UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~October~~January 31, ~~2011~~2012

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to ____

Commission File No. 000-53367

DOT VN, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-3825987
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

9449 Balboa Avenue, Suite 114

San Diego, California 92123

(Address of principal executive offices, zip code)

(858) 571-2007

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year,

if changed since last report)

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company o (Do not check if a smaller reporting company) ~~o Smaller reporting company x~~

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) . Yes o No x

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes o No x

APPLICABLE ONLY TO CORPORATE ISSUERS

As of ~~December~~March 916, ~~2011~~2012, there were 6271,~~705~~569,~~266~~282 shares of the issuer’s common stock, par value $0.001 per share, outstanding.

DOT VN, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED ~~OCTOBER~~JANUARY 31, ~~2011~~2012

INDEX

Index			Page
Part I.	Financial Information
	Item 1.Financial Statements			4
	Item 1.	Financial Statements
	~~Basis of Presentation.~~	Basis of Presentation.	4	4
	~~Report of Independent Registered Public Accounting Firm.~~	Report of Independent Registered Public Accounting Firm.	5	5
	Condensed Consolidated Balance Sheets as of October 31, 2011 (unaudited) and April 30, 2011.			6
		Condensed Consolidated Balance Sheets as of January 31, 2012 (unaudited) and April 30, 2011.	6
	Condensed Consolidated Statements of Operations for the Three months ended October 31, 2011 and 2010 (unaudited).			7
		Condensed Consolidated Statements of Operations for the Three months ended January 31, 2012 and 2011 (unaudited).	7
	Condensed Consolidated Statements of Operations for the Six months ended October 31, 2011 and 2010 (unaudited).			8
		Condensed Consolidated Statements of Operations for the Nine months ended January 31, 2012 and 2011 (unaudited).	8
	Condensed Consolidated Statements of Changes in Stockholders Equity for the Six months ended October 31, 2011 (unaudited) and Year ended April 30, 2011.			9
		Condensed Consolidated Statements of Changes in Stockholders Equity for the Nine months ended January 31, 2012 (unaudited) and Year ended April 30, 2011.	9
	Condensed Consolidated Statements of Cash Flows for the Six months ended October 31, 2011 and 2010 (unaudited).			11
		Condensed Consolidated Statements of Cash Flows for the Nine months ended January 31, 2012 and 2011 (unaudited).	11
	~~Notes to Condensed Consolidated Financial Statements (unaudited).~~	Notes to Condensed Consolidated Financial Statements (unaudited).	13	13
	Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.			71
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	83
	Item 3.Quantitative and Qualitative Disclosures About Market Risk.			89
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	103
	Item 4.Controls and Procedures.			90
	Item 4.	Controls and Procedures.	103
Part II.	Other Information
	Item 1.Legal Proceedings.			91
	Item 1.	Legal Proceedings.	105
	Item 1A.Risk Factors.			91
	Item 1A.	Risk Factors.	105
	Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.			91
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	105
	Item 3.Defaults Upon Senior Securities.			91
	Item 3.	Defaults Upon Senior Securities.	106
	Item 4.(Removed and Reserved).			91
	Item 4.	(Removed and Reserved).	106
	Item 5.Other Information.			91
	Item 5.	Other Information.	106
	Item 6.Exhibits.			92
	Item 6.	Exhibits.	107
Signatures			108	93
Certifications

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Dot VN, Inc., a Delaware corporation (the “Company”) contains “forward-looking statements“. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: (i) our limited operating history; (ii) our ability to obtain additional financing to complete our business plan; (iii) our ability to pay down existing debt; (iv) unforeseen costs and expenses; (v) potential litigation with our shareholders, creditors and/or former or current investors; (vi) the Company’s ability to comply with federal, state and local government regulations; (vii) the Company’s ability to maintain current material agreements with the government of Vietnam and secure additional agreements in furtherance of the Company’s business in Vietnam; and (viii) the exercise of the approximately ~~54.79~~57,92% control Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, holds of the Company’s voting securities, (ix) the exercise of the approximately 4340.2234% control Lee Johnson, the Company’s President, Chief Technology Officer, and Chief Financial Officer and a Director, holds of the Company’s voting securities, (x) other factors over which we have little or no control; and (xii) other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the Securities and Exchange Commission or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Dot VN, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial reporting and the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnote disclosures necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

The unaudited condensed consolidated balance sheet of the Company as of ~~October~~January 31, ~~2011~~2012, and the related consolidated balance sheet of the Company as of April 30, 2011, which is derived from the Company's audited consolidated financial statements, the ~~un-audited~~unaudited condensed consolidated statement of operations and cash flows for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011 and the condensed consolidated statement of stockholders equity for the period of April 30, 2010 to ~~October~~January 31, ~~2011~~2012 are included in this document. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s most recently filed Form 10-K.

Operating results for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 are not necessarily indicative of the results that can be expected for the year ending April 30, 2012.

PLS CPA, A Professional Corp.

t 4725 MERCURY STREET SUITE 210 t SAN DIEGO t CALIFORNIA 92111 t

t TELEPHONE (858)722-5953 t FAX (858) 761-0341 t FAX (858) 764-5480

t E-MAIL changgpark@gmail.com t

Report of Independent Registered Public Accounting Firm

To the Board of Directors of

Dot VnVN, Inc.

9449 Balboa Avenue, Suite 114

San Diego, CA 92123

We have reviewed the accompanying condensed consolidated balance sheet of Dot VN, Inc. (the “Company”) as of ~~October~~January 31, ~~2011~~2012, and the related condensed consolidated statements of operations for the three and ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011, condensed consolidated statements of changes in stockholders’ equity (deficit) and condensed consolidated cash flows for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 17 to the condensed consolidated financial statements, the Company's losses from operations raise substantial doubt about its ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ PLS CPA

____________________________

PLS CPA, A Professional Corp.

~~December~~March 1519, ~~2011~~2012

San Diego, ~~California~~CA 92111

Registered with the Public Company Accounting Oversight Board

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	October 31,			April 30,
	January 31,			April 30,
	2011			2011
	2012			2011
	(unaudited)
ASSETS
Current assets:
Cash	$	1941,~~572~~913		$	132,627
Accounts receivable, net of zero allowance for doubtful accounts		~~118~~50,~~435~~539			162,550
Inventories		-			22,688
Prepaid expenses and other current assets		6842,~~365~~969			120,954
Prepaid warrant expense, current		~~2,558~~-			17,904
Notes receivable, net		-			-
Total current assets		~~208~~135,~~930~~421			456,723
Equipment, net		1,~~006~~024,~~205~~734			958,091
Intangible assets		1,023,222			1,023,143
Other noncurrent assets		~~349~~310,~~249~~859			327,865
Total assets	$	2,~~587~~494,~~606~~236		$	2,765,822
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	314,~~292~~666		$	295,836
Customer deposits		2331,~~206~~099			9,241
Due to related parties, net of zero and zero discount		1,~~947~~987,~~110~~721			1,814,842
Short-term convertible debt, net of $45,926 and zero discount		80,219			27,705
Short-term convertible debt, net of $35,593 and zero discount		85,055			27,705
Short-term debt and current portion of long-term debt		3,~~280~~097,~~035~~236			3,401,773
Accrued and other liabilities		1,~~640~~871,~~199~~979			1,163,036
Total current liabilities		7,~~285~~387,~~061~~756			6,712,433
Long-term liabilities:
Due to related parties, net of $171,172 and $190,199 discount		618,589			565,350
Due to related parties, net of $182,815 and $190,199 discount		624,053			565,350
Long-term convertible debt, net of $222,494 and $301,383 discount		1,120,088			1,297,948
Long-term convertible debt, net of $227,884 and $301,383 discount		1,164,230			1,297,948
Long-term debt, net of current portion		~~221~~26,~~834~~259			201,010
Total long-term liabilities		1,~~960~~814,~~511~~542			2,064,308
Total Liabilities		9,~~245~~202,~~572~~298			8,776,741
Commitments and contingencies
Shareholders' equity (deficit):
Preferred stock: 50,000,000 shares authorized of $0.001 par value; 120,000
shares designated Series A, $10.00 stated value; 0 issued and outstanding
as of October 31 and April 30, 2011		-			-
as of January 31, 2012 and April 30, 2011		-			-
Common stock: 250,000,000 shares authorized of $0.001 par value;
62,217,715 and 59,557,403 shares issued and outstanding as of October 31
66,173,616 and 59,557,403 shares issued and outstanding as of January 31,
and April 30, 2011		62,218			59,557
2012 and April 30, 2011		66,174			59,557
Additional paid-in capital		4748,~~782~~238,~~523~~686			46,055,778
Accumulated deficit		(5455,~~530~~041,~~825~~417	)		(52,149,757	)
Accumulated comprehensive income		28,~~118~~495			23,503
Total shareholders' equity (deficit)		(6,~~657~~708,~~966~~062	)		(6,010,919	)
Total liabilities and shareholders' equity (deficit)	$	2,~~587~~494,~~606~~236		$	2,765,822

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended October 31,
	Three Months Ended January 31,
	2011			2010
	2012			2011
Revenues	$	~~225~~180,~~374~~110		$	~~244~~212,~~802~~299
Cost of revenues		8060,~~199~~889			~~107~~91,~~664~~944
Gross profit		~~145~~119,~~175~~221			~~137~~120,~~138~~355
General and administrative expenses:
Consulting and professional fees		9261,~~305~~112			2225,~~856~~353
Marketing and promotion		12,000			12,000
Option bonus		-120,879			216,162
Bad debt expense		2,608			585
Bad debt (recovery) expense		(219,812	)		1,232
Other general & administrative expenses		~~393~~366,~~558~~240			~~561~~433,~~326~~929
Total general and administrative expenses		~~500~~340,~~471~~419			~~812~~688,~~929~~676
(Loss) from operations		(~~355~~221,~~296~~198	)		(~~675~~568,~~791~~321	)
Other income (expenses):
Interest income		9286,982			~~250~~287
Finance (expense)		(~~193~~60,~~155~~501	)		(365,~~777~~484	)
Interest (expense)		(~~918~~313,~~754~~372	)		(~~307~~361,~~968~~680	)
Foreign exchange (loss)		(14,531	)		(9,877	)
Foreign exchange (loss) gain		(2,501	)		1,163
Other (expense)		-			(172	)
Other income		-			222
Total other income (expenses)		(1289,~~126,348~~392	)		(~~321~~425,~~544~~492	)
Net loss	$	(1510,~~481,644~~590	)	$	(~~997~~993,~~335~~813	)
Loss per common share:
Basic and diluted	$	(0.0201	)	$	(0.02	)
Weighted average common shares outstanding:
Basic and diluted		6165,~~638~~550,~~697~~335			4244,~~656~~224,~~527~~528
Comprehensive income (loss):
Net loss	$	(1510,~~481,644~~590	)	$	(~~997~~993,~~335~~813	)
Other comprehensive (loss) income:
Other comprehensive income (loss):
Foreign currency translation		~~5,980~~377			~~2,494~~(831	)
Comprehensive loss	$	(1510,~~475,664~~213	)	$	(994,~~841~~644	)

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations (Unaudited)

	Six Months Ended October 31,
	Nine Months Ended January 31,
	2011			2010
	2012			2011
Revenues	$	~~464~~644,~~886~~996		$	~~578~~790,~~310~~609
Cost of revenues		~~165~~226,~~448~~337			~~222~~314,~~499~~443
Gross profit		~~299~~418,~~438~~659			~~355~~476,~~811~~166
General and administrative expenses:
Consulting and professional fees		~~191~~252,~~874~~986			77102,~~079~~432
Marketing and promotion		2436,000			2436,000
Option bonus		~~141~~262,~~660~~539			~~720~~936,~~539~~701
Bad debt expense		3,009			3,872
Bad debt (recovery) expense		(216,803	)		5,104
Other general & administrative expenses		~~860~~1,~~717~~226,957			1,~~082~~515,~~044~~973
Total general and administrative expenses		1,~~221~~561,~~260~~679			12,~~907~~596,~~534~~210
(Loss) from operations		(~~921~~1,~~822~~143,020	)		(12,~~551~~120,~~723~~044	)
Other income (expenses):
Interest income		~~192~~87,174			~~476~~763
Finance (expense)		(~~250~~311,~~709~~210	)		(~~141~~206,~~324~~808	)
Interest (expense)		(1,~~195~~509,~~956~~328	)		(1,~~250~~612,~~759~~439	)
Foreign exchange (loss)		(1215,~~773~~276	)		(1413,~~539~~376	)
Other income		-			~~393~~615
Total other income (expenses)		(1,~~459~~748,~~246~~640	)		(1,~~405~~831,~~753~~245	)
Net loss	$	(2,~~381~~891,~~068~~660	)	$	(23,~~957~~951,~~476~~289	)
Loss per common share:
Basic and diluted	$	(0.0405	)	$	(0.0709	)
Weighted average common shares outstanding:
Basic and diluted		6062,~~989~~509,~~354~~681			42,~~296~~939,~~843~~405
Comprehensive income (loss):
Net loss	$	(2,~~381~~891,~~068~~660	)	$	(23,~~957~~951,~~476~~289	)
Other comprehensive (loss) income:
Other comprehensive income:
Foreign currency translation		4,~~615~~992			21,~~542~~711
Comprehensive loss	$	(2,~~376~~886,~~453~~668	)	$	(23,~~954~~949,~~934~~578	)

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

										Accumulated
			Common		Additional					other
	Common		stock		paid-in		Accumulated			comprehensive
	stock		amount		capital		deficit			(loss) income		Total

Balance, April 30, 2010		41,039,263	$	41,039	$	40,342,899	$	(47,146,271	)	$	8,089	$	(6,754,244	)

Shares issued for cash		1,313,715		1,314		357,486		-			-		358,800

Shares issued to employees		101,000		101		17,549		-			-		17,650

Shares issued for services		660,000		660		121,740		-			-		122,400

Shares issued upon conversion of convertible debentures		15,409,846		15,410		3,295,277		-			-		3,310,687

Shares issued as payment on term debt		1,033,579		1,033		257,362		-			-		258,395

Discount on convertible debentures		-		-		90,264		-			-		90,264

Detachable warrants vested upon conversion of convertible debentures		-		-		175,271		-			-		175,271

Warrants issued for deferred debt issuance costs		-		-		183,293		-			-		183,293

Warrants issued for services		-		-		63,943		-			-		63,943

Stock options expensed		-		-		1,150,694		-			-		1,150,694

Comprehensive loss, April 30, 2011		-		-		-		(5,003,486	)		15,414		(4,988,072	)

Balance, April 30, 2011		59,557,403		59,557		46,055,778		(52,149,757	)		23,503		(6,010,919	)

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

										Accumulated
			Common		Additional					other
	Common		stock		paid-in		Accumulated			comprehensive
	stock		amount		capital		deficit			(loss) income		Total
Balance, April 30, 2011		59,557,403		59,557		46,055,778		(52,149,757	)		23,503		(6,010,919	)
Shares issued for deferred debt issuance costs		100,000		100		11,900		-			-		12,000
Shares issued to employees		233,000		233		14,912		-			-		15,145
Shares issued upon conversion of convertible debentures		1,660,312		1,661		313,798		-			-		315,459
Shares issued for deferred debt issuance costs		200,000		200		16,300		-			-		16,500
Shares issued as payment on term debt		900,000		900		224,100		-			-		225,000
Shares issued upon conversion of convertible debentures		2,147,863		2,148		350,612		-			-		352,760
Discount on convertible debentures		-		-		739,784		-			-		739,784
Shares issued as payment on term debt		3,900,000		3,900		371,100		-			-		375,000
Detachable warrants vested upon conversion of convertible debentures		-		-		136,776		-			-		136,776
Discount on convertible debentures		-		-		854,639		-			-		854,639
Warrants issued for deferred debt issuance costs		-		-		127,327		-			-		127,327
Detachable warrants vested upon conversion of convertible debentures		-		-		149,211		-			-		149,211
Shares issued upon exercise of warrant		135,350		136		-		-			-		136
Warrants issued for deferred debt issuance costs		-		-		132,195		-			-		132,195
Warrants issued for services		-		-		31,400		-			-		31,400
Stock options expensed		-		-		~~141~~262,~~660~~539		-			-		~~141~~262,~~660~~539
Comprehensive loss, October 31, 2011		-		-		-		(2,381,068	)		4,615		(2,376,453	)
Comprehensive loss, January 31, 2012		-		-		-		(2,891,660	)		4,992		(2,886,668	)
Balance, October 31, 2011		62,217,715	$	62,218	$	47,782,523	$	(54,530,825	)	$	28,118	$	(6,657,996	)
Balance, January 31, 2012		66,173,616	$	66,174	$	48,238,686	$	(55,041,417	)	$	28,495	$	(6,708,062	)

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the Six Months Ended October 31,
	For the Nine Months Ended January 31,
	2011			2010
	2012			2011
Cash flows from operating activities:
Net loss	$	(2,~~381~~891,~~068~~660	)	$	(23,~~957~~951,~~476~~289	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		1822,~~852~~380			1218,~~372~~330
Accrued interest expense		~~365~~554,~~590~~378			~~424~~664,~~682~~060
Equity in loss of IT.VN		-			24,207
Accrued interest income		(86,934	)		-
Amortization of deferred debt issuance costs		108,142			1,636
Bad debt recovery		(221,213	)		-
Amortization of service warrants		46,747			-
Equity in loss of IT.VN					38,954
Amortization of debt discounts		791,775			915,607
Amortization of deferred debt issuance costs		149,186			21,661
Detachable warrants vested upon conversion of convertible debentures		136,776			-
Amortization of service warrants		49,304			-
Stock options expensed		141,660			720,539
Amortization of debt discounts		899,931			880,678
Stock issued to employees		-			990
Detachable warrants vested upon conversion of convertible debentures		149,211			175,271
Amortization of stock issued for services		51,000			-
Stock options expensed		262,539			936,701
Stock issued to employees		15,145			17,650
Amortization of stock issued for services		72,250			4,250
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable		48116,~~640~~541			(1419,~~613~~267	)
Decrease in inventory		22,688			57,000
Decrease (increase) in prepaid expenses and other current assets		15,~~297~~423			(312,~~021~~567	)
Decrease (increase) in other noncurrent assets		1118,~~853~~334			1015,~~353~~074
Increase (decrease) in accounts payable		1314,~~701~~086			(49,~~722~~540	)
Increase (decrease) in customer deposits		1421,~~007~~893			(15,~~976~~805	)
Increase in accrued liabilities		~~414~~606,~~099~~997			~~373~~511,~~487~~067
Net cash (used in) operating activities		(~~194~~219,~~241~~521	)		(~~440~~646,~~935~~162	)
Cash flows from investing activities:
Purchase of equipment		(25,~~840~~761	)		(10,713	)
Purchase of intangible assets		(87	)		-
Cash advanced to IT.VN		-			(6070,000	)
Net cash (used in) investing activities		(25,~~927~~848	)		(7080,713	)
Cash flows from financing activities:
Proceeds from convertible debentures		95145,000			-
Payment of deferred debt issuance costs		(5,500	)		-
Proceeds from term notes		-			~~102~~202,531
Repayment of term notes		(4953,~~198~~004	)		(26128,~~194~~488	)
Advances from related parties		~~118~~166,~~317~~662			~~211~~383,~~976~~611
Repayments to related parties		(61108,~~073~~888	)		-(21,757	)
Proceeds from stock issuances		-135			~~106~~206,300
Net cash provided by financing activities		97144,~~546~~405			~~394~~642,~~613~~197
Effect of exchange rate changes on cash		910,~~567~~250			75,~~236~~258
Net (decrease) in cash		(~~113~~90,~~055~~714	)		(~~109~~79,~~799~~420	)
Cash, beginning of the period		132,627			135,664
Cash, end of the period	$	1941,~~572~~913		$	2556,~~865~~244

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)

	For the Six Months Ended October 31,
	For the Nine Months Ended January 31,
	2011		2010
	2012		2011
Non-cash investing and financing activities:
Increase in construction in progress from accrued interest	$	4264,~~784~~989	$	3558,~~116~~877
Common stock issued in exchange for convertible debentures	$	~~315~~352,~~459~~760	$	-810,687
Common stock issued for services	$	-	$	23,500
Common stock issued to employees	$	15,145	$	17,650
Common stock issued as payment on term debt	$	225,000	$	-
Common stock issued for services	$	-	$	102,000
Common stock issued as payment of deferred debt issuance costs		12,000		-
Common stock issued as payment on term debt	$	375,000	$	-
Common stock issued as payment of deferred debt issuance costs	$	16,500	$	-
Supplemental cash flow disclosure:
Interest paid	$	1830,~~521~~435	$	2939,~~001~~594
Taxes paid	$	-	$	37,~~900~~800

The accompanying notes are an integral part of these condensed consolidated financial statements

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1. Condensed consolidated financial statements

The accompanying ~~October~~January 31, ~~2011~~2012 condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011 and for all periods presented have been made. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the Company's April 30, 2011 audited consolidated financial statements and related notes included in the Company’s most recent Form 10-K as filed with the Securities and Exchange Commission. The results of operations for periods ended ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011 are not necessarily indicative of the operating results for the full years.

