shares pursuant to Rule 144 based on an agreed conversion price of $0.025 per share.
On December 18, 2012, Levin Consulting Group executed a partial debt to equity conversion of the $70,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $10,000 principal and $315 in interest. We issued Levin Consulting Group 1,085,800 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0095 per share. On January 10, 2013 we issued Levin Consulting Group an additional 633,383 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On December 18, 2012, SGI Group executed a partial debt to equity conversion of the $30,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $10,000 principal and $315 in interest. We issued SGI Group 1,085,800 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0095 per share.
On December 21, 2012, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $9,329 principal. We issued WHC Capital LLC 982,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0095 per share.
On January 8, 2013, ASC Recap executed a partial debt to equity conversion of the $180,769 balance of a short-term promissory originally dated December 15, 2009 and purchased on December 12, 2012 from a private investor, in which they converted $11,115 principal. We issued ASC Recap 1,852,500 common shares pursuant to Rule 144 based on an agreed conversion price of $0.006 per share.
On January 8, 2013, SGI Group executed a partial debt to equity conversion of the $30,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $5,900 principal and $4,400 in interest. We issued SGI Group 1,716,672 common shares pursuant to Rule 144 based on an agreed conversion price of $0.006 per share.
On January 10, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $10,000 principal. We issued Magna 1,554,002 common shares pursuant to Rule 144 based on an agreed conversion price of $0.006435 per share.
On January 15, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $5,945 principal. We issued WHC Capital LLC 1,033,900 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00575 per share.
On January 18, 2013, ASC Recap executed a partial debt to equity conversion of the $180,769 balance of a short-term promissory originally dated December 15, 2009 and purchased on December 12, 2012 from a private investor, in which they converted $11,100 principal. We issued ASC Recap 1,850,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.006 per share.
On January 18, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $13,600 principal. We issued Magna 1,766,234 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0077 per share.
On January 23, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $12,500 principal. We issued Redwood 2,192,982 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0057 per share.
On January 28, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $4,726 in principal and $5,019 in premium. We issued WHC Capital LLC 1,949,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.005 per share.
On January 28, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $9,900 principal. We issued Magna 1,766,234 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0055 per share.
On January 28, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $12,500 principal. We issued Redwood 2,272,727 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0055 per share.
On February 1, 2013, Levin Consulting Group executed a partial debt to equity conversion of the $70,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $7,000 principal and $248 in interest. We issued Levin Consulting Group 1,767,771 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0041 per share.
On February 1, 2013, SGI Group executed a partial debt to equity conversion of the $30,000 short-term promissory note originally dated
October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $2,857 in interest. We issued SGI Group 696,878 common shares pursuant to Rule 144 based on an agreed conversion price of $0.006 per share. On February 11, 2013 we issued SGI Group an additional 446,002 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On February 6, 2013, Southridge executed a debt to equity conversion of a $6,672 short-term promissory note dated June 18, 2012 in which they converted $6,672 principal and $338 in interest. We issued Southridge 2,046,658 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00343 per share.
On February 6, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $6,500 principal. We issued Magna 4,166,667 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00156 per share.
On February 6, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $5,843 in premium. We issued WHC Capital LLC 2,050,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00285 per share.
On February 6, 2013, ASC Recap executed a partial debt to equity conversion of the $180,769 balance of a short-term promissory originally dated December 15, 2009 and purchased on December 12, 2012 from a private investor, in which they converted $5,375 principal. We issued ASC Recap 1,628,788 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0033 per share.
On February 6, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $3,500 principal. We issued Redwood 2,121,212 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00165 per share.
On February 12, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $5,000 principal. We issued Redwood 3,030,303 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00165 per share.
On February 12, 2013, Southridge executed a partial debt to equity conversion of a $25,000 short-term promissory note dated August 2, 2012 in which they converted $7,475 principal and $1,058 in interest. We issued Southridge 4,162,212 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00205 per share.
On February 14, 2013, Southridge executed a partial debt to equity conversion of a $25,000 short-term promissory note dated August 2, 2012 in which they converted $2,185 principal and $11 in interest. We issued Southridge 1,626,636 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00135 per share.
On February 15, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $6,100 principal. We issued Magna 6,931,819 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00088 per share.
On February 18, 2013, Black Arch executed a partial debt to equity conversion of a $95,000 Promissory Note originally dated August 15, 2012 which they purchased $15,000 Principal from Southridge on February 11, 2013, in which they converted $7,500 principal. We issued Black Arch 5,555,556 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00135 per share.
On February 19, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $4,083 in premium. We issued WHC Capital LLC 3,711,600 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0011 per share.
On February 20, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $3,400 principal. We issued Redwood 3,863,636 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00088 per share.
On February 20, 2013, a private investor executed a partial debt to equity conversion of a $95,000 Promissory Note originally dated August 15, 2012 which they purchased $5,000 Principal from Southridge on February 11, 2013, in which they converted $3,000 principal. We issued the private investor 2,736,273 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0011 per share.
