Monday, October 01, 2007 3:20:57 PM
(i) Convertible promissory notes of $383,850, bearing interest at 15% per annum repayable in cash or shares of the Company at the option of the note holder one year from the date of issuance. As of June 30, 2007 six of the nine notes have matured in the amount of $300,000 and are presently in default but no official notices have been received by the Company. The other three loans were renewed in 2006 for maturity in the period July 31 to September 27, 2007. The $300,000 notes in default could be converted at the holders’ option into 82,744,810 shares of the Company’s common stock as of June 30, 2007. The balance of the debt not in default, $83,850, could be converted into an additional $19,150,819 shares of common stock.
(ii) Business Development Corporation (“BDC”) loan of $9,062, bearing interest at BDC prime plus 4% per annum with monthly principal repayments of $686 (Cdn $800) plus interest commencing October 2002 and maturing March 2008.
(iii) BDC loan of $6,042 bearing interest at BDC prime plus 2% per annum with monthly principal repayments of $686 (Cdn $800) plus interest commencing June 2002 and maturing November 2008.
(iv) Convertible non-interest bearing loans of $61,500 with unspecified repayment terms.
(v) On May 28, 2007, the CLX Investment Company’s (“CLX”) convertible loan of $225,000 along with related accrued interest of $26,595 was converted into 9,082,852 shares of restricted common stock of the Company in response to the written notice of default received from CLX in the first quarter 2007. The conversion was done at the weighted average price per share during the ten (10) trading days immediately preceding the notice of default from CLX.
The Company's continuation as a going concern remains uncertain and is dependant upon successfully bringing its products and services to market; achieving profitable business operations in the future; and obtaining additional sources of financing to sustain its business operations, the outcome of which cannot be predicted at this time. In the short term, the Company continues to be dependent on related party cash loans to sustain its operations while negotiations continue regarding a special sale and leaseback financing arrangement for future manufacturing, placement of Company-owned signs and much needed working capital. In the event the Company is unable to secure these funds, it may be necessary to delay, curtail or cancel further development of its products and services.
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