2. Organization

The Company

Dot VN, Inc., its subsidiaries, and its predecessors (the “Company” or “Dot VN”), is a leading technology company deploying cutting edge infrastructure solutions and innovative online services and solutions focused on the Vietnamese and South East Asian markets. Dot VN provides first class Internet related services including domain name registration, web hosting and Internet advertising through its management of the INFO.VN platform and web portal. Dot VN is also focused on commercializing cutting edge infrastructure technology in the South East Asian region. Dot VN has signed agreements with industry leaders in the data center and wireless sectors to develop a market for their products in the region. In order to maximize the benefits the Company can derive from the technology, the Company also intends:

· to drive growth in registrations of the Vietnamese ‘.vn’ country code top level domain names (“ccTLD”); · to drive growth in registrations of the Vietnamese Native Language Internationalized Domain Names (“IDN”); · to develop and operate industry leading web portals and online services; · to build and operate Internet data centers based on micro-modular data center technology in major city centers in Vietnam; · to commercialize the use of multi-gigabit capacity virtual fiber systems, a wireless point-to-point layer one solution; · to commercialize the use of micro-modular data center solutions; and · to identify, deploy and commercialize best of breed technologies and applications in Vietnam.

Dot VN was incorporated in the State of Delaware on May 27, 1998, under the name Trincomali Ltd. (“Trincomali”). Over the course of its history, Trincomali underwent additional name changes until being renamed Malers, Inc. (“Malers”) on April 28, 2005. On July 17, 2006, Malers completed an Agreement and Plan of Merger with Dot VN, Inc., a California corporation (“Dot VN CA”), the completion of which transaction resulted in Malers being renamed “Dot VN, Inc.” and Dot VN CA was renamed Hi-Tek Multimedia, Inc. becoming a wholly owned subsidiary of the Company. Final state regulatory approval was received on August 17, 2006. For accounting purposes, the acquisition has been treated as a recapitalization of Dot VN CA with Dot VN CA as the acquirer (reverse acquisition). Dot VN CA was treated as the acquirer for accounting purposes because after the acquisition the shareholders of Dot VN CA controlled Malers and the officers and directors of Dot VN CA assumed the same positions at Malers; Malers is the surviving entity for legal purposes. The historical financial statements prior to July 17, 2006 are those of Dot VN CA.

Dot VN has signed agreements with the Vietnamese Internet Network Information Center (“VNNIC”) to serve as the only domain name registrar empowered with independent authority to approve and register in real time, without VNNIC participation, Vietnamese domain names and we are the only registrar authorized to process all third level registrations online which provides Dot VN with a competitive advantage vis-à-vis other domain name registrars (the “VNNIC Registrars Agreement”). The current VNNIC Registrars Agreement has no fixed term. On May 25, 2009, the Company signed an exclusive rights agreement with VNNIC to promote and advertise the registration of the ‘.vn’ ccTLD with the commercialization of a pay-per-click (“PPC”) parking page program for ‘.vn’ domain registrations; VNNIC directs all Internet traffic requesting a non-existent or expired domain name to a web page managed by the Company which Dot VN will leverage towards developing industry leading online services and web portals. On February 22, 2011, the Company signed an agreement with VNNIC which designates Dot VN as VNNIC’s sole partner in developing, promoting and managing the Vietnamese native language internationalized domain name (the “Vietnamese IDNs”) system.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

2. Organization (continued)

The Company (continued)

The Vietnamese Native Language Internationalized Domain Names (“IDN”) are domain names which utilize the Vietnamese written language in lieu of English based script. The project is an effort to create a Vietnamese language driven Internet localized for both the country of Vietnam as well as Vietnamese speakers worldwide centered on the shared written Vietnamese language and culture. Additionally, the Company and its partners are actively developing tools such as automated website designers and other functionality that it hopes will spur wider adoption and usage of the IDNs. The Company's intention is to create a unique Vietnamese language Internet which will appeal to all Vietnamese, with a particular focus on lower income and rural residents who may be deterred from using an English based domain name system.

Overall adoption has been robust with the total number of registrations reaching 615,720 on January 31, 2012. On average registrations have been increasing between 50,000 and 60,000 IDNs per month. Additionally, the Company has been successful in achieving significant penetration throughout Vietnam including both urban and the formerly problematic rural markets.

In response to the continued development of Internet access and online services, the Company has expanded our business to encompass two additional sectors: (i) online services and (ii) infrastructure solutions. In connection with this shift, we are beginning to offer content through our main web portal INFO.VN, and are developing products and services for consumers based on a “freemium” model, which offers users both free and paid premium services, in an effort to attract and engage a broader group of consumers and encourage adoption of our upgraded premium services.

Consistent with our focus on content, online services and generating online advertising revenues, we have begun executing a long term strategic plan to reinvigorate growth in our revenues and profits by taking advantage of the Vietnamese market’s migration of commerce, information and advertising to the Internet. Our strategy is to focus our resources on Dot VN’s core competitive strengths in web portals, consumer and business applications, while expanding the presence of our advertising and paid services, content, product and service offerings on multiple platforms and digital devices centered on Dot VN’s INFO.VN web portal. Particular areas of strategic emphasis include:

·	Developing Exclusive Content Offerings. We are expanding our offerings of relevant and engaging online consumer content by focusing on the creation and development of exclusive original content targeted at the Vietnamese Market.
·	Pursuing Local Focused Initiatives. As of 2009, there were over 415,000 registered businesses in Vietnam. We believe that there are significant opportunities for growth in the area of local content, platforms and services, by providing comprehensive listings covering all geographic areas from local neighborhoods to major metropolitan areas. By enhancing these local offerings we seek to provide consumers with a complete neighborhood experience.
·	Increasing Advertising Sales on Our Own Properties and Developing Third Party Network. We seek to provide premium local and international advertisers with effective and efficient means of reaching Vietnamese consumers. In addition, we seek to create a best of breed third-party advertising network by developing an open, transparent and easy-to-use advertising system that allows advertisers and publishers the ability to find their ideal match.
·	Becoming a Consumer-Friendly Retailer of Subscription Products and Services. Given the nascent stage of online payment in Vietnam, we seek to develop, test and market a first of its kind subscription processing service which manages products and services that are owned by us and by third parties. To facilitate this goal, we are planning to develop a single, consumer-facing platform that will allow us to manage and distribute these additional online products as well as our premium services.

INFO.VN offerings include content produced through a large network of content providers, which includes established journalists and other writers aggregated into one convenient web portal “INFO.VN”. Featured offerings will include the following:

· News & Information; · Travel and Culture; · Entertainment and Sports; and · Marketplace Solutions (including Classified Ads and Business Directory Services).

In addition to online services, Dot VN is currently in the process of designing an Internet data center (“IDC” in the singular or “IDCs” in the plural) which will serve as an internal data and telecommunications network within the country of Vietnam for Dot VN’s Online Services. The IDCs will provide web hosting, collocation, and disaster recovery services as well as serve as the basic infrastructure for additional Internet and data technologies such as virtual fiber connectivity, distance e-learning and e-government projects. The Company has secured a 35-year lease, ending September 21, 2043, for approximately 8,768 square meters of land in the Danang Industrial Zone in Danang City, Vietnam upon which it intends to construct a dedicated IDC building. The IDC developments are anticipated to occur in the mid-term. In the long term, the Company intends to develop additional IDCs in the rest of the Country of Vietnam.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

2. Organization (continued)

The Company (continued)

~~Dot~~ INFO.VN ~~has~~offerings ainclude ~~signed~~content ~~agreement~~produced ~~with~~through ~~E-Band~~a ~~Communications~~large ~~Corporation~~network ~~providing~~of ~~the~~content ~~Company~~providers, ~~the~~which ~~right~~includes toestablished ~~distribute~~journalists ~~E-Band’s~~and ~~multi-gigabit~~other ~~capacity~~writers ~~virtual~~aggregated ~~fiber~~into ~~systems~~one ~~and~~convenient ~~related~~web ~~E-Band~~portal ~~technology and services (the~~ “~~E-Band Products~~INFO.VN”). Featured inofferings ~~Vietnam,~~will asinclude ~~well as,~~ the ~~right to distribute E-Band Products in Cambodia, Thailand and Laos.~~following:

~~Dot~~· VNNews ~~has~~& aInformation; ~~signed~~· ~~agreement~~Travel ~~with Elliptical~~and ~~Mobile~~Culture; ~~Solutions,~~· ~~LLC~~Entertainment ~~(“EMS”)~~and ~~providing~~Sports; ~~the Company the exclusive right to distribute EMS’s micro-modular data centers solutions~~ and ~~related~~· ~~technology~~Marketplace ~~and~~Solutions ~~services~~ (~~the~~including ~~“EMS~~Classified ~~Products”)~~Ads ~~in Vietnam,~~ and ~~the~~Business ~~non-exclusive~~Directory ~~right to distribute EMS Products in Asia~~Services).

Dot VN has a signed agreement with E-Band Communications Corporation providing the Company the right to distribute E-Band’s multi-gigabit capacity virtual fiber systems and related E-Band technology and services (the “E-Band Products”) in Vietnam, as well as, Cambodia, Thailand and Laos.

Dot VN has a signed agreement with Elliptical Mobile Solutions, LLC (“EMS”) providing the Company the right to distribute EMS’s micro-modular data centers solutions and related technology and services (the “EMS Products”) in Vietnam and Asia.

Dot VN will continue to explore and test, and analyze, new and best of breed technologies and applications for deployment in Vietnamese and South East Asian markets.

3. Inventories

Inventories at ~~October~~January 31, 2012 and April 30, 2011 consisted of the following:

	October 31,			April 30,
		January 31,			April 30,
	2011			2011
		2012			2011
Products, held in Vietnam		$	-		$	22,688
Total inventories		$	-		$	22,688

Inventories consists of micro-modular data centers (“MMDC”) units manufactured by EMS stated at the lower of cost, using the first-in first-out method, or market. The MMDC unit in inventory at April 30, 2011 was shipped to Singapore on May 22, 2011 at the request of EMS for a credit on our account.

4. Prepaid expenses and other current assets

Prepaid expenses and other current assets at October 31 and April 30, 2011 consisted of the following:

	October 31,		April 30,
	2011		2011
Prepaid expenses and other advances	$	26,037	$	81,699
Prepaid land lease, Danang City, Vietnam		209,000		215,829
Vietnam value added tax (“VAT”) receivable		4,818		3,368
Domain registration deposits		2,033		7,514
Miscellaneous receivable		28,924		21,711
		270,812		330,121
Less prepaid land lease included in other noncurrent assets (see Note 9)		202,447		209,167
Total prepaid expenses and other current assets	$	68,365	$	120,954

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

4. Prepaid expenses and other current assets

Prepaid expenses and other current assets at January 31, 2012 and April 30, 2011 consisted of the following:

	January 31,		April 30,
	2012		2011

Prepaid expenses and other advances	$	5,795	$	81,699
Prepaid land lease, Danang City, Vietnam		207,122		215,829
Vietnam value added tax (“VAT”) receivable		5,002		3,368
Domain registration deposits		1,160		7,514
Miscellaneous receivable		24,467		21,711
		243,546		330,121
Less prepaid land lease included in other noncurrent assets (see Note 9)		200,577		209,167
Total prepaid expenses and other current assets	$	42,969	$	120,954

On January 15, 2011, in accordance with the terms on a twelve month consulting agreement the Company issued 600,000 restricted shares of the Company’s Common Stock at an agreed contract rate of $0.25 per share to Tomasovich Development. The Company recorded $102,000 as a prepaid expense based on the market close of $0.17. Consulting expense charged to operations was $72,250 and $29,750 for the nine months ended January 31, 2012 and the year ended April 30, 2011. The balance as of January 31, 2012 and April 30, 2011 was zero and $72,250, respectively.

On August 21, 2008, Dot VN Company, Ltd. (Danang City), an entity existing under the laws of the Country of Vietnam (“Dot VN Danang”), a wholly owned subsidiary of the Dot VN, Inc., entered into a Land Sublease Agreement (the “Land Sublease”) with Massda Land Company Limited, an entity existing under the laws of the Country of Vietnam. Pursuant to the Land Sublease, Dot VN Danang leases approximately 8,768 square meters of land known as Lot 47, Danang Industrial Zone, Son Tra District, Danang City, Vietnam, for the express purpose of building an Internet data center and related uses, for a term of approximately 35 years expiring September 21, 2043. Base rent is $32/square meter, excluding the value added tax (“VAT”) and other possible fees and costs, for the term is payable in three installments of 50%, 30% and 20%. Base rent (excluding VAT) of $140,293, $84,175 and $56,118 was paid September 22, 2008, March 16, 2009 and August 27, 2009, respectively. Lease expense charged to operations was $4,956 and $7,035 for the nine months ended January 31, 2012 and the year ended April 30, 2011. On February 29, 2012, the Company used the Land Sublease as security on a $600,000 convertible debenture (see Note 11).

Dot VN Danang is required to bill and collect from its customers a Ten Percent (10%) VAT. In addition, Dot VN Danang can offset its obligation to pay the VAT collected from its customers with the VAT it pays to others during the tax reporting period (typically a calendar quarter) and can request a refund, if the net amount overpaid/collected is greater than 200,000,000 Vietnamese Dong (“đ”) (approximately $10,000). On April 22, 2009, for the period from inception through December 31, 2008, Dot VN Danang received a $13,000 refund of VAT paid, principally on the first payment of the Land Sublease. On November 4, 2009, for the nine month period ending September 30, 2009, Dot VN Danang received a $16,276 refund of VAT paid, principally on the second and final payments of the Land Sublease. In addition, Dot VN Danang has paid $4,191 of accumulated VAT during the twenty-eight month period ending January 31, 2012, for which it will request a future refund from the taxing authority. In addition, IT.VN is also required to bill and collect from its customers a Ten Percent (10%) VAT and can offset its obligation to pay the VAT collected from its customers with the VAT it pays to others during the tax reporting period. As of January 31, 2012, IT.VN has $811 of net VAT paid in excess of amounts collected from its customers and will request a future refund from or offset future obligations owed to the taxing authority.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

4. Prepaid expenses and other current assets (continued)

OnThe ~~January~~Company ~~15,~~maintains ~~2011,~~a incredit ~~accordance~~balance with the ~~terms~~VNNIC onfrom awhich ~~twelve~~it ~~month~~pays ~~consulting agreement~~ the ~~Company~~domain ~~issued~~name ~~600,000~~registration ~~restricted~~and ~~shares~~renewal offees ~~the~~incurred ~~Company’s Common Stock at an agreed contract rate of $0~~daily.~~25 per share to Tomasovich Development.~~ The ~~Company~~balance ~~recorded~~with ~~$102,000~~VNNIC as aof ~~prepaid~~January ~~expense~~31, ~~based~~2012 onand ~~the~~April ~~market~~30, ~~close~~2011 ~~of $0.17. Consulting expense charged to operations~~ was $511,~~000~~160 and $297,~~750 for the six months ended October 31~~514, ~~2011 and the year ended April 30, 2011~~respectively. ~~The~~In ~~balance~~addition, asthe ofCompany ~~October~~maintains 31nominal ~~and~~deposits ~~April~~with ~~30,~~other ~~2011 was $21,250 and $72,250, respectively~~registrars.

