NOTE 7       - SUBSEQUENT EVENTS

On July 17, 2012, the Company raised a $5.7 million through a public offering (“Public Offering”) of its common stock. The Company issued a total of 19,818,972 common stock of $0.00005 par value, ($0.29 per share) and warrants to purchase 0.75 shares of Common Stock for every share purchased in the Public Offering, at an exercise price of $0.29 per share. The Warrants are exercisable until the 30 month anniversary of the date of issuance. After deducting closing costs and fees, the Company received net proceeds of approximately $4.9 million.

The Company also paid to the Placement Agency, Maxim Group LLC (the “Placement Agent”) a cash fee equal to 6% of the gross proceeds of the Public Offering and a corporate finance fee of 1% of the gross proceeds of the Public Offering, as well as fees and expenses of the Placement Agent of $100,000.  In addition, the Company issued to the Placement Agent a two year warrant to purchase up to 594,569 shares of Common Stock (equal to 3% of the number of shares sold in the Public Offering), with an exercise price equal to $0.348 (120% of the Public offering price). The Warrants are exercisable until the 30 month anniversary of the date of issuance.