On February 22, 2013, Southridge executed a partial debt to equity conversion of a $25,000 short-term promissory note dated August 2, 2012 in which they converted $6,325 principal and $49 in interest. We issued Southridge 5,794,832 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0011 per share.
On February 26, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $3,500 principal. We issued Redwood 3,977,272 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00088 per share.
On February 27, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $10,800 in premium. We issued WHC Capital LLC 12,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0009 per share.
On March 5, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $3,950 principal. We issued Redwood 4,488,636 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00088 per share.
On March 5, 2013, Black Arch executed a final debt to equity conversion of a $95,000 Promissory Note originally dated August 15, 2012 which they purchased $15,000 Principal from Southridge on February 11, 2013, in which they converted $7,500 principal and $44 in interest. We issued Black Arch 8,382,648 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0009 per share. On March 21, 2013 we issued Black Arch Group an additional 3,224,096 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On March 5, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $6,100 principal. We issued Magna 6,931,819 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00088 per share.
On March 5, 2013, Southridge executed a partial debt to equity conversion of a $25,000 short-term promissory note dated August 2, 2012 in which they converted $4,865 principal and $60 in interest. We issued Southridge 5,794,440 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00085 per share.
On March 7, 2013, a private investor executed a partial debt to equity conversion of a $95,000 Promissory Note originally dated August 15, 2012 which they purchased $5,000 Principal from Southridge on February 11, 2013, in which they converted $2,000 principal and $11 in interest. We issued the private investor 2,365,882 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00085 per share.
On March 13, 2013, Southridge executed a final debt to equity conversion of a $25,000 short-term promissory note dated August 2, 2012 in which they converted $4,150 principal. We issued Southridge 6,384,615 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00065 per share.
On March 13, 2013, Southridge executed a partial debt to equity conversion of a $30,000 short-term promissory note dated September 5, 2012 in which they converted $4,755 principal and $1,243 in interest. We issued Southridge 9,227,292 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00065 per share.
On March 13, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $4,620 principal. We issued Magna 7,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00066 per share.
On March 13, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $6,400 principal. We issued Redwood 8,311,688 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00077 per share.
On March 13, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $46,400 short-term promissory note originally dated December 10, 2010 and purchased on August 20, 2012 from a private investor, in which they converted $656 premium and $643 in interest. We issued WHC Capital LLC 1,998,308 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00065 per share.
On March 14, 2013, SGI Group executed a partial debt to equity conversion of a $95,000 Promissory Note originally dated August 15, 2012 which they purchased $10,000 Principal from Southridge on February 11, 2013, in which they converted $6,700 principal and $70 in interest. We issued SGI Group 10,416,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00065 per share.
On March 14, 2013, Levin Consulting Group executed a partial debt to equity conversion of the $70,000 short-term promissory note originally dated October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $6,500 principal and $294 in interest. We issued Levin Consulting Group 10,452,215 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00065 per share.
On March 20, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $5,250 principal. We issued Redwood 8,750,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0006 per share.
On March 20, 2013, Panache executed a partial debt to equity conversion of a $25,000 short-term promissory note dated September 6, 2012 in which they converted $3,900 principal. We issued Panache 6,500,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0006 per share.
On March 21, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $3,616 principal. We issued Tangiers 6,026,789 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0006 per share.
On March 22, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $5,005 principal. We issued Magna 7,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000715 per share.
On March 27, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $7,049 principal. We issued Tangiers 12,817,145 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00055 per share.
On April 1, 2013, Southridge executed a partial debt to equity conversion of a $30,000 short-term promissory note dated September 5, 2012 in which they converted $14,990 principal and $66 in interest. We issued Southridge 23,163,689 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00065 per share.
On April 1, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $5,500 principal. We issued Redwood 9,166,667 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0006 per share.
On April 2, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $4,628 principal. We issued Tangiers 9,256,920 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0005 per share.
On April 4, 2013, WHC Capital LLC executed a partial debt to equity conversion of the $10,000 short-term promissory note originally dated November 20, 2009 and purchased on March 22, 2013 from a private investor, in which they converted $6,864 in premium. We issued WHC Capital LLC 17,160,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.004 per share.
On April 5, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $8,169 principal. We issued Tangiers 32,676,600 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0005 per share.
On April 5, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $2,600 principal. We issued Redwood 9,454,545 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000275 per share.
On April 5, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $4,015 principal. We issued Magna 14,600,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000275 per share.
On April 8, 2013, Southridge executed a partial debt to equity conversion of a $30,000 short-term promissory note dated September 5, 2012 in which they converted $9,240 principal and $25 in interest. We issued Southridge 23,161,811 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0004 per share. On April 24, 2013 we issued Southridge an additional 13,897,087 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On April 9, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $4,380 principal. We issued Magna 19,909,091 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00022 per share.