OnDuring ~~August~~the 21year ended April 30, ~~2008~~2011, ~~Dot~~the VN Company, ~~Ltd.~~provided ~~(Danang~~administrative ~~City),~~and antechnical ~~entity~~support ~~existing~~and ~~under~~office ~~the~~space ~~laws~~to ofBusiness.VN, ~~the~~Inc., ~~Country~~a ofNevada ~~Vietnam~~corporation, ~~(“Dot~~for VNan ~~Danang”)~~aggregate fee of $2,500 aper ~~wholly~~month ~~owned~~for ~~subsidiary~~May ofand ~~the~~June ~~Dot~~2010 ~~VN,~~and ~~Inc.~~$1,500 ~~entered~~per ~~into~~month afrom ~~Land~~July ~~Sublease~~2010 ~~Agreement~~through ~~(the~~January ~~“Land~~2011. The ~~Sublease”)~~monthly ~~with~~charge ~~Massda~~was ~~Land~~reduced, ~~Company~~effective ~~Limited~~July 1, an2010, ~~entity~~to ~~existing~~reflect ~~under~~ the ~~laws~~reduced level of ~~the~~services ~~Country~~and ofoffice ~~Vietnam. Pursuant~~space being provided to ~~the~~Business.VN, ~~Land~~further ~~Sublease~~on February 1, ~~Dot~~2011 VNthe ~~Danang~~monthly ~~leases~~charge ~~approximately~~was ~~8,768~~stopped ~~square~~when ~~meters~~the ofservices ~~land~~and ~~known~~office asspace ~~Lot~~provided ~~47,~~to ~~Danang~~Business ~~Industrial~~VN ~~Zone~~were terminated. Business.VN, ~~Son~~which ~~Tra~~develops ~~District,~~travel ~~Danang~~related ~~City,~~Internet applications focused on the country of Vietnam, ~~for~~is ~~the~~majority ~~express~~owned ~~purpose~~by ofHi-Tek, ~~building~~Inc. ana ~~Internet~~privately ~~data~~held ~~center~~California ~~and~~corporation ~~related~~(“Hi-Tek ~~uses~~Private”), ~~for~~previously a ~~term~~related ofparty ~~approximately~~(see 35Note ~~years~~11). On ~~expiring~~July ~~September~~25, 212010, ~~2043. Base~~Hi-Tek ~~rent~~Private isinstructed ~~$32/square~~the ~~meter,~~Company ~~excluding~~to reduce the ~~value~~debt ~~added~~it ~~tax~~owes ~~(“VAT”)~~to ~~and~~Hi-Tek ~~other~~Private ~~possible~~(see ~~fees~~Note ~~and~~11) ~~costs~~by $35,000 ~~for~~in ~~the~~satisfaction ~~term~~of isthe ~~payable~~June in30, ~~three~~2010 ~~installments~~balance ofowed ~~50%,~~by ~~30%~~Business.VN ~~and~~to ~~20%~~the Company. ~~Base~~The ~~rent~~remaining ~~(excluding~~balance ~~VAT)~~owed the Company as of ~~$140,293,~~January ~~$84~~31,~~175~~ 2012 and ~~$56~~April 30,~~118~~ 2011 was ~~paid~~$10,500. On ~~September~~February 2229, ~~2008~~2012, ~~March~~Hi-Tek ~~16,~~Private ~~2009~~instructed ~~and~~the ~~August~~Company ~~27,~~to ~~2009,~~reduce ~~respectively. Lease~~the ~~expense~~debt ~~charged~~it owes to ~~operations~~Hi-Tek ~~was~~Private ~~$3,314~~(see ~~and~~Note 11) by $710,~~035~~500 ~~for~~in ~~the~~satisfaction ~~six~~of ~~months~~the ~~ended~~January ~~October~~ 31, 2011 ~~and~~final ~~the~~balance ~~year~~owed ~~ended~~by ~~April~~Business.VN ~~30,~~to ~~2011~~the Company.

Dot VN Danang is required to bill and collect from its customers a Ten Percent (10%) VAT. In addition, Dot VN Danang can offset its obligation to pay the VAT collected from its customers with the VAT it pays to others during the tax reporting period (typically a calendar quarter) and can request a refund, if the net amount overpaid/collected is greater than 200,000,000 Vietnamese Dong (“đ”) (approximately $10,000). On April 22, 2009, for the period from inception through December 31, 2008, Dot VN Danang received a $13,000 refund of VAT paid, principally on the first payment of the Land Sublease. On November 4, 2009, for the nine month period ending September 30, 2009, Dot VN Danang received a $16,276 refund of VAT paid, principally on the second and final payments of the Land Sublease. In addition, Dot VN Danang has paid $3,908 of accumulated VAT during the twenty-five month period ending October 31, 2011, for which it will request a future refund from the taxing authority. In addition, IT.VN is also required to bill and collect from its customers a Ten Percent (10%) VAT and can offset its obligation to pay the VAT collected from its customers with the VAT it pays to others during the tax reporting period. As of October 31, 2011, IT.VN has $910 of net VAT paid in excess of amounts collected from its customers and will request a future refund from the taxing authority.

The Company maintains a credit balance with the VNNIC from which it pays the domain name registration and renewal fees incurred daily. The balance with VNNIC as of October 31 and April 30, 2011 was $2,033 and $7,514, respectively. In addition, the Company maintains nominal deposits with other registrars.

During the year ended April 30, 2011, the Company provided administrative and technical support and office space to Business.VN, Inc., a Nevada corporation, for an aggregate fee of $2,500 per month for May and June 2010 and $1,500 per month from July 2010 through January 2011. The monthly charge was reduced, effective July 1, 2010, to reflect the reduced level of services and office space being provided to Business.VN, further on February 1, 2011 the monthly charge was stopped when the services and office space provided to Business VN were terminated. Business.VN, which develops travel related Internet applications focused on the country of Vietnam, is majority owned by Hi-Tek, Inc. a privately held California corporation (“Hi-Tek Private”), previously a related party (see Note 11). On July 25, 2010, Hi-Tek Private instructed the Company to reduce the debt it owes to Hi-Tek Private (see Note 11) by $35,000 in satisfaction of the June 30, 2010 balance owed by Business.VN to the Company. The remaining balance owed the Company as of October 31 and April 30, 2011 was $10,500.

5. Prepaid warrant expense

The Company has issued warrants for the purchase of shares of the Company’s restricted common stock in connection with raising equity and debt financing and for other professional services. The fair value of warrants issued is determined in accordance with Codification topic 470-20 (see Note 16). The Company recognizes these costs on a straight-line basis; (i) detachable warrants issued in connection with debt instruments are recorded as debt discount (see Note 10) and amortized over the life of the debt to interest expense, (ii) warrants issued as deferred debt issuance costs are recorded as deferred charges (see Note 9) and amortized over the life of the debt to finance expense and (iii) warrants issued for services are recorded as a prepaid warrant expense and amortized over the requisite service period to consulting fees. Changes in the carrying amounts of prepaid service warrants are as follows:

	January 31,		April 30,
	2012		2011

Balance, beginning of the year	$	17,904	$	-
Warrants issued		31,400		63,943
Amortization of warrants		49,304		46,039
Balance, end of period	$	-	$	17,904

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of October 31, 2011

5. Prepaid warrant expense (continued)

	October 31,		April 30,
	2011		2011
Balance, beginning of the year	$	17,904	$	-
Warrants issued		31,400		63,943
Amortization of warrants		46,747		46,039
Balance, end of period	$	2,558	$	17,904

6. Notes receivable

On January 31 and February 9, 2007, the Company issued a series of convertible debentures (see Note 10) for an aggregate of $1,148,212 due January 31, 2009 (the “February Financing”) which convert at the option of each individual noteholder (the “February Investors”) into restricted shares of the Company’s Common Stock at $1.00 per share. The February Financing was funded in conjunction with a like amount of convertible debentures issued concurrently by Spot-On Networks, LLC (“Spot-On”) to the February Investors (the “Spot-On Debenture”). The February Financing terms required that the convertible debentures issued by Spot-On be convertible into either membership units of Spot-On or common stock of the Company, at the option of the February Investors (the “Spot-On Conversion”). Upon the February Investors’ election to convert a Spot-On Debenture into the Company’s Common Stock the Spot-On Debenture is assigned and transferred into the name of the Company (the “Assigned Spot-On Debentures”) at which time the Company issues the Common Stock and records a note receivable. Future monthly interest payments, at Ten Percent (10%) per annum, accrue for the benefit of the Company; during the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011 interest of $1115,~~908~~983 and $23,621 has accrued, respectively. Prior to January 31, 2009 eight (8) Spot-On Debentures totaling $236,213 were converted into the Company’s common stock. On January 31, 2009, at maturity, the Spot-On Conversion right expired and the Assigned Spot-On Debentures principal and accrued interest ($21,438) aggregating $257,651 was due to be paid by Spot-On. On January 30, 2009, the Company received a request from Spot-On to (i) extend the maturity date to March 31, 2009 and (ii) waive any defaults under the Assigned Spot-On Debentures or any of the related documents or events of default which are outstanding or have occurred (the “Spot-On Offer”). The Company did not accept the Spot-On Offer and ~~continues~~continued discussing options to receive the full amount due, with accrued interest. To date the Company has not received any payment from Spot-On on the Assigned Spot-On Debentures and Spot-On is unable to provide the Company with a firm repayment date as they negotiated to raise funds to satisfy their obligation under the Spot-On Debentures.

Spot-On is a private company and does not furnish the Company with financial statements to evaluate their ability to pay the Assigned Spot-On Debentures principal and accrued interest, currently in default. The Company’s ability to collect the Assigned Spot-On Debentures is dependent on Spot-On’s ability to raise additional financing. Due to the uncertainty of collection the Company has recorded a bad debt expense for the full amount of the Assigned Spot-On Debentures principal and does not record the monthly accrual of interest. Interest income ($86,348) will be recognized upon collection from Spot-On.

	October 31,		April 30,
	2011		2011
Notes receivable	$	236,213	$	236,213
Less allowance		236,213		236,213
Notes receivable, net	$	-	$	-

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

6. Notes receivable (continued)

On December 31, 2011, the Company and Spot-On agreed to an exchange, on or before January 31, 2012, whereby the Company would surrender the Assigned Spot-On Debentures with accrued interest as of December 31, 2011, or a portion thereof, for a like dollar amounted owed by the Company, as of December 31, 2011, under the February Financing to those February Investors holding membership units of Spot-On. Spot-On then negotiated directly with thirteen February Investors to acquire the obligation owed to them by the Company. Spot-On acquired eleven obligations with accrued interest and one obligation excluding the accrued interest totaling an aggregate of $308,146 which was then exchanged for six Assigned Spot-On Debentures with accrued interest and a portion of the accrued interest owed on a seventh Assigned Spot-On Debenture (the “Spot-On Exchange”). As a result of the exchange on January 31, 2012, the Company reversed the bad debt expense previously recognized on the six Assigned Spot-On Debentures for an aggregate of $221,213 and recorded $86,933 of interest income for an aggregate Spot-On receivable of $308,146 immediately prior to the exchange. To allow for administrative documentation and processing the exchange was completed on February 15, 2012.

Following completion of the exchange the Company holds two $7,500 Assigned Spot-On Debentures plus accrued interest aggregating $3,738. Due to the remaining uncertainty of collection the Company has retained the bad debt expense for the two remaining Assigned Spot-On Debentures principal and does not record the accrual of interest. Accrued interest income ($3,738) will be recognized upon collection from Spot-On.

	January 31,		April 30,
	2012		2011

Notes receivable	$	15,000	$	236,213
Less allowance		15,000		236,213
Notes receivable, net	$	-	$	-

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

7. Equipment

Equipment at ~~October~~January 31, 2012 and April 30, 2011 consisted of the following:

	October 31,		April 30,
	January 31,		April 30,
	2011		2011
	2012		2011
Computer and server equipment	$	168,~~241~~136	$	144,183
MMDC equipment		32,~~668~~631		33,215
Other furniture and equipment		15,~~360~~352		15,073
Leasehold improvements		3,~~293~~289		3,348
Internet data center, construction in progress		~~880~~903,~~942~~147		838,158
		1,100,504		1,033,977
		1,122,555		1,033,977
Less accumulated depreciation and amortization		9497,~~299~~821		75,886
Equipment, net	$	1,~~006~~024,~~205~~734	$	958,091

Depreciation expense charged to operations was $1822,~~852~~380 and $31,836 for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively. Amortization expense charged to operations was zero and $1,347 for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively. Capitalized interest on borrowings related to the Internet data center was $4264,~~784~~989 and $78,828 for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

8. Intangibles assets

On October 16, 2006, the Company acquired the rights to the US trademark “Dot VN” including its logo and certain related domain names for $360,000 in the form of a two year convertible note (see Note 10) from Hi-Tek Private, previously a related party (see Note 11). The trademark was determined to have an indefinite useful life and is not amortized. On March 8, 2011, the Company filed a declaration of continued use with the United States Patent and Trademark Office to maintain the US Trademark’s registration which was granted on March 18, 2011.

On June 29, 2007, the Company acquired the rights to the Vietnam trademark “Dot VN” from Business.com.VN, Co. Ltd. for 285,000 restricted shares of the Company’s common stock and a convertible note (see Note 10) in the amount of $100,000 due in one year (the “Business.com.VN Agreement”). The note, which accrues no interest during its one year term, was recorded at its present value based on an 8% interest rate assumption. The aggregate consideration of $662,336 was recorded as an indefinite lived intangible asset and is not amortized.

On December 21, 2009, the Company filed a U.S. trademark application on “INFO.VN” and paid $325 in filing fees. On April 12, 2011, the “INFO.VN” trademark application was approved for registration on the supplemental register; the Company is awaiting a response for inclusion on the primary register.

On July 23, 2010, IT.VN filed Vietnam trademark applications on “INFO.VN” and “IT.VN” and paid 10,000,000đ (equivalent to $482) in filing fees. On September 6, 2010, the Vietnam trademarks “INFO.VN and “IT.VN” were provisionally issued by the Vietnamese government to IT.VN. On August 29, 2011 upon the payment of 1,840,000đ (equivalent to $87) the two Vietnam trademarks were affirmed for a ten year period. The Company is the primary beneficiary of the variable interest entity IT.VN.

1819

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

8. Intangibles assets (continued)

Indefinite lived assets are not amortized, but instead are evaluated for impairment annually and if events or changes in circumstances indicate that the carrying amount may not be recoverable in accordance with Codification topic 350-30. If the carrying amount of an intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. After an impairment loss is recognized, the adjusted carrying amount of the intangible asset is its new accounting basis. Subsequent reversal of a previously recognized impairment loss is prohibited. The change in the carrying amount of intangible assets is as follows:

	October 31,			April 30,
	January 31,			April 30,
	2011			2011
	2012			2011
Balance, beginning of the period	$	1,023,143		$	1,022,661
IT.VN trademark application (Vietnam)		44			241
INFO.VN trademark application (Vietnam)		43			241
Foreign currency translation change		(8	)		-
Balance, end of the period	$	1,023,222		$	1,023,143

9. Other noncurrent assets

Other noncurrent assets at ~~October~~January 31, 2012 and April 30, 2011 consisted of the following:

	October 31,		April 30,
	January 31,		April 30,
	2011		2011
	2012		2011
Deposits	$	11,~~434~~431	$	12,043
Deferred debt issuance costs		~~135~~98,~~368~~851		106,655
Prepaid land lease Danang City, Vietnam (see Note 4)		20200,~~447~~577		209,167
Total other noncurrent assets	$	~~349~~310,~~249~~859	$	327,865

Following the January 31, 2009 maturity of the convertible debentures (see Note 10) the Company contacted the February Investors for an extension of the due date in exchange for modified terms, to include an amortized term note (see Note 11) and warrants. The Company issued a series of warrants to thirteen (13) February Investors for the purchase of an aggregate of 36,623 restricted shares of the Company’s Common Stock (see Note 16) with a fair value of $10,754 capitalized as a deferred charge associated with the issuance of these debt instruments. The deferred charge is amortized on a straight-line basis over the approximate thirty-six month term of the debt with $12,~~636~~454 and $3,272 expensed in for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

In connection with the December 30, 2009, issuance of a series of convertible debentures (see Note 10) the Company paid the placement agent a Ten Percent (10%) cash fee ($3,000). The Company capitalized the fee as a deferred charge associated with the issuance of these debt instruments. The deferred charge is amortized on a straight-line basis over the six month term of the debt with zero and $1,000 expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

In connection with the March 12, 2010, issuance of a series of convertible debentures (see Note 10) the Company paid the placement agent a Ten Percent (10%) cash fee ($35,500). The Company capitalized the fee as a deferred charge associated with the issuance of these debt instruments. The deferred charge is amortized on a straight-line basis over the thirty-six month term of the debt with $58,~~917~~875 and $11,833 expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

1920

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

9. Other noncurrent assets (continued)

In connection with the December 10, 2010 amendments of three term debt agreements with IDCG SA de CV, a corporation established under the laws of the Country of Mexico (“IDCG SA”) the Company issued a series of three warrants for the purchase of shares of the Company’s restricted common stock. The December 31, 2010 due date of each loan was extended to September 30, 2011 with no other change to the terms of the notes in exchange for a warrant for the purchase an aggregate of 1,000,000 restricted shares of the Company’s common stock at $0.25 valid for a term of three years. The estimated aggregate fair value of $157,229 was capitalized as a deferred charge associated with the loan extensions and will be amortized on a straight-line basis over the nine month extension period. On March 31, 2011, the Company issued IDCG 1,033,579 restricted shares of the Company’s Common Stock at $0.25 per unit as the full and final payment of the second of the three term notes recorded as a $258,395 payment of Vina Mex Second Loan (see Note 11). The unamortized deferred charge on the second of the three notes ($20,964) was expensed. An aggregate of $69,879 and $87,350 was expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

In connection with the January 18, 2011 cancellation of the two month promissory note and issuance of a new six month promissory note the Company issued G.F. Galaxy Corporation a warrant for the purchase of 200,000 shares of the Company’s restricted common stock at $0.25 valid for a term of two years (see Note 11). The estimated fair value of $26,064 was capitalized as a deferred charge associated with the loan extension and ~~will~~was be amortized on a straight-line basis over the six month period with $11,~~294~~295 and $14,769 expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

In connection with the May 26, 2011 and August 23, 2011, issuance of convertible debentures (see Note 10) the Company paid Asher Enterprises, Inc. (“Asher”) a cash fee of $2,500 and $3,000 for loan origination costs, respectively. The Company capitalized the fees as a deferred charge associated with the issuance of this debt instruments. The deferred charge is amortized on a straight-line basis over the nine month term of each debt instrument. A ~~with~~proportional amount of the unamortized deferred charge is expensed upon a proportional conversion of the debt into common stock of the Company. An aggregate of $23,~~056~~938 and zero expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

In connection with the August 18, 2011 cancellation of the January 18, 2011 promissory note and issuance of a new eleven month promissory note, the Company issued G.F. Galaxy Corporation 100,000 restricted shares on the Company’s Common Stock recorded as a $12,000 deferred debt issuance costs based on the market close of $0.12 and a warrant for the purchase of 1,300,000 shares of the Company’s restricted common stock recorded at the estimated fair value of $127,327 as a deferred debt issuance costs ~~associated~~. The aggregate $139,327 will be amortized on a straight-line basis over the eleven month period of the loan extension with $2563,~~332~~330 and zero expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively.

20On August 18, 2011, the Company issued Owen Morrissey a warrant for the purchase of 21,040 shares of the Company’s restricted common stock at $0.05 valid for a term of three years recorded at the estimated fair value of $2,228 (see Note 11) as a deferred debt issuance cost. The warrant was issued to waive any default for prior unpaid interest and was expenses when issued.

