Excerpt from the proxy regarding the Ironridge transactionHere is the cut and paste of what is said in the proxy regarding the Ironridge transaction......
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Related Person Transactions
In August 2013, in order to relieve several debt obligations, the Company entered into a securities transaction with Ironridge Global IV, ltd., a British Virgin Islands investment firm with offices in California (“Ironridge”), whereby Ironridge has agreed to purchase approximately $5,000,000 worth of the Company’s debt and release the Company of its debt obligations in exchange for the Company’s free trading shares pursuant to the registration exemption under 3(a)(10) of the Securities Act of 1933, as amended. Prior to this transaction, the Company owed Mr. Dickson Lee, the Chairman and Chief Executive Officer of the Company, a total $2,149,640 in debt. Among the Company’s debts purchased by Ironridge, $800,000 belonged to Mr. Lee, who received cash from Ironridge for the assignment of his debt. Ironridge has commenced an action against the Company to recover the debts of the Company in court and agreed to settle the debts with the Company pursuant to a proposed settlement stipulation, which is subject to approval by the court. This transaction has been approved by the Audit Committee and the Board and the Company anticipates its completion by the end of August.