On April 9, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $7,626 principal. We issued Tangiers 38,129,900 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0002 per share.
On April 15, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $7,577 principal. We issued Tangiers 50,513,800 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00015 per share.
On April 18, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $3,200 principal. We issued Redwood 29,090,909 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00011 per share.
On April 19, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $6,600 principal. We issued Magna 60,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00011 per share.
On April 19, 2013, Panache executed a partial debt to equity conversion of a $25,000 short-term promissory note dated September 6, 2012 in which they converted $5,920 principal. We issued Panache 59,200,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0006 per share.
On April 22, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $5,396 principal. We issued Tangiers 53,964,900 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001 per share.
On April 23, 2013, Levin Consulting Group executed a partial debt to equity conversion of the $70,000 short-term promissory note originally dated October 12, 2011
and purchased on August 20, 2012 from Southridge, in which they converted $6,500 principal and $349 in interest. We issued Levin Consulting Group 68,493,200 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001 per share.
On April 23, 2013, SGI Group executed a final debt to equity conversion of a $95,000 Promissory Note originally dated August 15, 2012 which they purchased $10,000 Principal from Southridge on February 11, 2013, in which they converted $3,300 principal and $85 in interest. We issued SGI Group 33,853,200 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001 per share.
On April 24, 2013 we issued SGI Group an additional 33,835,200 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On April 23, 2013, SGI Group executed a partial debt to equity conversion of a $15,000 short-term promissory note dated August 20, 2012 in which they converted $3,250 principal and $220 in interest. We issued SGI Group 34,698,300 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001 per share.
On April 24, 2013 we issued SGI Group an additional 34,698,300 shares because the closing bid price on the clearing date fell below the Initial closing bid price.
On April 24, 2013, Southridge executed a final debt to equity conversion of a $30,000 short-term promissory note dated September 5, 2012 in which they converted $1,015 principal and $2 in interest. We issued Southridge 5,086,123 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0002 per share.
On April 24, 2013, Southridge executed a partial debt to equity conversion of a $30,000 short-term promissory note dated September 19, 2012 in which they converted $3,485 principal and $1,427 in interest. We issued Southridge 49,118,493 common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001 per share.
On April 24, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $4,300 principal. We issued Redwood 39,090,909 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00011 per share.
On April 26, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $4,000 principal. We issued Tangiers 79,995,200 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
On April 29, 2013, Linda Grable,
our CEO and Chairman of the Board,
executed a debt to equity conversion of an $8,000 short-term promissory note dated April 1, 2013 in which she converted $8,000 principal. We issued Linda Grable 80,000,000
restricted
common shares pursuant to Rule 144 based on an agreed conversion price of $0.0001 per share.
Ms. Grable is deemed an affiliated party.
On April 30, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $6,600 principal. We issued Magna 120,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000055 per share.
On April 30, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $5,485 principal. We issued Tangiers 109,696,200 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
On May 3, 2013, WHC Capital LLC executed a final debt to equity conversion of the $10,000 short-term promissory note originally dated November 20, 2009 and purchased on March 22, 2013 from a private investor, in which they converted $3,136 in premium and $56 in interest. We issued WHC Capital LLC 63,847,600 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
On May 6, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $6,633 principal. We issued Tangiers 132,663,600 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
On May 8, 2013, Southridge executed a partial debt to equity conversion of a $30,000 short-term promissory note dated September 19, 2012 in which they converted $4,065 principal and $46 in interest. We issued Southridge 82,229,841 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
On May 9, 2013, Redwood executed a partial debt to equity conversion of a $100,000 Promissory Note originally dated December 14, 2009 which they purchased from a private investor on January 18, 2013, in which they converted $3,998 principal. We issued Redwood 79,960,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
On May 9, 2013, Magna executed a partial debt to equity conversion of the $100,000 Promissory Note originally dated December 10, 2009 which was issued as a new Convertible Promissory Note to Magna on January 3, 2013 in which they converted $11,000 principal. We issued Magna 200,000,000 common shares pursuant to Rule 144 based on an agreed conversion price of $0.000055 per share.
On May 10, 2013, Tangiers Capital LLC executed a partial debt to equity conversion of the $57,600 Promissory Note originally dated January 12, 2012 which was issued as a new $75,969 Convertible Promissory Note to Tangiers on March 20, 2013 in which they converted $9,221 principal. We issued Tangiers 184,425,800 common shares pursuant to Rule 144 based on an agreed conversion price of $0.00005 per share.
All debt conversions were consummated at the contractual terms agreed upon for each loan. Accordingly, there was no gain/loss on conversions.
From January 2011 to April 2011, Southridge acquired promissory notes from a private investor totaling $800,000 in principal and 110,728 shares of common stock which were issued as collateral. Southridge proposed that we amend the conversion terms of the notes permitting the holder to convert the notes and we agreed to the amendment. From January 12, 2011 to May 18, 2012, Southridge issued notices of conversion to settle $700,000 in principal plus accrued premiums totaling $395,699 into 810,406 shares of our common stock, of which 103,606 shares were collateral shares and 706,800 new shares were issued pursuant to Rule 144.
