Annual report pursuant to section 13 and 15(d)

VENDOR CONCESSIONS

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VENDOR CONCESSIONS
12 Months Ended
Dec. 31, 2012
VENDOR CONCESSIONS
13. VENDOR CONCESSIONS:

As the Company’s financial condition deteriorated during the first nine months of 2012, it became necessary for the Company to accelerate its cash conservation measures, including delaying or withholding payments to vendors. In conjunction with the September, 2012 investment by RVL, certain accounts payable vendors and service providers agreed to accept payments less than the outstanding balance owed to them. For the year ended December 31, 2012, the Company recognized a gain from vendor concessions of $153,522 which is included in selling, general and administrative expense and caused basic and diluted loss per share for the year ended December 31, 2012 to decrease by $0.01. As a result of the investment and subsequent payments to our suppliers and service providers, the Company believes it has successfully restored its relationship and credit with the Company’s primary vendors.