Quarterly report pursuant to sections 13 or 15(d)

Subsequent Events

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Subsequent Events
6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
Subsequent Events

As mentioned above in the description of the Company, Management plans to seek additional debt and/or equity financing through private or public offerings or through a business combination or strategic partnership. Subsequent to December 31, 2010, the Company entered into several significant transactions reflecting these plans.

Bridge Financings - In contemplation of entering into a reverse triangular merger and private investment in public equity (PIPE), the Company has obtained loans convertible into stock in the Company. As described in Note 7, $125,000 of this was obtained in December 2010 regarding the Senior Secured Convertible Notes and $375,000 was obtained in six month period ended June 30, 2011. Such loans are convertible into common shares of the Company. The conversion price per share shall be equal to one-third the price per share of equity securities sold to outside investors in the next equity financing from outside sources, which is anticipated to be the PIPE transaction. These notes were formerly secured by collateral consisting of substantially all assets of the company. Under a May 20, 2011 amendment to the Senior Secured Convertible Promissory Note Agreement, this security interest was terminated.

 

The Company expected to enter into a Bridge Loan Agreement in mid May 2011 providing for up to $3 million in senior secured convertible loans. As of June 30, 2011 this financing has not occurred although the Company is continuing to pursue financing but does not know when such will be obtained.

 

On June 3, 2011, the Company disclosed entering into a Letter Agreement (the “Agreement”) with Generex Biotechnology Corporation (“Generex”) regarding the licensing of certain intellectual properties and forming collaborative arrangements for the benefit of the parties. In the disclosure, the Company explained that the material terms of the Agreement will be evidenced by further documentation to be delivered on a formal Closing Date to take place no later than July 15, 2011. Although the Company is still in negotiations with Generex over the material terms and is actively pursuing developing the necessary documentation to close the transaction, the Company has not been able to do so by the target date of July 15, 2011. The Company has continued its efforts to arrive at a consensus with Generex and to close the transaction in the near future, although there can be no assurances that a consensus will be reached.