NOTES AND ADVANCES PAYABLE

6 Months Ended

Mar. 31, 2012

Notes and advances payable, all classified as current at March 31, 2012, consists of the following:

Notes Payable
	March 31,
	2012
Samuel L. Hill	$	10,000
Gene Garrett		10,000
Agile Opportunity Fund, LLC		325,000
Total	$	345,000

Notes and Advances Payable - Related Parties
	March 31,
	2012
Globanc Corporation (advances)	$	50,391
Total	$	50,391

On September 3, 2008, the Company secured a note for $100,000 from Going Public, LLC. The note matured on September 3, 2009, bears interest at a rate of 12%, and is due monthly. The note is collateralized by the Company’s assets and 80,000,000 shares of stock issued to the Company’s founder. The Company did not pay the interest in January 2009 and the Lender began charging the default interest of 18%. The Lender granted extensions to August 14, 2009 to repay all unpaid accrued interest. The Company did not repay the note by September 3, 2009 or the related accrued interest by August 14, 2009 and was in default. During December 2009, the current majority shareholder, Globanc Corporation (“Globanc”), agreed to acquire the note payable from the original lender and agreed to acquire the 80,000,000 shares of stock formerly issued to the Company’s founder. The Company converted the note and accrued interest on August 15, 2011 into Series A preferred stock (see Note 10).

On May 18, 2009, the Company secured a note for $10,000 from Samuel L. Hill (“Hill”). The note matured on May 18, 2010 and is in default. The note requires payment of interest in the form of shares of common stock payable as 10,000 shares of common stock on November 18, 2009 and May 18, 2010. The Company continued to pay the common stock for interest on November 18, 2010 and May 18, 2011 which are recorded as issuable and was issued in January 2012. All common stock issued and issuable was recorded at the various valuation prices based on the Company’s valuation of the stock. The first two payments were valued at $0.02 per share based on recent October 2008 sales prices to third parties, the third payment was valued at the same price of $0.0976 per share used for the valuation of the Agile transaction which was within thirty days of the issuance in November 2010, and the fourth payment was valued at $0.15 per share based on a contemporaneous March 2011 shares sale agreement. On November 18, 2011, the Company became obligated to issue 10,000 shares of common stock, having a fair value of $3,750 ($0.375/share based on the trading price), which was issued in January 2012 (see Note 10).

On May 18, 2009, the Company secured a note for $10,000 from Gene Garrett (“Garrett”). The note matured on May 18, 2010 and is in default. The note requires payment of interest in the form of shares of common stock payable as 10,000 shares of common stock on November 18, 2009 and May 18, 2010. The Company continued to pay the common stock for interest on November 18, 2010 and May 18, 2011 which are recorded as issuable and was issued in January 2012. All common stock issued and issuable was recorded at the various valuation prices based on the Company’s valuation of the stock. The first two payments were valued at $0.02 per share based on recent October 2008 sales prices to third parties, the third payment was valued at the same price of $0.0976 per share used for the valuation of the Agile transaction which was within thirty days of the issuance in November 2010, and the fourth payment was valued at $0.15 per share based on a contemporaneous March 2011 shares sale agreement. On November 18, 2011, the Company became obligated to issue 10,000 shares of common stock, having a fair value of $3,750 ($0.375/share based on the trading price), which was issued in January 2012 (see Note 10).

Beginning on January 1, 2010, Globanc, a related party, began advancing funding to the Company, as needed, to provide working capital to the Company. The Company and Globanc did not have a formal agreement. The Company and Globanc agreed on a nominal interest rate of 6% to be accrued. The balance of advances and the above $100,000 loan and all related accrued interest totaling $228,345 as of August 15, 2011, was converted into Series A preferred stock (see Note 10) valued at the conversion amount as this was the best evidence of the preferred stock value. Additionally, the Company and Globanc agreed that at the end of each quarter, the unpaid balance and accrued interest for advances made would be converted to common stock. The conversion price would be the average trading price for the quarter with a discount of 25%. As of September 30, 2011, certain advances of $112,173 were not converted. As of December 31, 2011, advances and the accrued interest for advances made, totaling $307,797, including the balance at September 30, 2011, were converted into 1,784,329 shares of common stock valued at $419,317 based on the closing price of stock on December 31, 2011 of $0.235 per share, and the Company recorded a loss on settlement of debt for $111,520. Subsequently on March 22, 2012, the prior 2011 conversions were modified due to valuation issues and an additional 27,748,830 anti-dilutive shares of common stock were issued, valued at $4,079,081 based on the $0.147 quoted trading price on the anti-dilutive issuance agreement date as of March 22, 2012, and recorded as a loss on settlement of debt in the accompanying consolidated statement of operations. The Company and Globanc agreed to suspend conversions of advances made after December 31, 2011 and therefore advances of approximately $50,000 made in the three months ending March 31, 2012 are reflected as Notes and advances payable-related party in the accompanying consolidated financial statements at March 31, 2012.

On November 15, 2010, the Company issued a senior secured promissory note for $325,000 to Agile in conjunction with the acquisition of certain assets of Diamond Assets (see Note 1). The note matured on November 15, 2011 and is in default with regard to principal and interest payments. The Company is negotiating an extension. The note provides for interest at 9% payable on the last day of each calendar month. After November 15, 2011, due to the default, interest will be 17%. The note is secured by substantially all assets of the Company.

Related to the purchase of “Diamond Decision Assets”, the Seller, Agile shall have the right, at its sole option, to sell up to 10,000,000 of the Company’s shares, or any portion thereof back to the Company for a total consideration equal to all or a pro-rata portion of $2,800,000 if on or before the end of that fiscal quarter which ends June 30, 2011, (i) Omni has not achieved an annual quarterly sales of $10,000,000, (ii) Omni has not obtained total market capitalization of at least $50,000,000 and (iii) Omni has not achieved positive cash flow. The Company has achieved a market capitalization of $50,000,000 and there has been no request by Agile to sell the Company’s shares and as of September 19, 2011, the put options expired.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

OMNI VENTURES INC 10-Q