As of the date of this report, we owe a total of
$1,760,386
of short term debt of which
$1,129,436
is principal,
$571,018
is accrued premium and
$59,931
is accrued interest. We have repaid aggregate principal and premium in the amount of $173,376 on these short-term notes and a total of
$2,964,632
principal,
$450,830
in premium, and
$91,701
in interest has been converted into
2,159,559,970
shares of our common stock of which 103,606 shares were collateral shares and
2,159,559,970
new shares were issued pursuant to Rule 144. Out of the original 103,606 shares of common stock held as collateral, a balance of 7,122 shares remains on the $85,985 principal of the remaining notes.
There can be no assurances that we will be able to pay our short-term loans when due. If we default on any or all of the notes due to the lack of new funding, the holders could exercise their right to sell the remaining 103,606 collateral shares and could take legal action to collect the amount due which could materially adversely affect IDSI and the value of our stock.
Long-Term Loans
On February 23, 2011, we entered into a Convertible Promissory Note Agreement with an unaffiliated third party, JMJ Financial (the "Lender" or "JMJ"), relating to a private placement of a total of up to $1,800,000 in principal amount of a Convertible Promissory Note (the "Note") providing for advances of a gross amount of $1,600,000 in seven tranches. Pursuant to the terms of a Registration Rights Agreement (the "Rights Agreement") dated February 23, 2011, between the Company and JMJ, we are required to file within 10 days from the effective date of an increase of authorized shares approved by our shareholders, an S-1 Registration Statement (the "Registration Statement") covering 130,000,000 shares of Company common stock to be reserved for conversion of the Note.
Although our shareholders on July 12, 2011, voted to increase our authorized shares to 2,000,000,000, we have not filed the registration statement as required by the Rights Agreement.
The Note provides for funding in seven tranches as stipulated in the Funding Schedule attached. The first tranche of $300,000 was closed on February 24, 2011, and we received $258,000 after deductions of $30,000 for a 10% Finder's Fee and $12,000 for an Origination Fee. The second tranche of $100,000 closed on May 20, 2011, and we received $93,000 after deduction of $7,000 for a 7% Finder's Fee. A partial closing on the third tranche of $35,000 closed on October 7, 2011 and we received $32,250 after deduction of $2,750 for a 7% Finder's Fee. A partial closing on the third tranche of $25,000 closed on February 8, 2012 and we received $25,000. In connection with this partial third tranche we will pay a 7% Finder's Fee, which is $1,750. A partial closing on the third tranche of $25,000 closed on February 29, 2012 and we received $25,000. In connection with this partial third tranche we will pay a 7% Finder's Fee, which is $1,750. A final closing on the third tranche of $15,000 closed on April 4, 2012 and we received $15,000. In connection with this final third tranche we will pay a 7% Finder's Fee, which is $1,050. A partial closing on the fourth tranche of $10,000 closed on October 3, 2012 and we received $10,000. In connection with this partial fourth tranche we will pay a 7% Finder's Fee, which is $700. Although we are not being funded based on the on achievement of milestones relating to the Registration Statement, we continue to draw funds from the Promissory Note from time to time based on the lender's ability to fund us. For the remaining three tranches, we are obligated to pay a Finder's Fee equal to 7% in cash at each closing date. We may cancel the unfunded portion of the Agreement at a fee of 20% of the unfunded amount. As of the date of this report, $1,290,000 in principal amount remains unfunded and if we choose to cancel we will have to pay JMJ $258,000 to terminate the agreement.
The Note, after the seven tranches are drawn, would generate net proceeds of $1,467,000 after payment of the Origination Fee and a 7% Finder's Fee. JMJ has the option to provide an additional $1,600,000 of funding on substantially the same terms as the first Agreement; however, we have the right to cancel, without penalty, the Note Agreement within five days of JMJ's execution. Once executed and accepted by both parties and five days has passed, cancellation of unfunded payments is permitted at a fee of 20% of the unfunded amount. Cancellation of funded portions is not permitted.
The funding schedule of the seven tranches is as follows:
§
|
$300,000 paid to Borrower within 2 business days of execution and closing of the agreement.
|
§
|
$100,000 paid to Borrower within 5 business days of filing of Definitive Proxy to increase authorized shares to 2,000,000,000 or more.
|
§
|
$100,000 paid to Borrower within 5 business days of effective increase in authorized shares to 2,000,000,000 or more.
|
§
|
$100,000 paid to Borrower within 5 business days of filing of registration statement, and that registration statement must be filed no later than 10 days from the effective increase of authorized shares.
|
§
|
$400,000 paid to Borrower within 5 business days of notice of effective registration statement, and that registration statement must be effective no later than 120 days from the execution of the agreement.
