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NOTE 11 - LEGAL PROCEEDINGS
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12 Months Ended |
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Apr. 30, 2012
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| Commitments and Contingencies Disclosure [Abstract] | |
| NOTE 11 – LEGAL PROCEEDINGS |
NOTE 11 – LEGAL PROCEEDINGS
In July 2011 a claim was filed by Cornerstone Bank (“Cornerstone”) against Freedom-2, Inc., a wholly owned subsidiary of the Company, for amounts due under a promissory note (the “Note”), in the original principal amount of $1.6 million (collectively the “Indebtedness”). The bank also sought to foreclose its mortgage on the property securing the Note, which is located in Cherry Hill, New Jersey (the “Property”). Given the passage of time and the Company having made no payments toward the Indebtedness for several years, as of May 2012, the amount due was approximately $2.0 million. The Company recently resolved all matters related to Cornerstone’s claims (the “Settlement”) and is in the process of effecting the Settlement, as follows: (i) the parties stipulate to judgment in the amount of the Indebtedness, with a stay of execution for 2 years pending the Company satisfying the Indebtedness in any of several ways, including direct payments of cash and discounts of up to 30% for early payments, or a combination thereof; (ii) the Company conveys the Property to Cornerstone, which will sell the Property and apply the net proceeds to reduce the Indebtedness (in the event the Property is not sold and the Indebtedness satisfied as otherwise described herein, the Property will be reconveyed to the Company); and (iii) the Company reaffirms the pledge of 14,605,614 shares of the Company’s common stock as security for payment of the Indebtedness (the “Stock Collateral”), which can be liquidated by Cornerstone from time to time in accordance with a SEC Rule 10b5-1 plan, with the proceeds being applied to reduce the Indebtedness and with any excess Stock Collateral being returned to the Company upon payment of the Indebtedness in full.
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