Interim Increase to Authorized Common Share CapitalIn October 2012, the Board recommended and a majority of shareholders approved an increase to the authorized common stock of the Company, increasing the authorized common stock from 1,500,000,000 common shares to 3,000,000,000 common shares. At the time of the increase, there were approximately 1,500,000,000 common shares issued and outstanding with additional share issuance obligations due. The Board believed an increase to authorized common shares was required in order to meet these interim obligations during the FINRA review period for the reverse stock split. Without this increase, the Company would have defaulted in meeting those obligations. Debt Settlements and Payments In connection with the increase to authorized common stock of the Company, the Company recently settled portions of certain outstanding debts. On September 14, 2012, the Company agreed to amend the terms of certain outstanding convertible debentures and unsecured advances (the “2012 Debentures”) totaling $848,500, representing cash advanced to the Company by an arms-length private investor over the past 18 months. The 2012 Debentures originally allowed the conversion of outstanding principal into shares of common stock at the investor’s option at varying prices but generally at $0.0025. Because of the decrease in the Company’s common stock price and the pending maturity of several of the 2012 Debentures, the investor was unlikely to exchange their debt for common shares, and would likely demand repayment in cash. The Company was not in a position to repay this debt in cash. The Company and the investor agreed to amend the 2012 Debentures, such that the 2012 Debentures will be settled and paid through the issuance of a total of approximately 920 million shares of common stock issuable over the next 12 months, upon the maturity of each portion of the debt, without any further consent required by the investor. The effective conversion price of the issuances is a weighted average price of $0.00092. Under the terms of the underlying 2012 Debentures, the investor may not engage in any conversions of debt to shares including under the amended terms if upon receipt of such shares they would beneficially own an aggregate number of shares greater than 9.99% of the total issued and outstanding common shares of the Company. To date, the Company has paid a total of $55,000 of the amended 2012 Debentures through the issuance of a total of approximately 222 million shares of common stock, leaving $793,500 due and payable through the issuance of an additional approximately 698 million shares of common stock over the next year.