In connection with the January 24, 2012, issuance of a three year convertible debenture (see Note 10) the Company issued an aggregate 100,000 restricted shares on the Company’s Common Stock recorded as a $4,500 deferred debt issuance costs based on the market close of $0.045 and a warrant for the purchase of 71,000 shares of the Company’s restricted common stock recorded at the estimated fair value of $2,640 as a deferred debt issuance costs. The deferred charges will be amortized on a straight-line basis over the thirty-six month period of the debenture starting in February 2012.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes

As of ~~October~~January 31, ~~2011~~2012, convertible notes consist of the following:

	Issued date	Maturity	Conversion price		Amount		Debt discount			Accrued interest		Net amount
Convertible Note 1	Oct. 16, 2006	~~Dec.~~July 3120, ~~3011~~2012	$	0.10024	$	200,000	$	-		$	1,713	$	201,713
Convertible Notes 2	Feb. 9, 2007	Jan. 31, 2009	$	1.00000		-		-			-		-
Convertible Note 3	June 29, 2007	Dec. 31, 2010	$	0.20200		-		-			-		-
Convertible Notes 4	Aug. 1, 2007	Aug. 1, 2008	$	1.43430		-		-			-		-
Convertible Notes 5	Aug. 14,2008	Mar. 31, 2009	$	1.43430		-		-			-		-
Convertible Notes 6	Apr. 20, 2009	Dec. 31, 2009	$	0.30300		-		-			-		-
Convertible Note 7	July 6, 2009	Mar. 31, 2012	$	0.11027		113,244		-			2325,~~048~~815		~~136~~139,~~292~~059
Convertible Notes 8	Nov. 17, 2009	Mar. 31, 2012	$	0.11027		857,943		-			4462,~~014~~324		~~901~~920,~~957~~267
Convertible Notes 9	Dec. 30, 2009	June 30, 2010	$	0.28280		25,000		-			34,~~966~~596		2829,~~966~~596
Convertible Notes 10	Mar. 12, 2010	Mar. 12, 2013	$	0.19178		~~561~~536,333		(~~144~~145,~~832~~202	)		8087,~~390~~013		~~496~~478,~~891~~144
Convertible Notes 11	Mar. 12, 2010	Mar. 12, 2013	$	0.19178		678,667		(~~171~~182,~~172~~815	)		~~111~~128,~~094~~201		~~618~~624,~~589~~053
Convertible Notes 12	June 17, 2010	June 17, 2013	$	0.10024		617,246		(7765,~~662~~645	)		83101,~~613~~526		~~523~~653,~~197~~027
Convertible Note13	May 26, 2011	Feb. 28, 2012				45,000		(20,000	)		1,519		26,519
Convertible Note 13	May 26, 2011	Feb. 28, 2012		varies		37,000		(4,111	)		2,364		35,253
Convertible Note14	Aug. 23, 2011	May 25, 2012				50,000		(25,926	)		660		24,734
Convertible Note 14	Aug. 23, 2011	May 25, 2012		varies		50,000		(31,482	)		1,688		20,206
						3,148,433		(439,592	)		350,017		3,058,858
Convertible Note 15	Jan. 24, 2012	Jan. 24, 2015	$	0.050		50,000		(17,037	)		96		33,059
Less notes 1, 7, 8 and 11 included in due to related parties (see Note 12)						1,849,854		(171,172	)		179,869		1,858,551
						3,165,433		(446,292	)		415,236		3,134,377
Less notes 9, 13 and 14 included in short-term convertible debt						120,000		(45,926	)		6,145		80,219
Less notes 1, 7, 8 and 11 included in due to related parties (see Note 12)						1,849,854		(182,815	)		218,053		1,885,092
Long-term convertible notes, net of current portion					$	1,178,579	$	(222,494	)	$	164,003	$	1,120,088
Less notes 9, 13 and 14 included in short-term convertible debt						112,000		(35,593	)		8,648		85,055
Long-term convertible notes, net of current portion					$	1,203,579	$	(227,884	)	$	188,535	$	1,164,230

Convertibles Note 1 for $360,000 was issued on October 16, 2006 with a two year term, converts at the option of the holder into restricted shares of the Company’s Common Stock at $1.00 per share (the “Conversion Price”) and bears an interest rate of Ten Percent (10%) per annum. The Conversion Price shall be adjusted downward in the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price below the Conversion Price, to a price equal to such issue price. The note is payable to Hi-Tek Private, a former related party (see Note 11), (the “Hi-Tek Trademark Loan”) (see Note 8). The beneficial conversion feature was calculated to be $360,000 at the time of issuance in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On October 13, 2008, the Hi-Tek Trademark Loan was amended to extend the due date to June 30, 2009, with no other change to the terms of the note or the conversion feature. On June 25, 2009, the Hi-Tek Trademark Loan was amended to extend the due date to December 31, 2009, with no other change to the terms of the note or the conversion feature. On December 4, 2009, the Hi-Tek Trademark Loan was amended to extend the due date to June 30, 2010, with no other change to the terms of the note or the conversion feature. On May 19, 2010, the Hi-Tek Trademark Loan was amended to extend the due date to December 31, 2010 and split the note in two separate convertible notes. The first note for $200,000 includes a new provision for the monthly payment of interest effective July 1, 2010 in arrears, there were no other change to the terms of the original note or the conversion feature (“Hi-Tek Trademark Loan One”). The second note for $314,968 did not change the interest accrual or payment terms; there were no other change to the terms of the original note or the conversion feature (“Hi-Tek Trademark Loan Two”). Also on May 19, 2010, Hi-Tek Private assigned the Hi-Tek Trademark Loan One to Mr. Howard Johnson, a related party. Mr. Johnson is the father of Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors and Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the four extensions. On January 14, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 9) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.30 per share (the “December Debentures”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan is reduced to $0.30 per share consistent with the December Debentures. On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan is reduced to $0.20 per share consistent with the March Debentures. The additional beneficial conversion feature was calculated to be zero on January 14, 2010 and March 12, 2010 in accordance with Codification topic 470-20. On December 13, 2010, Hi-Tek Private elected to convert the full amount due on the Hi-Tek Trademark Loan Two ($333,365) into 1,666,825 restricted shares of the Company’s Common Stock at $0.20 per share. On December 28, 2010, the Hi-Tek Trademark Loan One was amended to extend the due date to June 30, 2011, with no other change to the terms of the note or the conversion feature. ~~Additionally,~~ onOn June 29, 2011, the Hi-Tek Trademark Loan One was further amended to extend the due date to December 31, 2011, with no other change to the terms of the note or the conversion feature. Additionally, on December 29, 2011, the Hi-Tek Trademark Loan One was further amended to extend the due date to July 20, 2012, with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.10024 per share consistent with the ~~Galaxy~~Asher ~~3rd.~~First ~~Loan~~Conversion. The additional beneficial conversion feature was calculated to be zero on August 18 and December 5, 2011 in accordance with Codification topic 470-20. As ofThe ~~October~~Company ~~31,~~has ~~2011,~~accrued ~~the unamortized debt discount was zero. Accrued~~ interest was $1,713 and zero on the Hi-Tek Trademark Loan One and the Hi-Tek Trademark Loan Two at ~~October~~January 31, ~~2011~~2012, respectively. As of January 31, 2012, the unamortized debt discount was zero. On ~~December~~February 51, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~533,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.~~024~~012 per share consistent with the Asher ~~First~~Third Conversion. The additional beneficial conversion feature was calculated to be zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

2122

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible Notes 2 are a set of sixteen (16) convertible debentures with an aggregate face value, net of conversions, of $949,500 issued January 31 and February 9, 2007 (the “February Debentures”) which ~~are~~were due January 31, 2009 (the “February Financing”). The convertible debentures bear no interest until July 2007 at which point they accrue Ten Percent (10%) per annum with interest payable monthly. The Company accrued interest over the term of the February Debentures at an imputed rate of approximately Eight Percent (8%) per annum effective from the date the convertible debentures were issued. The debentures converted at the option of each individual noteholder (the “February Investors”) into restricted shares of the Company’s Common Stock at $1.00 per share; representing a beneficial conversion feature. In addition, the February Investor received a detachable warrant exercisable into restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 30% of the note face value for an aggregate of 344,465 restricted shares. The detachable warrants have an exercise price of $2.00 per share and a term of five years from the date of issuance. The combined fair value of the beneficial conversion feature and detachable warrants, calculated in accordance with Codification topic 470-20, is limited to the proceeds of the debt and was allocated between the beneficial conversion feature and detachable warrants as $888,258 and $259,954, respectively. The beneficial conversion feature and detachable warrants were recorded as debt discount with a corresponding credit to additional paid-in capital and were amortized over the life of the February Debentures.

The Company did not repay the $949,500 due the sixteen (16) February Investors and is negotiating an extension of the due date with the February Investors. During March 2009, six (6) of the February Investors agreed to modify the terms of their February Debentures aggregating $125,000 as follows: (i) the February Debenture plus the unpaid liquidated damages ($10,125) are combined into a single amortized term note for each of the six (6) February Investors, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in March, and (iv) commencing April 1, 2009, the unpaid balance will be amortized over thirty-five (35) equal monthly payments. On April 13, 2009, one (1) of the February Investors agreed to modify the terms of his $49,500 February Debentures as follows: (i) the February Debenture plus the unpaid liquidated damages ($4,455) are combined into a single amortized term note, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in April for March, and (iv) commencing April 1, 2009, the unpaid balance will be amortized over thirty-five (35) equal monthly payments. During May 2009, three (3) of the February Investors agreed to modify the terms of their February Debentures aggregating $112,500 as follows: (i) the February Debenture plus the unpaid liquidated damages ($10,125) are combined into a single amortized term note for each of the three (3) February Investors, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in May, and (iv) commencing June 1, 2009, the unpaid balance will be amortized over thirty-six (36) equal monthly payments. On August 25, 2009, three (3) of the February Investors agreed to modify the terms of their February Debentures aggregating $50,000 as follows: (i) the February Debenture plus the unpaid liquidated damages ($4,500) are combined into a single amortized term note, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in September, and (iv) commencing October 1, 2009, the unpaid balance will be amortized over thirty-nine (39) equal monthly payments. In addition, warrants aggregating 36,623 restricted shares were issued to the thirteen (13) February Investors, upon agreeing to modify the terms of their February Debentures, with a $2 exercise price expiring on January 31, 2012 (collectively the “Extended Notes”).

2223

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

On June 17, 2010, one (1) February Investor agreed to modify the terms of their February Debenture aggregating $500,000 as follows: (i) the unpaid February Debenture plus accrued interest at Ten Percent (10%) per annum for the period February 1, 2009 through May 31, 2010 was exchanged for a new $571,000 convertible debenture and (ii) the unpaid $45,000 in liquidated damages plus accrued interest at Ten Percent (10%) per annum for the period February 1, 2009 through May 31, 2010 was exchanged for a new $51,390 convertible debenture (collectively the “Vision Debentures”) (see Convertible Notes 12). Unless otherwise converted into common stock of the Company, the Vision Debentures shall accrue interest at a rate of 10% per annum, interest payable in full, each calendar month starting with December 2010 to be paid on the first of the month and monthly thereafter on the first day of each month, in arrears for the prior month, in cash. All outstanding principal and accrued and unpaid interest shall become due June 17, 2013. At any time prior to or at the due date all principal and accrued interest due may be converted, in whole or in part at any time and from time to time, into common stock of the Company at $0.25 per share (the “Vision Conversion Price”) at the option of the holder; representing a beneficial conversion feature. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $88,121. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the Vision Debentures (three years). If the Company, at any time while the amount of a debenture outstanding is equal to or greater than Fifty Percent (50%) of the debenture principal, shall issue securities or convertible securities, as defined, entitling the recipient to shares or the right to convert into shares of Common Stock at a price per share less than the Vision Conversion Price (the “New Securities Price”), then the Vision Conversion Price, of the so affected Vision Debenture, shall be reduced to the New Securities Price (the “New Vision Conversion Price”), as defined.

Two (2) February Investors holding February Debentures aggregating $112,500 have not responded to the Company’s request to modify their repayment terms, these amounts, which are no longer convertible into common stock of the Company, are included under term-debt as a current obligation (see Note 11). The February Debentures were funded in conjunction with a like amount of convertible debentures issued concurrently by Spot-On ~~Networks, LLC (“Spot-On”)~~ to the February Investors. The terms of the February Debentures required that the convertible debentures issued by Spot-On be convertible into either membership units of Spot-On or common stock of the Company (the “Spot-On Conversion”), at the option of the February Investors (see Note 6). The Spot-On Conversion right expired on January 31, 2009.

On February 9, 2007, in connection with the February Debentures, the Company executed an investor’s registration rights agreement (the “IRRA”) by and between the February Investor participating in the February Debentures and the Company. Pursuant to the terms of the IRRA, in connection with the February Debentures, the Company is required to file a registration statement on Form S-1 or SB-2 by August 15, 2007 (the “Registration Deadline”) and further required that the registration statement be declared effective 120 days from the date of the IRRA filing. In the event that the Registration Deadline is not met, the February Investors shall be entitled to liquidated damages equal to One Percent (1%) of the outstanding convertible debentures issued in the February Debentures paid, at the option of the February Investors, in cash or restricted shares of the Company’s Common Stock (the “Liquidated Damages”) for every thirty (30) day period that the registration statement is not filed, limited to a total of ten such 30-day periods. On August 10, 2007, in accordance with the requirements of Section 9 of the IRRA, the Company and certain February Debentures Investors representing two-thirds (2/3) of the amount invested executed an amendment to the IRRA whereby (i) the Registration Deadline was extended to September 15, 2007 (the “New Registration Deadline”); (ii) the February Investors received the Liquidated Damages for one month; and (iii) the registration statement must be declared effective within sixty (60) days if there are no comments by the SEC or within in ninety (90) days if SEC comments are received (the “Effectiveness Deadline”). In the event that either the New Registration Deadline or the Effectiveness Deadline is not met, then the February Investors shall be entitled to the Liquidated Damages for every thirty (30) day period that the New Registration Deadline or the Effectiveness Deadline are not met, limited to a total of ten such 30-day periods (see Note 13).

2324

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible Note 3 for $100,000 was issued on June 29, 2007 to Business.com.VN, a Vietnamese company, converts at the option of the holder into shares of the Company’s restricted Common Stock at $1.43 per share (the “Conversion Price”) and bears no interest during the one year term. The note was recorded at the present value of $92,336 based on the stated default interest rate of Eight Percent (8%) per annum after the original maturity date of June 29, 2008 (see Note 8) (the “Business.com.VN Loan”). The Conversion Price shall be adjusted downward in the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price below the Conversion Price, to a price equal to such issue price. The beneficial conversion feature was calculated to be $39,860 at the time of issuance in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On July 23, 2008, the Business.com.VN Loan was amended to extend the due date to June 30, 2009 and accrue interest at the rate of Eight Percent (8%) per annum; there was no change to the conversion feature. On June 25, 2009, the Business.com.VN Loan was amended to extend the due date to December 31, 2009, with no other change to the terms of the note or the conversion feature. On December 4, 2009, the Business.com.VN Loan was amended to extend the due date to June 30, 2010, with no other change to the terms of the note or the conversion feature. Additionally, on June 25, 2010, the Business.com.VN Loan was further amended to extend the due date to December 31, 2010, with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the four extensions. On January 14, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 9) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.30 per share (the “December Debentures”). Accordingly, the Conversion Price of the Business.com.VN Loan is reduced to $0.30 per share consistent with the December Debentures; representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $52,476 on January 14, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Conversion Price of the Business.com.VN Loan is reduced to $0.20 per share consistent with the March Debentures; representing a beneficial conversion feature. In accordance with Codification topic 470-20, there is no additional beneficial conversion feature on March 12, 2010. The additional January 14, 2010 beneficial conversion feature is amortized over the remaining term (June 30, 2010) of the Business.com.VN Loan. On December 13, 2010, Business.com.VN elected to convert the full amount due on the Business.com.VN Loan ($121,674) into 608,372 restricted shares of the Company’s Common Stock at $0.20 per share.

Convertible Notes 4 were a set of two individual notes with an aggregate face value of $3,978,132 issued August 1, 2007 to Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, (50%) (the “TJ First Note”) and Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, (50%) (the “LJ First Note”) issued in satisfaction of unpaid accrued salary, including interest, from January, 2003 through June, 2007 by each of Mr. Thomas Johnson and Dr. Lee Johnson under their respective employment agreements with the Company. The notes are due August 1, 2008 and accrued interest monthly at Eight Percent (8%) per annum (see Note 12). At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion Price, to a price equal to such issue price. The beneficial conversion feature was calculated to be an aggregate of $1,446,594 at the time of issuance in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On August 14, 2008, the unpaid notes and accrued interest ($343,401) were cancelled and replaced with new convertible notes with materially the same terms and conditions as Convertible Notes 4, with an aggregate face value of $4,321,533 issued to Mr. Thomas Johnson (50%) and Dr. Lee Johnson (50%) (see Convertible Notes 5).

2425

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion Price, to a price equal to such issue price. The beneficial conversion feature was calculated to be an aggregate of $1,446,594 at the time of issuance in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On August 14, 2008, the unpaid notes and accrued interest ($343,401) were cancelled and replaced with new convertible notes with materially the same terms and conditions as Convertible Notes 4, with an aggregate face value of $4,321,533 issued to Mr. Thomas Johnson (50%) and Dr. Lee Johnson (50%) (see Convertible Notes 5).

Convertible Notes 5 are a set of two individual notes with an aggregate face value of $4,321,533 issued August 14, 2008 to Mr. Thomas Johnson (50%) (the “TJ Second Note”) and Dr. Lee Johnson (50%) (the “LJ Second Note”) in exchange for the unpaid balance owed under Convertible Notes 4 which were cancelled. The notes were due February 15, 2009 and accrued interest monthly at Eight Percent (8%) per annum (see Note 12). At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price (the “Subsequent Price”) below the Conversion Price, to a price equal to the Subsequent Price. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of issuance. On February 15, 2009, the TJ Second Note and the LJ Second Note were amended to extend the due date thirty days to March 17, 2009 with no other change to the terms of the notes or the conversion feature. On March 17, 2009, the TJ Second Note and the LJ Second Note were further amended to extend the due date fourteen days to March 31, 2009 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the two extensions. On April 20, 2009, the unpaid notes and accrued interest ($239,729) were cancelled and replaced with new convertible notes with materially the same terms and conditions as Convertible Notes 5, issued to Mr. Thomas Johnson (50%) and Dr. Lee Johnson (50%), except that in the new notes the adjusted Conversion Price is established as One Hundred Ten Percent (110%) of the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price (see Convertible Notes 6).

Convertible Notes 6 are a set of two individual notes with an aggregate face value of $5,769,316 issued April 20, 2009 to Mr. Thomas Johnson (50%) (the “TJ Third Note”) and Dr. Lee Johnson (50%) (the “LJ Third Note”) (i) in exchange for the unpaid balance owed under Convertible Notes 5 ($4,561,262) which were cancelled and (ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through January 31, 2009 by each of Mr. Thomas Johnson ($604,027) and Dr. Lee Johnson ($604,027) under their respective employment agreements with the Company. The notes were due October 16, 2009 and accrued interest monthly at Eight Percent (8%) per annum (see Note 12). At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of issuance. On October 12, 2009, the TJ Third Note and the LJ Third Note were amended to extend the due date to December 31, 2009 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the extension. On November 17, 2009, the Company agreed to a 50% conversion of the outstanding balances held by Mr. Thomas Johnson ($1,510,489.50) and Dr. Lee Johnson ($1,510,489.50) at $0.30 per share and issued 5,034,965 restricted shares of the Company’s Common Stock and a $1,510,489.41 convertible note due June 30, 2010 with materially the same terms as the cancelled notes each to Mr. Thomas Johnson and Dr. Lee Johnson, except that in the new notes the amount due and owing pursuant to such note may be converted, or any portion thereof, into restricted shares of the Company’s Common Stock (see Convertible Notes 8).