|
§
|
$300,000 paid to Borrower within 90 business days of notice of effective registration statement, and that registration statement must be effective no later than 120 days from the execution of the agreement.
|
§
|
$300,000 paid to Borrower within 150 business days of notice of effective registration statement, and that registration statement must be effective no later than 120 days from the execution of the agreement.
|
The conditions to funding each payment are as follows:
§
|
At the time of each payment interval, the Conversion Price calculation on Borrower's common stock must yield a Conversion Price equal to or greater than $0.015 per share (based on the Conversion Price calculation, regardless of whether a conversion is actually completed or not).
|
§
|
At the time of each payment interval, the total dollar trading volume of Borrower's common stock for the previous 23 trading days must be equal to or greater than $1,000,000. The total dollar volume will be calculated by removing the three highest dollar volume days and summing the dollar volume for the remaining 20 trading days.
|
§
|
At the time of each payment interval, there shall not exist an event of default as described within any of the agreements between Borrower and Holder.
|
Prior to the maturity date of February 2, 2014, JMJ may convert both principal and interest into our common stock at 75% of the average of the three lowest closing prices in the 20 days previous to the conversion. We have the right to enforce a conversion floor of $0.015 per share; however, if we receive a conversion notice in which the Conversion Price is less than $0.015 per share, JMJ will incur a conversion loss [(Conversion Loss = $0.015 – Conversion Price) x number of shares being converted] which we must make whole by either of the following options: pay the conversion loss in cash or add the conversion loss to the balance of principal due. Prepayment of the Note is not permitted.
The Note has a 9% one-time interest charge on the principal sum. No interest or principal payments are required until the Maturity Date, but both principal and interest may be included in conversions prior to the maturity date.
On August 24, 2011, JMJ executed a debt to equity conversion of $36,015 in principal of the first tranche of $300,000 which we closed on February 24, 2011. We issued JMJ 7,000 common shares pursuant to Rule 144 based on a conversion price of $5.15 per share.
On August 31, 2011, JMJ executed a debt to equity conversion of $41,160 in principal of the first tranche of $300,000 which we closed on February 24, 2011. We issued JMJ 8,000 common shares pursuant to Rule 144 based on a conversion price of $5.15 per share.
On September 15, 2011, JMJ executed a debt to equity conversion of $37,597 in principal of the first tranche of $300,000 which we closed on February 24, 2011. We issued JMJ 8,200 common shares pursuant to Rule 144 based on a conversion price of $4.59 per share.
On September 28, 2011, JMJ executed a debt to equity conversion of $40,950 in principal of the first tranche of $300,000 which we closed on February 24, 2011. We issued JMJ 10,000 common shares pursuant to Rule 144 based on a conversion price of $4.10 per share.
On October 12, 2011, JMJ executed a debt to equity conversion of $36,750 in principal of the first tranche of $300,000 which we closed on February 24, 2011. We issued JMJ 10,000 common shares pursuant to Rule 144 based on a conversion price of $3.68 per share.
On December 15, 2011, JMJ executed a debt to equity conversion of $63,840 in principal of the first tranche of $300,000 which we closed on February 24, 2011. We issued JMJ 40,000 common shares pursuant to Rule 144 based on a conversion price of $1.60 per share.
On January 24, 2012, JMJ executed a debt to equity conversion totaling $44,100 of which $43,688 was principal and $412 was consideration for the first tranche of $300,000, which we closed on February 24, 2011. We issued JMJ 60,000 common shares pursuant to Rule 144 based on a conversion price of $0.74 per share.
On February 9, 2012, JMJ executed a debt to equity conversion totaling $44,100 of which $37,088 was consideration and $7,012 was interest for the first tranche of $300,000, which we closed on February 24, 2011. We issued JMJ 70,000 common shares pursuant to Rule 144 based on a conversion price of $0.63 per share.
On February 29, 2012, JMJ executed a debt to equity conversion totaling $39,550 of which $19,988 was interest for the first tranche of $300,000, which we closed on February 24, 2011 and $19,562 was principal for the second tranche of $100,000, which we closed on May 20, 2011. We issued JMJ 100,000 common shares pursuant to Rule 144 based on a conversion price of $0.40 per share.
On April 24, 2012, JMJ executed a debt to equity conversion of $29,120 in principal of the second tranche of $100,000 which we closed on May 20, 2012. We issued JMJ 104,000 common shares pursuant to Rule 144 based on a conversion price of $0.28 per share.
On May 9, 2012, JMJ executed a debt to equity conversion of $28,980 in principal of the second tranche of $100,000 which we closed on May 20, 2012. We issued JMJ 138,000 common shares pursuant to Rule 144 based on a conversion price of $0.21 per share.
On May 14, 2012, JMJ executed a debt to equity conversion of $4,389 in principal of the second tranche of $100,000 which we closed on May 20, 2011. We issued JMJ 38,000 common shares pursuant to Rule 144 based on a conversion price of $0.12 per share.
