NOTE 9. COMMITMENTS AND CONTINGENCIES On April 12, 2013 a complaint (Complaint) was filed in the U.S. District Court Southern District of the State of new York against the Company, the Company?s Chairman and Does 1-50 by Star city Capital, LLC (?Plaintiff?) alleging securities fraud, common law fraud, negligent misrepresentation, breach of fiduciary duties and breach of contract in connection with the issuance of. The Plaintiff is also request declaratory relief from the Court. The action arises from the issuance and subsequent cancellation of 103,030,303 of the company?s common shares in satisfaction of $17,000 of convertible indebtedness of the Company held by the Plaintiff. The Plaintiff alleges that a cancellation notice sent by them to the Company?s transfer agent was meant to instruct the Transfer Agent simply to cancel the physical certificate in order that an equivalent number of shares may be transferred via DWAC to the Plaintiff?s stockbroker for the benefit of the Plaintiff. DWAC is the acronym for Deposit/Withdrawal At Custodian. The DWAC transaction system run by The Depository Trust Company (a.k.a. DTC or CEDE &amp; CO) permits brokers and custodial banks, the DTC participants, to request the movement of shares to or from the issuer?s transfer agent electronically. A DWAC results in the crediting or debiting of shares to or from DTC?s book-entry account on the records of the issuer maintained by the transfer agent. The Company believes that the cancellation notice sent by the Plaintiff clearly represents a cancellation of the conversion notice itself. The convertible indebtedness held by the Plaintiff was convertible at Holder?s demand into the common shares of the Company?s stock at a conversion price per share equal to 55% (the ?Discount?) of the lowest closing bid price for the Company?s common stock during the 5 trading days immediately preceding a conversion date, as reported by Bloomberg (the ?Closing Bid Price?); provided that if the closing bid price for the common stock on the date in which