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of October 31, 2011

10. Convertible notes (continued)

Convertible Note 7 for $113,244 was issued on July 6, 2009 to Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director, in satisfaction of unpaid accrued salary, including interest, from August 7, 2007 through July 6, 2009 under Mr. Huynh’s employment agreement with the Company (the “Huynh Note”). The note was due October 16, 2009 and accrues interest monthly at Eight Percent (8%) per annum (see Note 12). The Company has accrued interest of $23,048 at October 31, 2011. The beneficial conversion feature was calculated to be zero at the time of issuance in accordance with Codification topic 470-20. At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.46 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On October 12, 2009, the Huynh Note was amended to extend the due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On December 29, 2009, the Huynh Note was amended to extend the due date to June 30, 2010 with no other change to the terms of the note or the conversion feature. On June 29, 2010, the Huynh Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the Huynh Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the note or the conversion feature. Additionally, on September 29, 2011, the Huynh Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the five extensions. On January 14, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 9) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.30 per share (the “December Debentures”). Accordingly, the Adjusted Conversion Price of the Huynh Loan is reduced to $0.33 per share (the December Debentures conversion price of $0.30 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $40,732 on January 14, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the Huynh Note. On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Adjusted Conversion Price of the Huynh Loan is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $56,622 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion features are amortized over the remaining term (June 30, 2010) of the Huynh Note. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the Huynh Loan is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $15,890 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the Huynh Note. As of October 31, 2011 the unamortized debt discount was zero. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh Loan is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible ~~Notes~~Note 87 ~~are~~for ~~a set of two individual notes with an aggregate face value of~~ $3113,~~020,979~~244 was issued ~~November~~on 17July 6, 2009 to Mr. ~~Thomas~~Louis ~~Johnson (50%) (the “TJ Fourth Note”) and Dr~~P. ~~Lee~~Huynh, ~~Johnson~~formerly ~~(50%) (~~the ~~“LJ~~Company’s ~~Fourth~~General ~~Note”)~~Counsel, inExecutive ~~exchange~~Vice ~~for~~President ~~the~~of ~~unpaid~~Operations ~~balance~~and ~~owed~~Business ~~under~~Development, ~~Convertible~~Corporate ~~Notes~~Secretary 6,and ~~which~~a ~~were cancelled~~Director, ~~following~~in ~~the~~satisfaction ~~50% conversion~~ of ~~the~~unpaid ~~outstanding~~accrued ~~balances~~salary, ~~held~~including ~~by Mr. Thomas Johnson ($1~~interest,~~510,489.50)~~ ~~and~~from ~~Dr.~~August ~~Lee Johnson ($1~~7,~~510,489.50)~~ at2007 ~~$0.30~~through ~~per~~July ~~share and issued 5~~6,~~034,965~~ ~~restricted~~2009 ~~shares~~under ofMr. ~~the Company~~Huynh’s ~~Common~~employment ~~Stock~~agreement towith ~~each~~the toCompany ~~Mr.~~(the ~~Thomas~~“Huynh ~~Johnson and Dr~~Note”). ~~Lee Johnson.~~ The ~~notes~~note ~~were~~was due ~~June~~October 3016, ~~2010~~2009 and ~~accrued~~accrues interest monthly at Eight Percent (8%) per annum (see Note 12). ~~The Company has accrued interest of $44,014 at October 31, 2011.~~ At the election of the holder, the amount due and owing pursuant to such note, ~~or any portion thereof,~~ may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.3046 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). InThe beneficial conversion feature was calculated to be zero at the time of issuance in accordance with Codification topic 470-20. On October 12, ~~there~~2009, isthe noHuynh ~~beneficial~~Note ~~conversion~~was ~~feature~~amended atto extend the ~~time~~due date to December 31, 2009 with no other change to the terms of ~~issuance~~the note or the conversion feature. On ~~June~~December 29, ~~2010~~2009, the TJHuynh ~~Fourth~~ Note ~~and~~was amended to extend the LJdue ~~Fourth~~date to June 30, 2010 with no other change to the terms of the note or the conversion feature. On June 29, 2010, the Huynh Note ~~were~~was amended to extend the due date to December 31, 2010 with no other change to the terms of the ~~notes~~note or the conversion feature. On December 13, 2010, the TJHuynh ~~Fourth~~ Note ~~and~~was ~~the LJ Fourth Note were~~ amended to extend the due date to September 30, 2011 with no other change to the terms of the ~~notes~~note or the conversion feature. Additionally, on September 29, 2011, the TJHuynh ~~Fourth~~ Note ~~and~~was ~~the LJ Fourth Note were~~ further amended to extend the due date to March 31, 2012 with no other change to the terms of the ~~notes~~note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the ~~three~~five extensions. On ~~March~~January 1214, 2010, the Company closed an offering of convertible debentures (see Convertible Notes ~~10 and 11~~9) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.2030 per share (the “~~March~~December Debentures”). Accordingly, the Adjusted Conversion Price of the TJHuynh ~~Fourth~~ Note ~~and~~is ~~the LJ Fourth Note are~~ reduced to $0.2233 per share (the ~~March~~December Debentures conversion price of $0.2030 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be ~~an aggregate of~~ $~~804~~40,~~208~~732 ~~($402,104 each TJ Fourth Note and the LJ Fourth Note)~~ on ~~March~~January 1214, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion ~~features~~feature ~~are~~was amortized over the remaining term (June 30, ~~2010~~2011) of the TJHuynh ~~Fourth~~ Note ~~and the LJ Fourth Note~~. On March 1612, ~~2011~~2010, the Company ~~issued~~closed ~~4,545,455~~an ~~shares~~offering of ~~the~~convertible ~~Company’s~~debentures ~~common~~(see ~~stock~~Convertible toNotes ~~Mr.~~10 ~~Thomas~~and ~~Johnson~~11) ~~pursuant~~which toat the ~~terms~~option of the TJholder ~~Fourth~~converts ~~Note;~~into ~~Mr.~~restricted ~~Thomas~~shares ~~Johnson~~of ~~exercised~~the ~~his~~Company’s ~~right~~Common toStock ~~convert~~at $~~1,000,000,~~0.20 aper ~~portion~~share of (the ~~funds~~“March ~~owed~~Debentures”). Accordingly, ~~to him under~~ the TJAdjusted ~~Fourth~~Conversion ~~Note,~~Price ~~into~~of ~~common~~the ~~stock~~Huynh ofNote ~~the~~is ~~Company~~reduced atto $0.22 per share~~. Also~~ on(the March ~~16,~~Debentures ~~2011,~~conversion ~~the~~price ~~Company~~of ~~issued~~$0.20 ~~6,818,182~~times ~~shares~~110%); ofrepresenting ~~the~~a ~~Company’s~~beneficial ~~common~~conversion ~~stock~~feature. The toadditional ~~Dr.~~beneficial ~~Lee~~conversion ~~Johnson~~feature ~~pursuant~~was calculated to ~~the~~be ~~terms~~$56,622 ofon ~~the~~March LJ12, ~~Fourth~~2010 ~~Note;~~in ~~Dr.~~accordance ~~Lee~~with ~~Johnson~~Codification ~~exercised~~topic ~~his~~470-20; ~~right~~the toCompany ~~convert~~recorded ~~$1,500,000,~~this aamount ~~portion~~as ofdebt ~~the~~discount ~~funds~~with ~~owed~~a corresponding credit to ~~him~~additional ~~under~~paid-in ~~the~~capital. The LJadditional ~~Fourth~~beneficial ~~Note,~~conversion ~~into~~features ~~common~~are ~~stock~~amortized ofover the ~~Company~~remaining atterm ~~$0.22~~(June ~~per~~30, ~~share~~2010) of the Huynh Note. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the TJHuynh ~~Fourth~~ Note ~~and~~is ~~the LJ Fourth Note are~~ reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $~~420~~15,~~251~~890 ~~and $111,304~~ on August 18, 2011 in accordance with Codification topic 470-20 ~~on the TJ Fourth Note and the LJ Fourth Note, respectively~~; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the TJHuynh ~~Fourth~~ Note. On ~~and~~December 5, 2011, pursuant to the LJterms ~~Fourth~~of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh Note is reduced to $0.027 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $25,815 at January 31, 2012. As of ~~October~~January 31, ~~2011~~2012 the unamortized debt discount was zero. On ~~December~~February 51, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~533,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~015 per share (the “Asher ~~First~~Second Conversion”). ~~Accordingly~~On February 17, 2012, pursuant to the ~~Adjusted~~terms ~~Conversion~~of ~~Price~~the Asher First Debenture the Company issued 833,333 shares of the TJCompany’s ~~Fourth~~Common ~~Note~~Stock ~~and~~at a conversion price of $0.012 per share (the LJ“Asher ~~Fourth~~Third Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh Note ~~are~~is reduced to $0.~~0264~~014 per share (the Asher ~~First~~Third Conversion price of $0.~~024~~012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