On May 24, 2012, JMJ executed a debt to equity conversion of $22,260 in principal of the second tranche of $100,000 which we closed on May 20, 2011. We issued JMJ 212,000 common shares pursuant to Rule 144 based on a conversion price of $0.11 per share.
On May 31, 2012, JMJ executed a debt to equity conversion of $2,940 in principal of the second tranche of $100,000 which we closed on May 20, 2011. We issued JMJ 28,000 common shares pursuant to Rule based on a conversion price of $0.11 per share.
On June 6, 2012, JMJ executed a debt to equity conversion totaling $19,551 of which $14,249 was interest for the second tranche of $100,000, which we closed on May 20, 2011 and $5,302 was principal for the third tranche of $35,000, which we closed on October 7, 2011. We issued JMJ 210,000 common shares pursuant to Rule 144 based on a conversion price of $0.093 per share.
On September 7, 2012, JMJ executed a debt to equity conversion of $19,572 in principal of the third tranche of $35,000, which we closed on October 7, 2011. We issued JMJ 240,000 common shares pursuant to Rule 144 based on a conversion price of $0.082 per share.
On October 3, 2012, JMJ executed a debt to equity conversion totaling $42,000 of which $14,501 was principal and $3,150 was interest for the third tranche of $35,000, which we closed on October 7, 2011; and $24,349 was principal of the fourth tranche of $25,000, which we closed on February 8, 2012. We issued JMJ 600,000 common shares pursuant to Rule 144 based on a conversion price of $0.07 per share.
On October 24, 2012, JMJ executed a debt to equity conversion totaling $10,500 of which $3,776 was principal and $2,250 was interest for the fourth tranche of $25,000, which we closed on February 8, 2012; and $4,474 was
principal of the fifth tranche of $25,000, which we closed on February 29, 2012. We issued JMJ 300,000 common shares pursuant to Rule 144 based on a conversion price of $0.035 per share.
On January 16, 2013, JMJ executed a debt to equity conversion of $7,455 in principal of the fifth tranche of $25,000, which we closed on February 29, 2012. We issued JMJ 895,000 common shares pursuant to Rule 144 based on a conversion price of $0.00833 per share.
On January 29, 2013, JMJ executed a debt to equity conversion of $6,334 in principal of the fifth tranche of $25,000, which we closed on February 29, 2012. We issued JMJ 890,000 common shares pursuant to Rule 144 based on a conversion price of $0.007117 per share.
On February 11, 2013, JMJ executed a debt to equity conversion of $10,083 in principal of the fifth tranche of $25,000, which we closed on February 29, 2012. We issued JMJ 2,900,000 common shares pursuant to Rule 144 based on a conversion price of $0.003477 per share.
On February 20, 2013, JMJ executed a debt to equity conversion of $2,028 in principal of the fifth tranche of $25,000, which we closed on February 29, 2012; and $3,335 in principal of the sixth tranche of $15,000, which we closed on April 5, 2012. We issued JMJ 2,910,000 common shares pursuant to Rule 144 based on a conversion price of $0.001843 per share.
On February 27, 2013, JMJ executed a debt to equity conversion of $5,226 in principal of the sixth tranche of $15,000, which we closed on April 5, 2012. We issued JMJ 3,500,000 common shares pursuant to Rule 144 based on a conversion price of $0.001493 per share.
On March 5, 2013, JMJ executed a debt to equity conversion of $7,425 in principal of the sixth tranche of $15,000, which we closed on April 5, 2012. We issued JMJ 5,400,000 common shares pursuant to Rule 144 based on a conversion price of $0.001377 per share.
On March 5, 2013, JMJ executed a debt to equity conversion of $2,229 in principal and interest of the sixth tranche of $15,000, which we closed on April 5, 2012; and $5,625 was the balance owed of consideration on the principal from the prior six tranches. We issued JMJ 7,829,800 common shares pursuant to Rule 144 based on a conversion price of $0.001003 per share.
All debt conversions were consummated at the contractual terms agreed upon for each loan. Accordingly, there was no gain/loss on conversions.
As of the date of this report, we owe a total of
$12,263
in long-term debt. Of the
$12,263
we owe a total of
$10,000
in principal,
$1,250
is consideration on the principal and
$1,013
is interest.
As of the date of this report, if all of the outstanding convertible promissory notes totaling $1,772,649 were converted based on the closing bid price of $0.0001, we would be required to issue approximately 25 billion shares. Based on the 2,124,402,540 current issued and outstanding shares and our current authorized of 10 billion shares, we would require an additional 17 billion authorized shares to satisfy the potential conversions.
There can be no assurance that adequate financing will be available to us when needed, or if available, will be available on acceptable terms. Insufficient funds may prevent us from implementing our business plan or may require us to delay, scale back, or eliminate certain of our research and product development programs or to license to third parties rights to commercialize products or technologies that we would otherwise seek to develop ourselves. To the extent that we utilize our Private Equity Credit Agreements, or additional funds are raised by issuing equity securities, especially convertible preferred stock and convertible debentures, dilution to existing shareholders will result and future investors may be granted rights superior to those of existing shareholders. Moreover, substantial dilution may result in a change in our control.
