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margin: 0pt 0; text-align: justify;"><b>Note 9: Convertible note and warrants</b></p> <p style="font: 10pt times new roman, times, serif; margin: 0pt 0; text-align: justify; text-indent: 15pt;">&#160;</p> <p style="font: 10pt times new roman, times, serif; margin: 0pt 0; text-align: justify; text-indent: 25pt;">On May 24, 2012, the Company entered into a securities purchase agreement (the &#8220;SPA&#8221;) with Hudson Bay Fund Ltd. (the &#8220;Investor&#8221;). The SPA provided for the purchase of an 18 month promissory note with an interest rate of 8% (the &#8220;Senior Secured Convertible Note&#8221; or the &#8220;Note&#8221;) convertible into up to 1,166,667 shares of Company Common Stock at a conversion price of $3.00 per share and a warrant (the &#8220;Hudson Bay Warrant&#8221; or the &#8220;HB Warrant&#8221;) to purchase up to 875,000 shares of Common Stock at an exercise price of $3.00 per share for proceeds of $3,500 (the &#8220;Hudson Bay Transaction&#8221;). The Note is convertible at the option of the holder at a conversion price of $3.00 per share and the Company can require conversion into Company Common Stock if the Weighted Average Price of the Common Stock equals or exceeds 200% of the conversion price for no less than twenty (20) Trading Days during any thirty (30) consecutive Trading Day period occurring following the issuance date, subject to a 9.99% beneficial ownership ceiling for Investor&#8217;s ownership of Company Common Stock at any one time. The Note is also redeemable by the Company from and after the seven (7) month anniversary of the issuance date, subject to certain equity conditions, in cash at a price equal to the greater of (i) 125% of the Conversion Amount to be redeemed and (ii) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (x) the greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the date of notice of redemption and ending on the date the redemption date, by (y) the lowest Conversion Price in effect during such period, as such terms are defined in the Note. The Conversion Price of the Note is subject to adjustment in case of a combination or subdivision of stock or in the event of the grant of rights with equity features. 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