NOTE 12 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events through January 14, 2013, which is the date the consolidated financial statements were issued.

 

Employment Agreement

 

In October 2012, the Company entered into an Employment Agreement with Larry M. Reid, the Chief Executive Officer and a director of the Company. The Agreement provides that Mr. Reid serve as Chief Executive Officer for one year and receive a base salary of $5,000 per month and 1,000,000 shares of the Company's common stock.

 

Preferred Share Authorization

 

In October 2012, the Board of Directors voted to amend the Company's Articles of Incorporation to designate the Series C and Series D Convertible Preferred Stock setting forth the rights and preferences of the Series C and D Convertible Preferred Stock, par value $.00001 per share. Among other things, the Certificate of Designation for the Series C Preferred (i) authorizes fifty million (50,000,000) shares of the Corporation's preferred stock to be designated as "Series C Convertible Preferred Stock"; (ii) grants conversion rights to the holders of the Series C Preferred Stock; (iii) provides that each share of Series C Preferred Stock shall ten votes for any election or other vote placed before the shareholders of the Corporation; (iv) provides for anti-dilutive rights; (v) provides for liquidation rights; (vi) establishes the initial price at $2.50 per share; (vii) entitles the holder of the Series C Preferred Stock to receive dividends when, as and if declared by the Board of Directors. Among other things, the Certificate of Designation for the Series D Preferred (i) authorizes ten million (10,000,000) shares of the Corporation's preferred stock to be designated as "Series D Convertible Preferred Stock"; (ii) grants conversion rights to the holders of the Series D Preferred Stock; (iii) provides that each share of Series D Preferred Stock shall ten votes for any election or other vote placed before the shareholders of the Corporation; (iv) provides for anti-dilutive rights; (v) provides for liquidation rights; (vi) establishes the initial price at $5.00 per share; (vii) entitles the holder of the Series C Preferred Stock to receive dividends when, as and if declared by the Board of Directors.

 

Stock Option Plan

 

In October 2012, the Company amended the Cleartronic, Inc. 2011 Consultant Stock Plan to increase the number of shares authorized under the plan to 177,333 shares of common stock. In October 2012, the Company filed a registration statement with the Securities and Exchange Commission registering 166,666 shares of the Company's common stock for issuance under the plan. Following the filing of the registration statement the Company issued 166,666 to six consultants for services provided the Company valued at approximately $103,750.

 

Promissory Note

 

In November 2012, the Company issued a promissory note to a stockholder for $10,000. The note bears interest at 10%, is payable quarterly and matures on December 31, 2013.

 

In December 2012, the Company issued a promissory note to a stockholder for $4,400. The note bears interest at 10%, is payable quarterly and matures on December 31, 2013.

 

In January 2013, the Company issued a promissory note to a stockholder for $2,000. The note bears interest at 10%, is payable quarterly and matures on December 31, 2013.

 

Common Stock Issuances

 

In October 2012, a convertible noteholder converted $7,000 of a convertible note into 27,500 shares of common stock.

 

Preferred Stock Issuances

 

In October 2012, the Company sold 14,000 share of Series C Preferred Stock to two individuals for $35,000 in cash. The Company also issued 429,600 shares of Series C Preferred Stock in exchange for 1,074,000 shares of Series A Preferred Stock and 2,170 shares of Series C stock for the conversion of one promissory note in the amount of $5,000 along with $425 of accrued interest.

 

In November 2012, a note holder converted three promissory notes in the amount of $110,000 along with $10,127 of accrued interest into 48,051 shares of Series C Preferred Stock.

 

In December 2012, a note holder converted two promissory notes in the amount of $16,959 along with $1,192 of accrued interest into 7,260 shares of Series C Preferred Stock. In addition, the Company issued 116,500 shares of Series C Convertible Preferred Stock to six consultants for approximately $218,750 in accrued consulting fees and $72,500 for future servicesand 20,000 shares of Series C Convertible Preferred Stock to one consultant for approximately $50,000 in services.

 

In December 2012 the Company issued 1,270,880 shares of Series C Convertible Preferred Stock to 34 shareholders in exchange for 29,741 shares of their common stock.