3.27
|
Articles of Amendment-Certificate of Designation of Series Q Preferred Stock filed with the Florida Department of State on March 16, 2012. Incorporated by reference to our Form 8-K filed on March 26, 2012.
|
10.78
|
Agreement of Sale by and between Imaging Diagnostic Systems, Inc. and Superfun B.V. dated September 13, 2007 including Form of Lease Agreement (Exhibit D). Incorporated by reference to our Form 8-K filed on September 13, 2007.
|
10.79
|
Lease Agreement by and between Bright Investments, LLC ("Landlord") and Imaging Diagnostic Systems, Inc. ("Tenant") dated March 14, 2008. Incorporated by reference to our Form 8-K filed on April 3, 2008.
|
10.80
|
Consulting Agreement between Imaging Diagnostic Systems, Inc. and Tim Hansen dated as of January 1, 2008. Incorporated by reference to our Form 8-K filed on December 27, 2007.
|
10.81
|
Sixth Private Equity Credit Agreement between IDSI and Charlton Avenue LLC dated April 21, 2008 without exhibits. Incorporated by reference to our Form 8-K filed on April 21, 2008.
|
10.82
|
Two-Year Employment Agreement dated as of April 16, 2008 between Imaging Diagnostic Systems, Inc. and Linda B. Grable, Chairman of the Board and Interim Chief Executive Officer. Incorporated by reference to our Form 8-K filed on May 5, 2008.
|
10.83
|
Stock Option Agreement dated as of August 30, 2007 between Imaging Diagnostic Systems, Inc. and Linda B. Grable, Chairman of the Board and Interim Chief Executive Officer. Incorporated by reference to our Form 8-K filed on May 5, 2008.
|
10.84
|
Business Lease Agreement by and between Ft. Lauderdale Business Plaza Associates ("Lessor") and Imaging Diagnostic Systems, Inc. ("Lessee") dated June 2, 2008. Incorporated by reference to our Form 8-K filed on June 5, 2008.
|
10.85
|
Financial Services Agreement by and between Imaging Diagnostic Systems, Inc. (the "Company" or "IDSI") and R.H. Barsom Company, Inc. (the "Consultant") dated July 15, 2008. Incorporated by reference to our Form 8-K filed on July 18, 2008.
|
10.86
|
Securities Purchase Agreement by and between Imaging Diagnostic Systems, Inc. (the "Company" or "IDSI") and Whalehaven Capital Fund Limited (the "Purchaser" and collectively, the "Purchasers") dated July 31, 2008. Incorporated by reference to our Form 8-K filed on August 5, 2008.
|
10.87
|
Form of 8% Senior Secured Convertible Debenture, Exhibit A. Incorporated by reference to our Form 8-K filed on August 5, 2008.
|
10.88
|
Registration Rights Agreement, Exhibit B. Incorporated by reference to our Form 8-K filed on August 5, 2008.
|
10.89
|
Common Stock Purchase Warrant, Exhibit C. Incorporated by reference to our Form 8-K filed on August 5, 2008.
|
10.90
|
Form of Legal Opinion, Exhibit D. Incorporated by reference to our Form 8-K filed on August 5, 2008.
|
10.91
|
Security Agreement, Exhibit E. Incorporated by reference to our Form 8-K filed on August 5, 2008.
|
10.92
|
Amendment Agreement by and between Imaging Diagnostic Systems, Inc. (the "Company" or "IDSI") and Whalehaven Capital Fund Limited (the "Purchaser" and collectively, the "Purchasers") dated October 23, 2008. Incorporated by reference to our Form 8-K filed on October 23, 2008.
|
10.93
|
Securities Purchase Agreement by and between Imaging Diagnostic Systems, Inc. (the "Company" or "IDSI") and Whalehaven Capital Fund Limited (the "Purchasers") dated November 20, 2008. Incorporated by reference to our Form 8-K filed on November 26, 2008.
|
10.94
|
Form of 8% Senior Secured Convertible Debenture, Exhibit A. Incorporated by reference to our Form 8-K filed on November 26, 2008.
|
10.95
|
Registration Rights Agreement, Exhibit B. Incorporated by reference to our Form 8-K filed on November 26, 2008.
|
10.96
|
Form of Legal Opinion, Exhibit D. Incorporated by reference to our Form 8-K filed on November 26, 2008.
|
10.97
|
Security Agreement, Exhibit E. Incorporated by reference to our Form 8-K filed on November 26, 2008.
|
10.98
|
Amendment Agreement by and among Imaging Diagnostic Systems, Inc., Whalehaven Capital Fund Limited, and Alpha Capital Anstalt dated as of December 10, 2008. Incorporated by reference to our Form 8-K filed on December 12, 2008.
