In January 2012, the Company provided an opportunity for potential investors to purchase up to a total of 200 units, each consisting of one $25,000 convertible note and warrants to purchase $25,000 shares of Common Stock. The notes are unsecured and carry an interest rate of 15%, accrued quarterly. The interest and principal will be paid upon the maturity date of the note, which is December 31, 2012. Notes are convertible into common stock at a 25% discount to any public offering that occurs before the maturity date with the common shares being registered in the S-1 registration for and sold at the time of the public offering; if no public offering occurs before the maturity date, the Notes shall be convertible into the common stock of the Company at a 25% discount to the volume weighted average price during December 2012. Warrants will have a term of five years, exercisable during the four years commencing twelve months after the closing date. The exercise price of the Warrants is 120% of any public offering completed by the Company prior to the Maturity Date of the convertible promissory notes (December 31, 2012; or 120% of the volume weighted average price (of the Company's common stock) during December 2012.
