IS THERE A SOLID RESOLUTION FOR THIS.
NOTE 4 - NOTES PAYABLE
On February 1, 2006, the Company entered into a Securities Purchase Agreement with Cornell Capital Partners, L.P., Certain Wealth, Ltd., and TAIB Bank, B.S.C. pursuant to which the Buyers agreed to purchase secured convertible debentures in the principal amount of $2,000,000. On February 2, 2006 the Company sold and issued $1,000,000 in principal amount of Debentures to the Buyers. In connection with the Securities Purchase Agreement, the Company issued Cornell Capital five-year warrants to purchase 30,000,000 shares of our common stock at the following exercise prices: 7,500,000 at $0.02 per share, 7,500,000 at $0.03 per share, 5,000,000 at $0.04 per share, 5,000,000 at $0.05 per share, and 5,000,000 at $0.06 per share.
At quarter end, the Company no longer had the necessary shares of common stock in treasury to effect the conversion of the notes to common stock as required under the convertible loan agreements. The Company is therefore in default under the Notes.
The Company received a letter dated March 17, 2008 from YA Global Investments, L.P. (f/k/a Cornell Capital Partners, L.P.) ("YA") serving as notice that the Company is in default under the terms of the Debentures and related agreements. YA's letter states that the Company is in default for, among other things, the Company's failure to reserve a sufficient number of authorized shares of common stock to allow for full conversion of the Debentures and YA demanded full payment of the YA Debenture. Pursuant to the terms of the Debentures, the Company covenanted that it would reserve a sufficient number of authorized common shares to permit the conversion of the Debentures.
Put Your Money Where Your Mouth Is
