8. Subsequent Events
On December 3, 2012, the Company issued 9.58 additional Series A Preferred Stock (the “Preferred Stock”) and Warrants (the “2012 Warrants”) to purchase 11,975,000 shares of Common Stock, pursuant to a Cumulative Convertible Senior Note and Warrant Purchase Agreement dated as of May 31, 2012 (the “2012 Purchase Agreement”) for proceeds of $239,500. The shares of Preferred Stock bear a cumulative dividend of 7% per annum. Upon liquidation, and upon an acquisition of the Company, the holders of Preferred Stock are entitled to a liquidation preference equal to the greater of (i) the amount invested plus all accrued and unpaid dividends, and (ii) the amount the holders of Preferred Stock, would receive had they converted the Preferred Stock to Common Stock immediately prior to such event. Each share of Preferred Stock is convertible into 1,250,000 shares of the Company’s Common Stock, subject to certain adjustments. As of October 31, 2012 the Company is authorized to issue 800,000,000 shares of common stock.
On December 28, 2012, the Company issued 6,835,900 shares of common stock (the “Common Stock”) and warrants (the “Warrants”) to purchase 5,649,500 shares of Common Stock to a certain investor, pursuant to a Common Stock and Warrant Purchase Agreement dated as of December 28, 2012 (the “Purchase Agreement”) for proceeds of $112,990.