Convertible Notes 9 are a set of two (2) convertible debentures with an aggregate face value, net of conversions, of $25,000 issued December 30, 2009 (the “December Debentures”). The December Debentures have a six month term and are due June 30, 2010. Interest accrues at Ten Percent (10%) per annum and is due quarterly. The Company has accrued, but unpaid, interest from April 1, 2010 to October 31, 2011 of $3,966. The debentures convert, in whole or in part, at the option of each individual noteholder (the “December Investors”) into restricted shares of the Company’s Common Stock at $0.30 per share (the “Conversion Price”); representing a beneficial conversion feature. In addition, the December Investor received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 100% of the number of shares issuable pursuant to conversion of the debenture for an aggregate of 100,001 restricted shares. The detachable warrants have an exercise price of $0.80 per share, a term of two years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. In the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock), as defined, at a price below the Conversion Price then the Conversion Price shall be subject to a “broad-based” weighted average adjustment (the “BBWA”), as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $5,000; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the December Debentures (six months). On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Conversion Price of the December Debentures is reduced to $0.28 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $2,143 on March 12, 2010 in accordance with Codification topic 470-20. As of October 31, 2011 the unamortized debt discount was zero. On June 10, 2010 one (1) December Investor exercised the conversion option on a $5,000 debenture plus $62 of accrued interest and received 16,873 restricted shares of the Company’s Common Stock and the 16,667 share detachable warrant vested. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $2,162 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible Notes 108 are a set of ~~fifteen~~two ~~(15)~~individual ~~convertible~~notes ~~debentures~~ with an aggregate face value, ~~net~~ of ~~conversions, of~~ $~~836~~3,~~333~~020,979 issued ~~February~~November 1217, ~~February~~2009 ~~26,~~to ~~and~~Mr. ~~March~~Thomas ~~12,~~Johnson ~~2010~~(50%) (the “~~March~~TJ ~~Debentures~~Fourth Note”)~~. The~~ ~~debentures~~and ~~issued~~Dr. ~~February~~Lee ~~12,~~Johnson ~~2010~~(50%) ~~were~~(the ~~issued~~“LJ (iFourth Note”) in ~~satisfaction~~exchange offor ~~three~~the ~~(3)~~unpaid ~~term~~balance ~~notes~~owed ~~due~~under ~~February~~Convertible 18Notes 6, ~~2010~~which ~~aggregating~~were ~~$149~~cancelled,~~216.31~~ ~~and~~following ~~one~~the ~~term~~50% ~~note~~conversion ~~due~~of ~~February~~the ~~28,~~outstanding ~~2010~~balances ~~for~~held by Mr. Thomas Johnson ($721,~~116.76~~510,489.50) ~~with~~and ~~interest~~Dr. ~~accrued~~Lee ~~through~~Johnson ~~February 12~~($1,510,489.50) ~~2010~~at ~~(see~~$0.30 ~~Note~~per ~~11)~~share and ~~(ii)~~issued ~~as an $85~~5,~~000.00~~034,965 ~~partial~~restricted ~~payment~~shares onof the ~~revolving~~Company’s ~~credit~~Common ~~arrangement~~Stock ~~with~~to ~~Hi-Tek~~each ~~Private,~~to ~~previously~~Mr. aThomas ~~related~~Johnson ~~party~~and ~~(see~~Dr. ~~Note~~Lee ~~11)~~Johnson. The ~~single~~notes ~~debenture~~were ~~issued~~due ~~February~~June 2630, 2010 ~~was~~and ~~issued~~accrued ~~(i)~~interest inmonthly ~~satisfaction~~at ofEight ~~four~~Percent (48%) ~~term~~per ~~notes~~annum ~~due~~(see ~~February~~Note ~~28,~~12). At ~~2010~~the ~~aggregating~~election ~~$391,525~~of ~~and~~the ~~(ii) as a $108~~holder,~~475~~ ~~partial~~the ~~payment~~amount ondue aand ~~fifth~~owing ~~term~~pursuant ~~note~~to ~~due~~such ~~March 31~~note, ~~2010,~~or ~~with~~any ~~interest~~portion ~~accrued through February 26~~thereof, ~~2010~~may ~~(see~~be ~~Note~~converted ~~11). The~~in ~~March~~restricted ~~12,~~shares ~~2010~~of ~~debentures~~the ~~were~~Company’s ~~issued~~Common inStock ~~exchange~~at ~~for~~a ~~cash~~per ~~payments~~share ~~aggregating~~price of $~~525,000~~0.0030 ~~from~~per ~~nine~~share (9)the ~~investors~~“Conversion Price”). The ~~March~~Conversion ~~Debentures~~Price ~~have~~shall abe ~~three~~adjusted ~~year~~downward ~~term~~in ~~and~~the ~~are~~event ~~due~~Dot ~~February~~VN ~~12,~~issues ~~February~~common ~~26,~~stock ~~and~~(or ~~March~~securities ~~12,~~exercisable ~~2013. Interest~~for ~~accrues~~or atconvertible ~~Ten~~into ~~Percent~~or ~~(10%)~~exchangeable ~~per~~for ~~annum~~common ~~and~~stock) isat ~~due~~a ~~quarterly. The~~price ~~debentures~~(the ~~convert,~~“Subsequent inPrice”) ~~whole~~below ~~or in part, at~~ the ~~option~~Conversion ofPrice ~~each~~times ~~individual~~Ninety ~~noteholder~~Percent (~~the “March Investors”~~90%), ~~into~~to ~~restricted~~a ~~shares~~price ofequal ~~the~~to ~~Company’s~~such ~~Common~~Subsequent ~~Stock~~Price attimes ~~$0.20~~One ~~per~~Hundred ~~share;~~Ten ~~representing~~Percent a(110%) ~~beneficial~~(the ~~conversion~~“Adjusted ~~feature~~Conversion Price”). In ~~addition,~~accordance ~~the~~with ~~March~~Codification ~~Investor~~topic ~~received~~470-20, athere ~~detachable~~is ~~warrant~~no ~~for~~beneficial ~~restricted~~conversion ~~shares~~feature ofat the ~~Company’s~~time ~~Common Stock; the number~~ of ~~shares~~issuance. On ofJune ~~each~~29, ~~warrant~~2010, isthe ~~equal~~TJ toFourth ~~100%~~Note ofand the ~~number~~LJ ofFourth ~~shares~~Note ~~issuable~~were ~~pursuant~~amended to ~~conversion~~extend of the ~~debenture~~due ~~for~~date anto ~~aggregate~~December ~~of 6~~31,~~656,666~~ ~~restricted~~2010 ~~shares. The~~with ~~detachable~~no ~~warrants~~other ~~have~~change anto ~~exercise~~the ~~price~~terms of ~~$0.30~~the ~~per~~notes ~~share,~~or athe ~~term~~conversion offeature. On ~~three~~December ~~years~~13, ~~from~~2010, the ~~date~~TJ ofFourth ~~issuance,~~Note and ~~vest upon~~ the ~~conversion~~LJ ofFourth ~~the~~Note ~~debenture~~were ~~with~~amended ato ~~partial~~extend ~~debenture~~the ~~conversion~~due ~~vesting~~date ato ~~proportional~~September ~~number~~30, of2011 ~~warrant~~with ~~shares. In~~no ~~the~~other ~~event~~change to the ~~Company~~terms ~~issues~~of ~~common~~the ~~stock~~notes (or ~~securities~~the ~~exercisable~~conversion ~~for~~feature. Additionally, oron ~~convertible~~September ~~into~~29, or2011, ~~exchangeable~~the ~~for~~TJ ~~common~~Fourth ~~stock),~~Note asand ~~defined,~~the atLJ aFourth ~~price~~Note ~~below~~were ~~the~~further ~~Conversion~~amended ~~Price~~to ~~then~~extend the ~~Conversion~~due ~~Price~~date ~~shall~~to beMarch ~~subject~~31, to2012 awith ~~BBWA~~no ~~adjustment,~~other aschange ~~defined. The~~to ~~fair~~the ~~value~~terms of the ~~beneficial~~notes or the conversion feature,. In ~~calculated in~~ accordance with Codification topic 470-20, there is ~~$639,417;~~no ~~excluding the unvested detachable warrants. The~~ beneficial conversion feature isat ~~recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over~~ the ~~life~~time of the ~~March Debentures (~~three ~~years)~~extensions. On ~~August~~March 1812, ~~2011~~2010, the Company ~~issued~~closed aan ~~promissory~~offering ~~note~~of convertible debentures (see ~~Term~~Convertible ~~Note~~Notes 3410 and 11) which ~~included~~at athe ~~warrant~~option ~~for~~of ~~1,300,000~~the holder converts into restricted shares of the Company’s Common Stock ~~exercisable~~ at $0.1020 per share (the “~~Galaxy~~March ~~3rd. Loan~~Debentures”). Accordingly, the Adjusted Conversion Price of the ~~March~~TJ ~~Debentures~~Fourth isNote and the LJ Fourth Note are reduced to $0.1922 per share, ~~consistent~~(the ~~with~~March ~~the~~Debentures ~~BBWA,~~conversion asprice ~~defined~~of $0.20 times 110%); representing a beneficial conversion feature. The ~~additional~~ beneficial conversion feature was calculated to be an aggregate of $44804,~~018~~208 ($402,104 each TJ Fourth Note and the LJ Fourth Note) on ~~August~~March 1812, ~~2011~~2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. OnThe ~~March~~additional ~~22,~~beneficial ~~2010,~~conversion ~~one~~features ~~(1)~~are ~~March~~amortized ~~Investor~~over ~~exercised~~ the ~~conversion~~remaining ~~option~~term on(June ~~$150~~30,~~000~~ 2010) of ~~principal,~~the aTJ ~~portion~~Fourth ofNote ~~their~~and the LJ Fourth Note. On March ~~Debenture~~16, ~~and~~2011, ~~received~~the ~~750,000~~Company ~~restricted~~issued 4,545,455 shares of the Company’s ~~Common~~common ~~Stock~~stock ~~and~~to ~~750,000~~Mr. ~~share~~Thomas ofJohnson ~~the~~pursuant ~~detachable~~to ~~warrant~~the ~~vested. The~~terms ~~fair value~~ of the ~~vested~~TJ ~~detachable~~Fourth ~~warrant,~~Note; ~~calculated~~Mr. inThomas ~~accordance~~Johnson ~~with~~exercised ~~Codification~~his ~~topic~~right ~~470-20,~~to isconvert $711,~~395 and was recorded as debt discount~~000, ~~fully expensed when recorded~~000, ~~with~~ a ~~corresponding~~portion ~~credit~~of tothe ~~additional~~funds ~~paid-in~~owed ~~capital. Upon~~to ~~conversion,~~him ~~$74,729~~under ~~of unamortized debt discount, from~~ the ~~beneficial~~TJ ~~conversion~~Fourth ~~feature~~Note, ~~was~~into ~~also~~common ~~expensed. On~~stock ~~May~~of ~~28, 2010,~~ the ~~same~~Company ~~March~~at ~~Investor~~$0.22 ~~exercised~~per ~~the~~share. Also ~~conversion option~~ on ~~$250~~March 16,~~000~~ ~~of principal~~2011, the ~~remaining~~Company ~~portion~~issued ~~of their March Debenture~~6, ~~and received 1~~818,~~250,000~~182 ~~restricted~~ shares of the Company’s ~~Common~~common ~~Stock~~stock ~~and~~to ~~1,250,000~~Dr. ~~share~~Lee ofJohnson ~~the~~pursuant ~~detachable~~to ~~warrant~~the ~~vested. The~~terms ~~fair value~~ of the ~~vested~~LJ ~~detachable~~Fourth ~~warrant,~~Note; ~~calculated~~Dr. inLee ~~accordance~~Johnson ~~with~~exercised ~~Codification~~his ~~topic~~right ~~470-20,~~to isconvert $~~118~~1,~~992 and was recorded as debt discount~~500, ~~fully expensed when recorded~~000, ~~with~~ a ~~corresponding~~portion ~~credit to additional paid-in capital. Upon conversion, $117,604~~ of ~~unamortized debt discount, from~~ the ~~beneficial~~funds ~~conversion~~owed ~~feature,~~to ~~was~~him ~~also~~under ~~expensed. Additionally,~~the onLJ ~~June~~Fourth 10Note, ~~2010,~~into ~~the~~common ~~same~~stock ~~March~~of ~~Investor exercised~~ the ~~conversion~~Company ~~option~~at on $~~8,507~~0.22 ofper ~~accrued~~share. On ~~interest~~August ~~and~~18, ~~received 42~~2011,~~535~~ ~~restricted shares of~~ the Company’s ~~Common~~issued ~~Stock. On~~a ~~December~~promissory ~~13,~~note ~~2010, one~~ (1)see ~~March~~Term ~~Investor~~Note ~~(Hi-Tek Private~~34) ~~elected~~which toincluded ~~convert~~a ~~the~~warrant ~~full~~for ~~amount due on the March Debenture plus accrued interest ($92~~1,~~079) into 460~~300,~~398~~000 restricted shares of the Company’s Common Stock ~~and~~exercisable ~~the~~at ~~425,000 share detachable warrant vested~~$0. ~~The~~10 ~~fair~~per ~~value~~share of (the ~~vested~~“Galaxy ~~detachable~~3rd. ~~warrant~~Loan”). Accordingly, ~~calculated~~the inAdjusted ~~accordance~~Conversion ~~with~~Price ~~Codification~~of ~~topic~~the ~~470-20,~~TJ isFourth ~~$42,500~~Note and ~~was~~the ~~recorded~~LJ asFourth ~~debt~~Note ~~discount,~~are ~~fully~~reduced ~~expensed~~to ~~when~~$0.11 ~~recorded,~~per ~~with~~share a(the ~~corresponding~~Galaxy ~~credit~~3rd. toLoan ~~additional~~warrant ~~paid-in~~price ~~capital. Upon~~of ~~conversion,~~ $~~31,167~~0.10 oftimes ~~unamortized~~110%); ~~debt~~representing ~~discount,~~a ~~from the~~ beneficial conversion feature~~, was also expensed~~. OnThe ~~August~~additional ~~31,~~beneficial ~~2011,~~conversion ~~one~~feature ~~(1)~~was ~~March~~calculated ~~Investor elected~~ to ~~convert~~be ~~the full amount due on two March Debentures plus accrued interest (~~$~~315~~420,~~459)~~251 ~~into 1,660,312 restricted shares of the Company’s Common Stock~~ and ~~the aggregate 1~~$111,~~375,000~~304 ~~share~~on ~~detachable~~August ~~warrants vested. The fair value of the vested detachable warrants~~18, ~~calculated~~2011 in accordance with Codification topic 470-20, ison ~~$136,776~~the ~~and~~TJ ~~was~~Fourth ~~recorded~~Note asand ~~debt~~the ~~discount~~LJ Fourth Note, ~~fully~~respectively; ~~expensed~~the ~~when~~Company recorded, this amount as debt discount with a corresponding credit to additional paid-in capital. ~~Upon~~The ~~conversion,~~additional ~~$77,724 of unamortized debt discount, from the~~ beneficial conversion feature, was ~~also~~amortized ~~expensed. On~~over ~~April~~the ~~16,~~remaining ~~2010,~~term in(September a30, ~~private~~2011) ~~assignment~~ of athe ~~$50,000~~TJ ~~March~~Fourth ~~Debenture~~Note anand ~~aggregate~~the ofLJ ~~$10,000~~Fourth ~~was assigned to Ms~~Note. On ~~Tran~~December ~~Lee Johnson ($~~5,~~000)~~ ~~and Ms. Lee Tran Johnson ($5~~2011,~~000),~~ ~~both~~pursuant ato ~~related~~the ~~party. Ms.~~terms ~~Tran~~of ~~Lee~~the ~~Johnson~~Asher ~~and~~First ~~Ms.~~Debenture ~~Lee~~the ~~Tran~~Company ~~Johnson~~issued ~~are~~333,333 ~~the~~shares ~~daughters~~ of ~~Dr. Lee Johnson,~~ the Company’s ~~President,~~Common ~~Chief~~Stock ~~Technology~~at ~~Officer,~~a ~~Chief~~conversion ~~Financial~~price ~~Officer~~of ~~and a Director~~$0. ~~The~~024 ~~two~~per ~~$5,000~~share ~~assigned~~(the ~~March~~“Asher ~~Debentures~~First Conversion”). Accordingly, ~~unamortized~~the ~~debt~~Adjusted ~~discount~~Conversion ~~and~~Price ~~accrued~~of ~~interest~~the ~~have~~TJ ~~been~~Fourth ~~reclassified~~Note asand athe ~~related~~LJ ~~party~~Fourth ~~obligation~~Note ~~and~~ are ~~included~~reduced into ~~Convertible Notes 11 below~~$0. On027 ~~November~~per ~~23,~~share ~~2011, one~~ (~~1) March Investor exercised~~ the ~~conversion~~Asher ~~option~~First onConversion aprice ~~March~~of ~~Debenture~~$0.024 ~~plus~~times ~~accrued interest ($29,301~~110%),; ~~and~~representing ~~received~~a ~~154,218~~beneficial ~~restricted~~conversion ~~shares~~feature. The ofadditional ~~the~~beneficial ~~Company’s~~conversion ~~Common~~feature ~~Stock~~was ~~and~~calculated ~~the~~to ~~125,000~~be ~~share~~zero ~~detachable~~on ~~warrant~~December ~~vested. The fair value of the vested detachable warrant~~5, ~~calculated~~2011 in accordance with Codification topic 470-20,. The isCompany ~~$12,434~~has ~~and~~accrued ~~was~~interest ~~recorded~~of as$62,324 ~~debt~~at ~~discount~~January 31, ~~fully~~2012. As ~~expensed~~of ~~when~~January ~~recorded~~31, ~~with~~2012 athe ~~corresponding~~unamortized ~~credit~~debt todiscount ~~additional~~was ~~paid-in capital~~zero. ~~Upon~~On ~~conversion~~February 1, $52012,~~921~~ ofpursuant ~~unamortized~~to ~~debt~~the ~~discount,~~terms ~~from~~of the ~~beneficial~~Asher ~~conversion~~Second ~~feature,~~Debenture ~~was~~the ~~also expensed. The~~ Company ~~has~~issued ~~accrued interest~~533,333 ~~from~~shares ~~inception,~~ of ~~$80,390~~the Company’s Common Stock at ~~October~~a ~~31,~~conversion ~~2011. As~~price of ~~October~~$0.024 ~~31,~~per ~~2011,~~share (the ~~unamortized~~“Asher ~~debt~~Second ~~discount was $144,832~~Conversion”). On ~~December~~February 517, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~833,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~012 per share (the “Asher ~~First~~Third Conversion”). Accordingly, the Adjusted Conversion Price of the ~~March~~TJ ~~Debentures~~Fourth isNote and the LJ Fourth Note are reduced to $0.18014 per share ~~consistent~~(the ~~with~~Asher ~~the~~Third ~~BBWA,~~Conversion asprice ~~defined~~of $0. 012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be ~~$29,796~~zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible Notes 119 are a set of ~~three~~two (32) convertible debentures with an aggregate face value ~~of $668~~,~~667~~ ~~issued~~net ~~March 12, 2010 with the same terms and conditions as the March Debentures in satisfaction~~ of ~~unpaid accrued salary and interest for (i) Mr. Thomas Johnson~~conversions, ~~the Company’s Chief Executive Officer and Chairman~~ of ~~the Board of Directors from February 1~~$25,000 ~~2009~~issued ~~through~~ December 1230, 2009 (~~$329,510.48),~~the ~~(ii)~~“December DrDebentures”). The ~~Lee~~December ~~Johnson,~~Debentures ~~the~~have ~~Company’s~~a ~~President,~~six ~~Chief~~month ~~Technology~~term ~~Officer, Chief Financial Officer~~ and aare ~~Director,~~due ~~from~~June ~~February 1~~30, ~~2009~~2010. Interest ~~through~~accrues ~~December~~at ~~12,~~Ten ~~2009~~Percent (~~$329,510.48~~10%), ~~and~~per ~~(iii)~~annum ~~Mr.~~and ~~Louis~~is Pdue quarterly. The ~~Huynh, formerly the~~ Company’s ~~General~~has ~~Counsel~~accrued, ~~Executive~~but ~~Vice President of Operations and Business Development~~unpaid, ~~Corporate~~interest ~~Secretary and a Director~~ from ~~July~~April 71, ~~2009~~2010 to January 931, ~~2010~~2012 (of $93,~~645~~966.~~97) under their respective employment agreements with the Company (the “March Officer Debentures”).~~ ~~Interest accrues at Ten Percent (10%) per annum and is due quarterly.~~ The debentures convert, in whole or in part, at the option of each individual noteholder (the “~~March~~December ~~Officer~~ Investors”) into restricted shares of the Company’s Common Stock at $0.2030 per share (the “Conversion Price”); representing a beneficial conversion feature. In addition, the ~~March~~December ~~Officer~~ Investor received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 100% of the number of shares issuable pursuant to conversion of the debenture for an aggregate of 3100,~~346,336~~001 restricted shares. The detachable warrants have an exercise price of $0.3080 per share, a term of ~~three~~two years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. In the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock), as defined, at a price below the Conversion Price then the Conversion Price shall be subject to a ~~BBWA~~“broad-based” weighted average adjustment (the “BBWA”), as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $~~300~~5,~~900~~000; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the ~~March~~December ~~Officer~~ Debentures (~~three~~six ~~years~~months). On ~~August~~March 1812, ~~2011~~2010, the Company ~~issued~~closed aan ~~promissory~~offering ~~note~~of convertible debentures (see ~~Term~~Convertible ~~Note~~Notes 3410 and 11) which ~~included~~at athe ~~warrant~~option ~~for~~of ~~1,300,000~~the holder converts into restricted shares of the Company’s Common Stock ~~exercisable~~ at $0.1020 per share (the “~~Galaxy~~March ~~3rd. Loan~~Debentures”). Accordingly, the Conversion Price of the ~~March~~December ~~Officer~~ Debentures is reduced to $0.1928 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $352,~~719~~143 on ~~August~~March 1812, ~~2011~~2010 in accordance with Codification topic 470-20~~; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital~~. OnThe ~~April~~Company ~~16,~~has ~~2010~~accrued, inbut ~~a private assignment of a $50~~unpaid,~~000~~ ~~March~~interest ~~Debenture~~from ~~(see~~April ~~Convertible Notes 10 above) an aggregate of $10~~1,~~000~~ ~~was~~2010 ~~assigned~~ to ~~Ms.~~January ~~Tran Lee Johnson ($5~~31,~~000)~~ ~~and~~2012 ~~Ms.~~of ~~Lee Tran Johnson (~~$54,~~000), both a related party~~596. ~~Ms.~~As ~~Tran Lee Johnson and Ms. Lee Tran Johnson are the daughters~~ of ~~Dr.~~January ~~Lee Johnson~~31, 2012 the ~~Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The two $5,000 assigned March Debentures,~~ unamortized debt discount ~~and~~was ~~accrued interest have been reclassified as a related party obligation from Convertible Notes 10 and are included in these convertible notes~~zero. ~~The~~On ~~Company~~June ~~has accrued interest~~10, ~~from~~2010 ~~inception,~~one of(1) ~~$111,094~~December atInvestor ~~October~~exercised ~~31, 2011. As of October 31, 2011~~ the ~~unamortized~~conversion ~~debt~~option ~~discount~~on ~~was~~a $~~171,172. On December~~ 5,000 ~~2011,~~debenture ~~pursuant~~plus to$62 ~~the terms~~ of ~~the~~accrued ~~Asher~~interest ~~First~~and ~~Debenture~~received ~~the Company issued 333~~16,~~333~~873 restricted shares of the Company’s Common Stock atand athe ~~conversion~~16,667 ~~price of $0.024 per~~ share ~~(the~~detachable ~~“Asher~~warrant ~~First Conversion”)~~vested. ~~Accordingly,~~The ~~the~~fair ~~Conversion~~value ~~Price~~ of the ~~March~~vested ~~Debentures~~detachable iswarrant, ~~reduced~~calculated toin ~~$0.18~~accordance ~~per~~with ~~share~~Codification ~~consistent~~topic ~~with~~470-20, ~~the~~is ~~BBWA~~$2,162 asand ~~defined. The additional beneficial conversion feature~~ was ~~calculated~~recorded toas bedebt ~~$37~~discount,~~704~~ onfully ~~December~~expensed 5when recorded, ~~2011~~with ina ~~accordance~~corresponding ~~with~~credit ~~Codification~~to ~~topic~~additional ~~470~~paid-20in capital.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible Notes 1210 are a set of ~~two~~fifteen (215) convertible debentures with an aggregate face value, net of conversions, of $836,333 issued ~~June~~February 1712, ~~2010~~February 26, toand ~~one~~March 12, 2010 (1the “March Debentures”). The debentures issued February ~~Investor~~12, ~~who~~2010 ~~agreed~~were toissued ~~modify~~(i) ~~the~~in ~~terms~~satisfaction of ~~their~~three (3) term notes due February ~~Debenture~~18, 2010 aggregating $~~500~~149,~~000~~216.31 asand ~~follows:~~one ~~(i)~~term ~~the~~note ~~unpaid~~due February ~~Debenture~~28, ~~plus~~2010 ~~accrued~~for $72,116.76, with interest ataccrued ~~Ten~~through ~~Percent~~February 12, 2010 (~~10%~~see Note 11) ~~per~~and ~~annum~~(ii) ~~for~~as an $85,000.00 partial payment on the ~~period~~revolving ~~February~~credit 1arrangement with Hi-Tek Private, ~~2009~~previously ~~through~~a ~~May~~related 31party (see Note 11). The single debenture issued February 26, 2010 was ~~cancelled~~issued (i) in ~~exchanged~~satisfaction ~~for~~of afour ~~new~~(4) ~~$570~~term notes due February 28,~~999.85~~ ~~convertible~~2010 ~~debenture~~aggregating $391,525 and (ii) ~~the~~as ~~unpaid~~a $45108,~~000~~475 inpartial ~~liquidated~~payment ~~damages~~on ~~plus~~a ~~accrued~~fifth ~~interest~~term atnote ~~Ten~~due ~~Percent~~March ~~(10%)~~31, ~~per~~2010, ~~annum~~with ~~for~~interest ~~the~~accrued ~~period~~through February 126, ~~2009~~2010 ~~through~~(see ~~May~~Note 3111). The March 12, 2010 ~~was~~debentures ~~exchanged~~were issued in exchange for acash ~~new~~payments aggregating $51525,~~390~~000.00 ~~convertible~~from ~~debenture~~nine (~~collectively~~9) ~~the~~investors. The ~~“Vision~~March Debentures~~”). Unless~~ ~~otherwise~~have ~~converted~~a ~~into~~three ~~common~~year ~~stock~~term ofand ~~the~~are ~~Company~~due February 12, ~~the~~February ~~Vision~~26, ~~Debentures~~and ~~shall~~March ~~accrue~~12, ~~interest~~2013. Interest accrues at aTen ~~rate~~Percent of (10%) per annum and is due quarterly. The debentures convert, ~~interest~~in ~~payable~~whole or in ~~full~~part, ~~each~~at ~~calendar~~the ~~month~~option ~~starting~~of ~~with~~each ~~December~~individual ~~2010~~noteholder to(the be“March ~~paid~~Investors”) oninto ~~the~~restricted ~~first~~shares of the ~~month~~Company’s ~~and~~Common ~~monthly~~Stock ~~thereafter~~at on$0.20 ~~the~~per ~~first~~share; ~~day~~representing ofa ~~each~~beneficial ~~month~~conversion feature. In addition, inthe ~~arrears~~March Investor received a detachable warrant for restricted shares of the ~~prior~~Company’s ~~month,~~Common inStock; ~~cash. As~~the number of shares of each warrant is equal to 100% of the ~~date~~number of ~~this~~shares ~~filing~~issuable ~~only~~pursuant to conversion of the ~~December~~debenture ~~2010~~for ~~monthly~~an ~~interest~~aggregate ~~payment~~of ~~has~~6,656,666 ~~been~~restricted ~~made~~shares. ~~All~~The ~~outstanding~~detachable ~~principal~~warrants ~~and~~have ~~accrued~~an ~~and~~exercise ~~unpaid~~price ~~interest~~of ~~shall~~$0.30 ~~become~~per ~~due~~share, ~~June~~a ~~17,~~term ~~2013. At~~of ~~any~~three ~~time~~years ~~prior~~from tothe ordate atof issuance, and vest upon the ~~due~~conversion ~~date~~of ~~all~~the ~~principal~~debenture ~~and~~with ~~accrued~~a ~~interest~~partial ~~due~~debenture ~~may~~conversion bevesting ~~converted,~~a inproportional ~~whole~~number orof inwarrant ~~part~~shares. In atthe ~~any~~event ~~time~~the ~~and~~Company ~~from~~issues ~~time~~common tostock ~~time,~~(or securities exercisable for or convertible into or exchangeable for common stock), ofas ~~the~~defined, ~~Company~~ at ~~$0.25~~a ~~per~~price ~~share~~below (the ~~“Vision~~ Conversion Price”) atthen the ~~option~~Conversion ofPrice ~~the~~shall ~~holder;~~be ~~representing~~subject to a ~~beneficial~~BBWA ~~conversion~~adjustment, ~~feature~~as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $88639,~~121~~417; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the ~~Vision~~March Debentures (three years). IfOn March 22, 2010, one (1) March Investor exercised the conversion option on $150,000 of principal, a portion of their March Debenture, and received 750,000 restricted shares of the Company’s Common Stock and 750,000 atshare ~~any~~of ~~time~~the ~~while~~detachable warrant vested. The fair value of the ~~amount~~vested detachable warrant, calculated in accordance with Codification topic 470-20, is $71,395 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. Upon conversion, $74,729 of unamortized debt discount, from the beneficial conversion feature, was also expensed. On April 16, 2010, in a ~~debenture~~private ~~outstanding~~assignment isof ~~equal~~a $50,000 March Debenture an aggregate of $10,000 was assigned to orMs. ~~greater~~Tran ~~than~~Lee ~~Fifty~~Johnson ~~Percent~~($5,000) and Ms. Lee Tran Johnson (~~50%~~$5,000), both a related party. Ms. Tran Lee Johnson and Ms. Lee Tran Johnson are the daughters of Dr. Lee Johnson, the ~~debenture~~Company’s ~~principal~~President, ~~shall~~Chief ~~issue~~Technology ~~securities~~Officer, orChief ~~convertible~~Financial ~~securities~~Officer and a Director. The two $5,000 assigned March Debentures, unamortized debt discount and accrued interest have been reclassified as ~~defined~~a related party obligation and are included in Convertible Notes 11 below. On May 28, ~~entitling~~2010, the ~~recipient~~same toMarch ~~shares~~Investor orexercised the ~~right~~conversion tooption ~~convert~~on ~~into~~$250,000 of principal, the remaining portion of their March Debenture, and received 1,250,000 restricted shares of the Company’s Common Stock atand a1,250,000 ~~price~~share ~~per~~of ~~share~~the ~~less~~detachable ~~than~~warrant vested. The fair value of the ~~Vision~~vested ~~Conversion~~detachable ~~Price~~warrant, (calculated in accordance with Codification topic 470-20, is $118,992 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. Upon conversion, $117,604 of unamortized debt discount, from the ~~“New~~beneficial ~~Securities~~conversion ~~Price”)~~feature, ~~then~~was also expensed. Additionally, on June 10, 2010, the ~~Vision~~same ~~Conversion~~March ~~Price~~Investor exercised the conversion option on $8,507 of accrued interest and received 42,535 restricted shares of the soCompany’s ~~affected~~Common ~~Vision~~Stock. On ~~Debenture~~December 13, ~~shall~~2010, beone ~~reduced~~(1) March Investor (Hi-Tek Private) elected to convert the ~~New~~full ~~Securities~~amount ~~Price~~due (on the ~~“New~~March ~~Vision~~Debenture ~~Conversion~~plus ~~Price”~~accrued interest ($92,079) into 460,398 restricted shares of the Company’s Common Stock and the 425,000 share detachable warrant vested. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $42,500 and was recorded as ~~defined~~debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. Upon conversion, $31,167 of unamortized debt discount, from the beneficial conversion feature, was also expensed. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the ~~new~~ Conversion Price of the ~~Vision~~March Debentures is reduced to $0.1019 per share, consistent with the ~~Galaxy~~BBWA, ~~3rd.~~as ~~Loan~~defined. The additional beneficial conversion feature was calculated to be $3444,~~269~~018 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. IfOn August 31, at2011, ~~any~~one ~~time~~(1) March Investor elected to convert the full amount due on two March Debentures plus accrued interest ($315,459) into 1,660,312 restricted shares of the Company’s ~~proposes~~Common toStock ~~file~~and athe ~~registration~~aggregate ~~statement~~1,375,000 share detachable warrants vested. The fair value of the vested detachable warrants, calculated in accordance with Codification topic 470-20, is $136,776 and was recorded as ~~defined~~debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. Upon conversion, $77,724 of unamortized debt discount, from the ~~Securities~~beneficial conversion feature, was also expensed. On November 23, 2011, one (1) March Investor exercised the conversion option on a March Debenture plus accrued interest ($29,301), and ~~Exchange~~received ~~Commission~~154,218 restricted shares of the Company’s ~~shall~~Common ~~include~~Stock and the 125,000 share detachable warrant vested. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $12,434 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. Upon conversion, $5,921 of unamortized debt discount, from the beneficial conversion feature, was also expensed. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares ~~issuable~~of ~~under~~the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the March Debentures is reduced to $0.18 per share consistent with the BBWA, as defined. On January 24, 2012, the Company issued a convertible debentures ~~for~~(see ~~resale~~Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy Debenture”). Accordingly, the Conversion Price of the March Debentures is reduced to $0.178 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $29,796 and $6,026 on December 5, 2011 and January 24, 2012, respectively, in ~~such~~accordance ~~Registration~~with ~~Statement~~Codification topic 470-20. The Company has accrued interest, from inception, of $8387,~~613~~013 at ~~October~~January 31, ~~2011~~2012. As of ~~October~~January 31, ~~2011~~2012, the unamortized debt discount was $77145,~~662~~202. On ~~December~~February 51, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~533,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the ~~Vision~~March Debentures is reduced to $0.~~024~~174 per share consistent with the ~~Asher~~BBWA, ~~First~~as ~~Conversion~~defined. The additional beneficial conversion feature was calculated to be ~~zero~~$6,095 and $6,165 on ~~December~~February 51 and 17, ~~2011~~2012, respectively, in accordance with Codification topic 470-20.