|
10.99
|
Amendment Agreement by and among Imaging Diagnostic Systems, Inc., Whalehaven Capital Fund Limited, and Alpha Capital Anstalt dated as of December 31, 2008. Incorporated by reference to our Form 8-K filed on January 5, 2009.
|
10.100
|
Amendment Agreement (Revised) by and among Imaging Diagnostic Systems, Inc., Whalehaven Capital Fund Limited, and Alpha Capital Anstalt dated as of December 31, 2008. Incorporated by reference to our Form 8-K/A filed on January 7, 2009.
|
10.101
|
Amendment Agreement by and among Imaging Diagnostic Systems, Inc., Whalehaven Capital Fund Limited, and Alpha Capital Anstalt dated as of March 20, 2009. Incorporated by reference to our Form 8-K filed on March 26, 2009.
|
10.102
|
One-Year Employment and Stock Option Agreement dated March 23, 2009 between Imaging Diagnostic Systems, Inc. and Linda B. Grable, Chief Executive Officer. Incorporated by reference to our Form 8-K filed on March 27, 2009.
|
10.103
|
One-Year Employment and Stock Option Agreement dated March 23, 2009 between Imaging Diagnostic Systems, Inc. and Allan L. Schwartz, Executive Vice President and Chief Financial Officer. Incorporated by reference to our Form 8-K filed on March 27, 2009.
|
10.104
|
Private Equity Credit Agreement between Imaging Diagnostic Systems, Inc. and Southridge Partners II LP dated November 23, 2009. Incorporated by reference to our Form 8-K filed on November 25, 2009.
|
10.105
|
Registration Rights Agreement between Imaging Diagnostic Systems, Inc. and Southridge Partners II LP dated November 23, 2009. Incorporated by reference to our Form 8-K filed on November 25, 2009.
|
10.106
|
Private Equity Credit Agreement (Amended) between Imaging Diagnostic Systems, Inc. and Southridge Partners II LP dated January 7, 2010. Incorporated by reference to our Form S-1 filed on January 12, 2010.
|
10.107
|
Registration Rights Agreement (Amended) between Imaging Diagnostic Systems, Inc. and Southridge Partners II LP dated January 7, 2010. Incorporated by reference to our Form S-1 filed on January 12, 2010.
|
10.108
|
Employment Agreement and Stock Option Agreement dated March 22, 2010, between Imaging Diagnostic Systems, Inc. and Linda B. Grable, Chief Executive Officer. Incorporated by reference to our Form 8-K filed on March 25, 2010.
|
10.109
|
Employment Agreement and Stock Option Agreement dated March 22, 2010, between Imaging Diagnostic Systems, Inc. and Allan L. Schwartz, Executive Vice President and Chief Financial Officer. Incorporated by reference to our Form 8-K filed on March 25, 2010.
|
10.110
|
Employment Agreement and Stock Option Agreement dated March 22, 2010, between Imaging Diagnostic Systems, Inc. and Deborah O'Brien, Senior Vice-President. Incorporated by reference to our Form 8-K filed on March 25, 2010.
|
10.111
|
2010 Non-Statutory Stock Option Plan dated March 11, 2010. Incorporated by reference to our Form S-1 Amendment No. 1 filed on May 24, 2010.
|
10.112
|
Convertible Promissory Note by and between Imaging Diagnostic Systems, Inc. (the "Company" or "Borrower") and JMJ Financial (the "Lender or "JMJ'') dated February 23, 2011, Exhibit A. Incorporated by reference to our Form 8-K/A filed on March 2, 2011.
|
10.113
|
Letter Addendum to Promissory Note dated February 23, 2011, Exhibit B. Incorporated by reference to our Form 8-K/A filed on March 2, 2011.
|
10.114
|
Registration Rights Agreement dated February 23, 2011, Exhibit C. Incorporated by reference to our Form 8-K/A filed on March 2, 2011.
|
10.115
|
Patent Licensing Agreement, originally filed as Exhibit 10.2 to Form S-2 on July 21, 1998 as a text document. Incorporated by reference to our Form S-1 Amendment No. 2 filed on March 15, 2011.
|
10.116
|
U.S. Patent 5.692,511 issued Dec. 2, 1997, Exhibit A to Patent Licensing Agreement filed as Exhibit 10.115. Incorporated by reference to our Form S-1 Amendment No. 3 filed on April 26, 2011.
|
10.117
|
Employment Agreement and Stock Option Agreement dated December 8, 2011, between Imaging Diagnostic Systems, Inc. and Michael W. Addley, Chief Operating Officer. Incorporated by reference to our Form 8-K filed on December 9, 2010.
|
10.118
|
Preferred Stock Purchase Agreement dated March 21, 2012 by and between the Company and Linda B. Grable. Incorporated by reference to our Form 8-K filed on March 26, 2012.
|
31.1
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|