Convertible Note 13 for $45,000 was issued on May 26, 2011 to Asher Enterprises, Inc. (“Asher”). The loan is evidenced by a convertible promissory note and matures 270 days from the issuance date on February 28, 2012 (the “Asher First Debenture”). The Asher First Debenture accrues interest at the rate of 8% per annum. The Company can prepay the note and accrued interest (the “Amount Due”) in full during the first 180 days by paying a) the Amount Due multiplied by b) a prepayment premium which ranges from 120% (a 20% premium during the first 60 days) to 145% (a 45% premium between 151 to 180 days). Following the 180th day (November 22, 2011) Asher can convert the note, in whole or in part, into common stock at a 40% discount to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice to convert (the “Conversion Price”); representing a beneficial conversion feature. The beneficial conversion feature was calculated to be $45,000 at the time of issuance in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The note contains a reset provision to the Conversion Price if the Company issues equity securities at a price less than the Conversion Price in effect on the day of such issuance. In addition, the note contains covenants requiring Asher’s written consent for certain activities not in existence or not committed to by the Company on the issue date, as follows: (i) dividend distributions in cash or shares; (ii) stock, warrant or option repurchases; (iii) borrowings; (iv) sale or disposal of assets; (v) certain advances and loans in excess of $100,000; and (vi) certain guarantees to third-party liabilities. In the event of default, the amount of principal and interest not paid bear interest at the rate of 22% per annum and the note becomes immediately due and payable. Should that occur, the Company is liable to pay Asher 150% of the then outstanding principal, interest and default interest. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the new Conversion Price ceiling of the Asher First Debenture is reduced to $0.10 per share consistent with the Galaxy 3rd. Loan. The additional beneficial conversion feature was calculated to be zero on August 18, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $1,519 at October 31, 2011. As of October 31, 2011 the unamortized debt discount was $20,000. On December 5, 2011, Asher exercised their option to convert $8,000 of the debenture into 333,333 non-restricted shares of the Company’s Common Stock at a Conversion Price of $0.024 based on a 40% discount applied to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice. Upon conversion, $2,667 of unamortized debt discount, from the beneficial conversion feature, was also expensed.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

10. Convertible notes (continued)

Convertible ~~Note~~Notes 1411 ~~for~~are ~~$50,000~~a ~~was~~set ~~issued~~of onthree ~~August~~(3) ~~23,~~convertible ~~2011~~debentures towith ~~Asher. The~~an ~~loan~~aggregate isface ~~evidenced~~value byof a$668,667 ~~convertible~~issued ~~promissory~~March ~~note~~12, ~~and~~2010 ~~matures~~with ~~270~~the ~~days~~same ~~from~~terms and conditions as the ~~issuance~~March ~~date~~Debentures onin ~~May~~satisfaction ~~25,~~of ~~2012~~unpaid ~~(the~~accrued ~~“Asher~~salary ~~Second~~and ~~Debenture”~~interest for (i) Mr. ~~The~~ ~~Asher~~Thomas ~~Second~~Johnson, ~~Debenture~~the ~~accrues~~Company’s ~~interest~~Chief atExecutive ~~the~~Officer ~~rate~~and Chairman of 8%the ~~per~~Board ~~annum. The~~of ~~Company~~Directors ~~can~~from ~~prepay~~February ~~the~~1, ~~note~~2009 ~~and~~through ~~accrued~~December ~~interest~~12, 2009 (~~the~~$329,510.48), ~~“Amount Due”~~(ii) inDr. ~~full~~Lee ~~during~~Johnson, the ~~first~~Company’s ~~180~~President, ~~days~~Chief byTechnology ~~paying~~Officer, Chief Financial Officer and a Director, from February 1, 2009 through December 12, 2009 ($329,510.48), and (iii) Mr. Louis P. Huynh, formerly the ~~Amount~~Company’s ~~Due~~General ~~multiplied~~Counsel, byExecutive b)Vice aPresident ~~prepayment~~of ~~premium~~Operations ~~which~~and ~~ranges~~Business ~~from~~Development, ~~120%~~Corporate (aSecretary ~~20%~~and ~~premium~~a ~~during~~Director ~~the~~from ~~first~~July 607, ~~days)~~2009 to ~~145%~~January 9, 2010 (a$9,645.97) ~~45%~~under ~~premium~~their ~~between~~respective ~~151~~employment toagreements ~~180~~with ~~days~~the Company (the “March Officer Debentures”). ~~Following~~Interest ~~the~~accrues ~~180th~~at ~~day~~Ten Percent (~~February~~10%) ~~19,~~per ~~2012)~~annum ~~Asher~~and ~~can~~is ~~convert~~due ~~the~~quarterly. The ~~note~~debentures convert, in whole or in part, at the option of each individual noteholder (the “March Officer Investors”) into ~~common~~restricted ~~stock~~shares of the Company’s Common Stock at $0.20 per share; representing a ~~40%~~beneficial ~~discount~~conversion tofeature. In addition, the ~~average~~March Officer Investor received a detachable warrant for restricted shares of the ~~three~~Company’s ~~(3)~~Common ~~lowest~~Stock; ~~closing~~the ~~bid~~number ~~prices~~of ~~during~~shares ~~the~~of ~~ten~~each ~~trading~~warrant ~~days~~is ~~prior~~equal to ~~their~~100% ~~notice~~of the number of shares issuable pursuant to ~~convert~~conversion (of the ~~“Conversion~~debenture ~~Price”);~~for ~~representing~~an aaggregate ~~beneficial~~of ~~conversion~~3,346,336 ~~feature~~restricted shares. The ~~beneficial~~detachable ~~conversion~~warrants ~~feature~~have ~~was~~an ~~calculated~~exercise toprice beof $330.30 per share,~~333~~ ata term of three years from the ~~time~~date of issuance, inand ~~accordance~~vest ~~with~~upon ~~Codification~~the ~~topic~~conversion ~~470-20;~~of the ~~Company~~debenture ~~recorded~~with ~~this~~a ~~amount~~partial asdebenture ~~debt~~conversion ~~discount~~vesting ~~with~~ a ~~corresponding~~proportional ~~credit~~number toof ~~additional~~warrant ~~paid-in capital~~shares. ~~The~~In ~~note~~the ~~contains~~event athe ~~reset~~Company ~~provision~~issues tocommon ~~the~~stock ~~Conversion~~(or ~~Price~~securities ifexercisable ~~the~~for ~~Company~~or ~~issues~~convertible ~~equity~~into ~~securities~~or exchangeable for common stock) at a price ~~less~~below ~~than~~the Conversion Price then the Conversion Price inshall ~~effect~~be onsubject ~~the~~to ~~day~~a ofBBWA ~~such~~adjustment, ~~issuance~~as defined. InThe ~~addition,~~fair ~~the~~value ~~note~~of ~~contains~~the ~~covenants~~beneficial ~~requiring~~conversion ~~Asher’s~~feature, ~~written~~calculated ~~consent~~in ~~for~~accordance ~~certain~~with ~~activities~~Codification ~~not~~topic in470-20, ~~existence~~is or$300,900; ~~not~~excluding ~~committed~~the tounvested bydetachable ~~the~~warrants. The ~~Company~~beneficial onconversion ~~the~~feature ~~issue~~is ~~date,~~recorded as ~~follows:~~debt ~~(i)~~discount ~~dividend~~with ~~distributions~~a corresponding credit to additional paid-in ~~cash~~capital orand ~~shares;~~is ~~(ii)~~amortized ~~stock,~~over ~~warrant~~the orlife ~~option~~of ~~repurchases;~~the ~~(iii)~~March ~~borrowings;~~Officer Debentures (ivthree years). On ~~sale~~April or16, ~~disposal~~2010, in a private assignment of ~~assets;~~a $50,000 March Debenture (v)see ~~certain~~Convertible ~~advances~~Notes ~~and~~10 ~~loans~~above) inan ~~excess~~aggregate of $~~100~~10,000; ~~and~~was ~~(vi)~~assigned ~~certain~~to ~~guarantees~~Ms. toTran ~~third-party~~Lee ~~liabilities~~Johnson ($5,000) and Ms. In ~~the~~Lee ~~event~~Tran ofJohnson ~~default~~($5,000), ~~the~~both ~~amount~~a ofrelated ~~principal~~party. Ms. ~~and~~Tran ~~interest~~Lee ~~not~~Johnson ~~paid~~and ~~bear~~Ms. ~~interest~~Lee atTran Johnson are the ~~rate~~daughters of ~~22%~~Dr. ~~per~~Lee ~~annum~~Johnson, ~~and~~ the ~~note~~Company’s ~~becomes~~President, ~~immediately~~Chief ~~due~~Technology Officer, Chief Financial Officer and ~~payable~~a Director. ~~Should~~The ~~that~~two ~~occur~~$5,000 ~~the~~assigned ~~Company~~March isDebentures, ~~liable~~unamortized todebt ~~pay~~discount ~~Asher~~and ~~150%~~accrued ofinterest ~~the~~have ~~then~~been ~~outstanding~~reclassified ~~principal,~~as ~~interest~~a related party obligation from Convertible Notes 10 and ~~default~~are ~~interest~~included in these convertible notes. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the ~~new~~ Conversion Price ~~ceiling~~of the March Officer Debentures is reduced to $0.19 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $35,719 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On December 5, 2011, pursuant to the terms of the Asher ~~Second~~First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.1018 per share consistent with the BBWA, as defined. On January 24, 2012, the Company issued a convertible debentures (see Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy ~~3rd~~Debenture”). Accordingly, ~~Loan~~the Conversion Price of the March Officer Debentures is reduced to $0.178 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be ~~zero~~$37,704 and $7,626 on ~~August~~December 185, 2011 and January 24, 2012, respectively, in accordance with Codification topic 470-20. The Company has accrued interest, from inception, of $~~660~~128,201 at ~~October~~January 31, ~~2011~~2012. As of ~~October~~January 31, ~~2011~~2012 the unamortized debt discount was $25182,~~926~~815. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.174 per share consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $7,712 and $7,801on February 1 and 17, 2012, respectively, in accordance with Codification topic 470-20.

11. Term debt

The Company’s historical cash requirements have been funded under a revolving credit arrangement with Hi-Tek Private (the “Hi-Tek Revolver”) which previously was a related company. Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, and Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, were the Chief Executive Officer and Chief Financial Officer of Hi-Tek Private, respectively, from October 2003 until their resignation August 8, 2007; neither held nor currently owns an equity position in Hi-Tek Private.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1110. ~~Term~~Convertible ~~debt~~notes (continued)

~~Starting~~Convertible inNotes ~~April~~12 ~~2002~~are a set of two (2) convertible debentures issued June 17, ~~Hi-Tek~~2010, ~~Private~~to ~~advanced~~one ~~funds~~(1) February Investor who agreed to ~~cover~~modify the ~~Company’s~~terms ~~operating~~of ~~costs~~their ~~and~~February ~~capital~~Debenture ~~requirements~~aggregating ~~under~~$500,000 as follows: (i) the ~~Hi-Tek~~unpaid ~~Revolver~~February ~~which~~Debenture ~~accrues~~plus accrued interest ~~monthly~~at Ten Percent (10%) per annum for the period February 1, 2009 through May 31, 2010 was cancelled in exchanged for a new $570,999.85 convertible debenture and (ii) the unpaid $45,000 in liquidated damages plus accrued interest at Ten Percent (10%) per annum ~~with~~for nothe ~~fixed~~period ~~repayment~~February ~~terms~~1, 2009 through May 31, 2010 was exchanged for a new $51,390 convertible debenture (collectively the “Vision Debentures”). ~~Hi-Tek~~Unless ~~Private~~otherwise isconverted ~~under~~into nocommon ~~obligation~~stock of the Company, the Vision Debentures shall accrue interest at a rate of 10% per annum, interest payable in full, each calendar month starting with December 2010 to ~~advance~~be ~~funds~~paid on the first of the month and monthly thereafter on the first day of each month, in arrears for the ~~future~~prior month, in cash. OnAs ~~February~~of ~~12,~~the date of this filing only the December 2010, ~~Hi-Tek~~monthly ~~Private~~interest ~~converted~~payment and a September 2, 2011, $8510,000 ofpayment have been made. All outstanding principal and accrued and unpaid interest shall become due June 17, 2013. At any time prior to or at the ~~debt~~due date all principal and accrued interest due may be converted, in whole or in part at any time and from time to time, into common stock of the inCompany at $0.25 per share (the ~~March~~“Vision ~~Debenture~~Conversion ~~offered~~Price”) byat the ~~Company~~option of the holder; representing a beneficial conversion feature. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $88,121. The beneficial conversion feature is recorded as debt discount with a ~~term~~corresponding credit to additional paid-in capital and is amortized over the life of the Vision Debentures (three years). If ~~and~~the Company, at any time while the amount of a debenture outstanding is equal to or greater than Fifty Percent (50%) of the debenture principal, shall issue securities or convertible securities, as defined, entitling the recipient to shares or the right to convert into shares of Common Stock at ~~$0.20~~a price per share less than the Vision Conversion Price (the “New Securities Price”), ~~which~~then ~~offering~~the ~~closed~~Vision onConversion ~~March~~Price, 12of the so affected Vision Debenture, ~~2010~~shall be reduced to the New Securities Price (~~see~~the ~~Note~~“New 10Vision Conversion Price”), as defined. On ~~July~~August 2518, ~~2010~~2011, ~~Hi-Tek~~the ~~Private~~Company ~~instructed~~issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the new Conversion Price of the Vision Debentures is reduced to ~~reduce~~$0.10 per share consistent with the Galaxy 3rd. Loan. The additional beneficial conversion feature was calculated to be $34,269 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt ~~owed~~discount with a corresponding credit to Hiadditional paid-~~Tek~~in ~~Private~~capital. On byDecember ~~$35~~5,~~000~~ in2011, ~~satisfaction~~the Company issued shares of the ~~June~~Company’s ~~30,~~Common ~~2010~~Stock ~~balance~~pursuant ~~owed~~to bythe ~~Business.VN~~terms ~~(see~~Convertible Note 4)13 below at $0.024 per share. OnThe ~~May~~additional 12beneficial conversion feature was calculated to be zero on December 5, 2011, Hiin accordance with Codification topic 470-~~Tek~~20. If, ~~Private~~at ~~converted~~any time, the Company proposes to file a registration statement, as defined, with the Securities and Exchange Commission the Company shall include the shares issuable under the debentures for resale in such Registration Statement. The Company has accrued interest of $~~225~~101,~~000~~426 at January 31, 2012. As of January 31, 2012 the unamortized debt ~~into~~discount was $65,645. On February 1, 2012, pursuant to the anterms ~~equity~~of ~~offering~~the byAsher First Debenture the Company ~~and~~issued ~~received 900~~533,~~000~~333 ~~restricted~~ shares of the Company’s Common Stock ~~and~~at a ~~two~~conversion ~~year~~price ~~warrant~~of ~~for~~$0.015 per share (the ~~purchase~~“Asher ofSecond 2Conversion”). On February 17,~~250~~ 2012,~~000~~ ~~restricted~~pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.25012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the Vision Debentures is reduced to $0.012 per share consistent with the Asher Third Conversion. The additional beneficial conversion feature was calculated to be zero on February 1 and 17, 2012 in accordance with Codification topic 470-20.

~~Changes~~Convertible Note 13 for $45,000 was issued on May 26, 2011 to Asher Enterprises, Inc. (“Asher”). The loan is evidenced by a convertible promissory note and matures 270 days from the issuance date on February 28, 2012 (the “Asher First Debenture”). The Asher First Debenture accrues interest at the rate of 8% per annum. The Company can prepay the note and accrued interest (the “Amount Due”) in full during the ~~carrying~~first ~~amount~~180 days by paying a) the Amount Due multiplied by b) a prepayment premium which ranges from 120% (a 20% premium during the first 60 days) to 145% (a 45% premium between 151 to 180 days). Following the 180th day (November 22, 2011) Asher can convert the note, in whole or in part, into common stock at a 40% discount to the average of the Hithree (3) lowest closing bid prices during the ten trading days prior to their notice to convert (the “Conversion Price”); representing a beneficial conversion feature. The beneficial conversion feature was calculated to be $45,000 at the time of issuance in accordance with Codification topic 470-~~Tek~~20; ~~Revolver~~the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The note contains a reset provision to the Conversion Price if the Company issues equity securities at a price less than the Conversion Price in effect on the day of such issuance. In addition, the note contains covenants requiring Asher’s written consent for certain activities not in existence or not committed to by the ~~six~~Company ~~months~~on ~~ended~~the ~~October~~issue 31date, ~~2011~~as follows: (i) dividend distributions in cash or shares; (ii) stock, warrant or option repurchases; (iii) borrowings; (iv) sale or disposal of assets; (v) certain advances and loans in excess of $100,000; and (vi) certain guarantees to third-party liabilities. In the ~~year~~event ~~ended~~of ~~April~~default, 30the amount of principal and interest not paid bear interest at the rate of 22% per annum and the note becomes immediately due and payable. Should that occur, the Company is liable to pay Asher 150% of the then outstanding principal, interest and default interest. On August 18, 2011, ~~are:~~the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the new Conversion Price ceiling of the Asher First Debenture is reduced to $0.10 per share consistent with the Galaxy 3rd. Loan. The additional beneficial conversion feature was calculated to be zero on August 18, 2011 in accordance with Codification topic 470-20. On December 5, 2011, Asher exercised their option to convert $8,000 of the debenture into 333,333 non-restricted shares of the Company’s Common Stock at a Conversion Price of $0.024 based on a 40% discount applied to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice. Upon conversion, $2,667 of unamortized debt discount, from the beneficial conversion feature, was also expensed. On January 24, 2012, the Company issued a convertible debentures (see Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy Debenture”). Accordingly, the new Conversion Price ceiling of the Asher First Debenture is reduced to $0.05 per share consistent with the Galaxy Debenture. The additional beneficial conversion feature was calculated to be zero on January 24, 2012 in accordance with Codification topic 470-20. The Company has accrued interest of $2,364 at January 31, 2012. As of January 31, 2012 the unamortized debt discount was $4,111. On February 1, 2012, Asher exercised their option to convert $8,000 of the debenture into 533,333 non-restricted shares of the Company’s Common Stock at a Conversion Price of $0.015 based on a 40% discount applied to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice. Upon conversion, $731 of unamortized debt discount, from the beneficial conversion feature, was also expensed. On February 17, 2012, Asher exercised their option to convert $10,000 of the debenture into 833,333 non-restricted shares of the Company’s Common Stock at a Conversion Price of $0.012 based on a 40% discount applied to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice. Upon conversion, $751 of unamortized debt discount, from the beneficial conversion feature, was also expensed. On March 8, 2012, Asher exercised their option to convert $12,000 of the debenture into 1,000,000 non-restricted shares of the Company’s Common Stock at a Conversion Price of $0.012 based on a 40% discount applied to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice.

	October 31,		April 30,
	2011		2011
Balance at beginning of year	$	1,012,172	$	990,792
Funds advanced		-		77,531
Repayments		274,197		155,424
Interest accrued		36,226		99,273
Balance at end of period	$	774,201	$	1,012,172

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1110. ~~Term~~Convertible ~~debt~~notes (continued)

AsConvertible Note 14 for $50,000 was issued on August 23, 2011 to Asher. The loan is evidenced by a convertible promissory note and matures 270 days from the issuance date on May 25, 2012 (the “Asher Second Debenture”). The Asher Second Debenture accrues interest at the rate of ~~October~~8% 31per annum. The Company can prepay the note and ~~April~~accrued 30interest (the “Amount Due”) in full during the first 180 days by paying a) the Amount Due multiplied by b) a prepayment premium which ranges from 120% (a 20% premium during the first 60 days) to 145% (a 45% premium between 151 to 180 days). Following the 180th day (February 19, ~~2011~~2012) ~~term~~Asher can convert the note, in whole or in part, into common stock at a 40% discount to the average of the three (3) lowest closing bid prices during the ten trading days prior to their notice to convert (the “Conversion Price”); representing a beneficial conversion feature. The beneficial conversion feature was calculated to be $33,333 at the time of issuance in accordance with Codification topic 470-20; the Company recorded this amount as debt ~~consists~~discount with a corresponding credit to additional paid-in capital. The note contains a reset provision to the Conversion Price if the Company issues equity securities at a price less than the Conversion Price in effect on the day of such issuance. In addition, the ~~following~~note contains covenants requiring Asher’s written consent for certain activities not in existence or not committed to by the Company on the issue date, as follows: (i) dividend distributions in cash or shares; (ii) stock, warrant or option repurchases; (iii) borrowings; (iv) sale or disposal of assets; (v) certain advances and loans in excess of $100,000; and (vi) certain guarantees to third-party liabilities. In the event of default, the amount of principal and interest not paid bear interest at the rate of 22% per annum and the note becomes immediately due and payable. Should that occur, the Company is liable to pay Asher 150% of the then outstanding principal, interest and default interest. On January 24, 2012, the Company issued a convertible debentures (see Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy Debenture”). Accordingly, the new Conversion Price ceiling of the Asher First Debenture is reduced to $0.05 per share consistent with the Galaxy Debenture. The additional beneficial conversion feature was calculated to be $16,667 on January 24, 2012 in accordance with Codification topic 470-20. The Company has accrued interest of $1,688 at January 31, 2012. As of January 31, 2012 the unamortized debt discount was $31,482.

	October 31,		April 30,
	2011		2011
Hi-Tek Revolver	$	774,201	$	1,012,172
Term Note 1		945,207		898,305
Term Notes 2, 3 and 4		1,070,157		1,017,056
Term Notes 11		160,163		150,294
Term Notes 12		318,863		300,382
Term Notes 14		101,500		100,500
Term Notes 16, 23 and 28		89,252		87,767
Term Notes 17, 25, 26, 29 and 31		165,388		135,089
Term Note 18		429,475		371,091
Term Note 27		23,033		21,905
Term Notes 32, 33 and 34		131,778		124,074
		4,209,017		4,218,635
Less short-term debt and current portion of long-term debt:
Hi-Tek Revolver and notes 1, 2, 3, 4, 8, 9, 10, 13, 14, 15, 20, 30 and 34		3,022,843		3,152,107
Notes 11 classified as short-term		160,163		150,294
Current portion of notes 12		97,029		99,372
		3,280,035		3,401,773
Less notes 16, 17, 18, 23, 24, 25, 26, 27, 28, 29 and 31 included in due to related parties (see Note 12)		707,148		615,852
Long-term debt, net of current portion	$	221,834	$	201,010

Term Note 1 executed by the Company on May 1, 2007 with Hi-Tek Private, a former related party, for $600,000; the short-term note was due November 1, 2007 with interest at Ten Percent (10%) per annum (the “Hi-Tek IDC Loan”). Proceeds were used to fund general operations and the initial design services for the Internet data center (“IDC”) in Vietnam. On April 30, 2008, the Hi-Tek IDC Loan was amended to extend the due date to September 1, 2008 with no other change to the terms. On September 2, 2008, the Hi-Tek IDC Loan was amended to extend the due date to June 30, 2009 with no other change to the terms. On June 25, 2009, the Hi-Tek IDC Loan was amended to extend the due date to December 31, 2009 with no other change to the terms. On December 31, 2009, the Hi-Tek IDC Loan was amended to extend the due date to March 31, 2010 with no other change to the terms. On March 30, 2010, the Hi-Tek IDC Loan was amended to extend the due date to September 30, 2010 with no other change to the terms. On September 30, 2010, the Hi-Tek IDC Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Hi-Tek IDC Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Hi-Tek IDC Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1110. ~~Term~~Convertible ~~debt~~notes (continued)

~~Term~~Convertible Note 215 ~~executed~~for by$50,000 ~~the~~was ~~Company~~issued on ~~September~~January 1424, ~~2007~~2012 ~~with~~to ~~Vina~~G.F. ~~Mex~~Galaxy ~~Capital,~~Corporation. The loan is evidenced by a ~~California~~convertible ~~limited~~debenture ~~liability~~and ~~company,~~matures ~~for~~three ~~$700,000;~~years from the ~~promissory~~ ~~note~~issuance ~~was~~date ~~due~~on ~~November~~January 1424, ~~2007. Interest~~2015 and accrues interest monthly at ~~a rate of~~ Ten Percent (10%) per annum ~~(the “Vina Mex First Loan”). Proceeds were used to fund general operations~~ and ~~the~~is ~~initial~~due ~~design~~quarterly ~~services~~in ~~for~~arrears (the ~~first~~“Galaxy ~~IDC in Vietnam~~Debenture”). OnThe ~~April~~debentures 30convert, ~~2008,~~in ~~the~~whole ~~Vina~~or ~~Mex~~in ~~First~~part, ~~Loan~~at ~~was~~the ~~amended~~election toof ~~extend~~ the ~~due~~Galaxy ~~date~~into torestricted ~~September~~shares 1,of ~~2008~~the ~~with~~Company’s noCommon ~~other~~Stock ~~change~~at ~~to the terms~~$0. On05 ~~September~~per 2,share ~~2008,~~ (the ~~Vina~~“Conversion ~~Mex~~Price”); ~~First~~representing ~~Loan~~a ~~was~~beneficial ~~amended~~conversion ~~to extend the due date to June 30, 2009 with no other change to the terms~~feature. OnIn ~~February 3~~addition, ~~2009 Vina Mex Capital assigned, without recourse,~~ the ~~Vina~~Galaxy ~~Mex~~received ~~First~~a ~~Loan~~detachable towarrant ~~IDCG~~for SArestricted deshares ~~CV,~~of athe ~~corporation~~Company’s ~~established~~Common ~~under~~Stock; the ~~laws~~number of ~~the~~shares ~~Country of Mexico~~ (~~“IDCG SA”). On June 25~~1, ~~2009~~000,000) ~~the~~is ~~Vina~~equal ~~Mex~~to ~~First~~100% ~~Loan~~of ~~was~~the ~~amended~~number toof ~~extend~~shares ~~the~~issuable ~~due~~pursuant ~~date~~ to ~~December~~conversion ~~31,~~of ~~2009 with no other change to~~ the ~~terms~~debenture. OnThe ~~December~~detachable ~~31,~~warrant ~~2009,~~has ~~the~~an ~~Vina~~exercise ~~Mex~~price ~~First~~of ~~Loan was amended to extend the due date to March 31, 2010 with no other change to the terms~~$0. On05 ~~February~~per 26share, ~~2010,~~a ~~$108,475.39~~term of ~~accrued interest was cancelled and exchanged for a convertible debenture due in~~ three years ~~offered~~from by the ~~Company,~~date ~~which~~of ~~offering closed on March 12~~issuance, ~~2010~~and ~~(see~~vest ~~Note~~upon ~~10). On March 30, 2010,~~ the ~~Vina~~conversion ~~Mex First Loan was amended to extend the due date~~ of the ~~Vina~~debenture ~~Mex~~with ~~First~~a ~~Loan~~partial todebenture ~~September~~conversion ~~30,~~vesting ~~2010~~a ~~with~~proportional nonumber ~~other~~of ~~change~~warrant ~~to the terms~~shares. OnThe ~~September~~fair ~~30,~~value ~~2010, the Vina Mex First Loan was amended to extend the due date~~ of the ~~Vina~~beneficial ~~Mex~~conversion ~~First~~feature, ~~Loan~~calculated toin ~~December~~accordance ~~31, 2010~~ with noCodification ~~other~~topic ~~change~~470-20, tois ~~the terms. On December 10~~$17,037; ~~2010,~~excluding the ~~Vina~~unvested ~~Mex~~detachable ~~First~~warrants. The ~~Loan~~beneficial ~~was~~conversion ~~amended~~feature tois ~~extend~~recorded ~~the~~as ~~due~~debt ~~date~~discount ~~of the Vina Mex First Loan to September 30, 2011~~ with noa ~~other~~corresponding ~~change~~credit to ~~the~~additional ~~terms of the note~~ paid-in ~~exchange~~capital ~~for~~and ais ~~warrant~~amortized ~~for~~over the ~~purchase~~life of ~~700,000 restricted shares of~~ the ~~Company’s~~Galaxy ~~common~~Debenture ~~stock at $0.25 valid for a term of~~ (three years ~~with an estimated fair value of $110,060 capitalized as a deferred charge associated with the loan extension~~). The ~~deferred~~Company ~~charge~~has isaccrued ~~amortized~~interest ~~on a straight-line basis over the nine month term~~ of ~~the debt extension with~~ $~~61,144~~96 ~~and~~at ~~$48,916~~January ~~expensed in the six months ended October~~ 31, ~~2011 and the year ended April 30, 2011, respectively~~2012. ~~Additionally,~~As ~~on September 29, 2011, the Vina Mex First Loan was further amended to extend the due date~~ of ~~the Vina Mex First Loan to~~ January 31, 2012 ~~with~~the nounamortized ~~other~~debt ~~change~~discount towas ~~the terms~~$17,037.

11. Term Note 3 executed by the Company on September 16, 2008 with Vina Mex Capital, for $200,000; the promissory note was due March 31, 2009. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Vina Mex Second Loan”). Proceeds were primarily used to fund the initial Dot VN Danang payment on the Land Sublease pursuant to which Dot VN Danang leases approximately 8,768 square meters of land in the Danang Industrial Zone in Danang City, Vietnam, for the express purpose of building an Internet data center and related uses, for a term of approximately 35-years. On February 3, 2009 Vina Mex Capital assigned, without recourse, the Vina Mex Second Loan to IDCG SA. On March 25, 2009, the Vina Mex Second Loan was amended to extend the due date to September 30, 2009 with no other change to the terms. On October 8, 2009, the Vina Mex Second Loan was amended to extend the due date to December 31, 2009 with no other change to the terms. On December 31, 2009, the Vina Mex Second Loan was amended to extend the due date to March 31, 2010 with no other change to the terms. On March 30, 2010, the Vina Mex Second Loan was amended to extend the due date to September 30, 2010 with no other change to the terms. On September 30, 2010, the Vina Mex Second Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. Additionally, on December 10, 2010, the Vina Mex Second Loan was further amended to extend the due date to September 30, 2011 with no other change to the terms of the note in exchange for a warrant for the purchase of 200,000 restricted shares of the Company’s common stock at $0.25 valid for a term of three years with an estimated fair value of $31,446 capitalized as a deferred charge associated with the loan extension. The deferred charge is amortized on a straight-line basis over the nine month term of the debt extension with zero and $31,446 expensed in the six months ended October 31, 2011 and the year ended April 30, 2011, respectively. On March 31, 2011, the Vina Mex Second Loan balance owed ($258,395) was cancelled in exchange for issue of 1,033,579 restricted shares of the Company’s Common Stock and a warrant exercisable into 2,583,948 restricted shares of the Company’s Common Stock. Also on March 31, 2011, the unamortized deferred charge of $20,964 was expensed.

~~Term~~The ~~Note 4 executed by the~~ Company’s onhistorical ~~October~~cash ~~17,~~requirements ~~2008~~have ~~with~~been ~~Vina~~funded ~~Mex~~under ~~Capital, for $100,000; the promissory note was due September 17, 2009. Interest accrues monthly at~~ a ~~rate~~revolving ofcredit ~~Ten~~arrangement ~~Percent~~with ~~(10%)~~Hi-Tek ~~per~~Private ~~annum~~ (the “~~Vina~~Hi-Tek ~~Mex Third Loan~~Revolver”)~~. Proceeds~~ ~~were~~which ~~used~~previously ~~to fund general operations. On February 3, 2009 Vina Mex Capital assigned, without recourse, the Vina Mex Third Loan to IDCG SA. On October 8, 2009, the Vina Mex Third Loan~~ was ~~amended~~a torelated ~~extend the due date to December 31, 2009 with no other change to the terms~~company. ~~On December 31, 2009, the Vina Mex Third Loan was amended to extend the due date to March 31, 2010 with no other change to the terms~~Dr. On ~~March~~Lee 30Johnson, ~~2010,~~ the ~~Vina~~Company’s ~~Mex Third Loan was amended to extend the due date to September 30~~President, ~~2010~~Chief ~~with~~Technology ~~no other change to the terms. On September 30~~Officer, ~~2010,~~Chief ~~the~~Financial ~~Vina~~Officer ~~Mex~~and ~~Third~~a ~~Loan was amended to extend the due date to December 31~~Director, ~~2010~~and ~~with no other change to the terms~~Mr. On ~~December~~Thomas 10Johnson, ~~2010,~~ the Vina Mex Third Loan was amended to extend the due date to September 30, 2011 with no other change to the terms of the note in exchange for a warrant for the purchase of 100,000 restricted shares of the Company’s ~~common~~Chief ~~stock~~Executive atOfficer ~~$0.25~~and ~~valid~~Chairman ~~for a term~~ of ~~three~~the ~~years~~Board ~~with an estimated fair value~~ of ~~$15~~Directors,~~723~~ ~~capitalized~~were ~~as a deferred charge associated with~~ the ~~loan~~Chief ~~extension. The~~Executive ~~deferred~~Officer ~~charge~~and isChief ~~amortized~~Financial onOfficer aof ~~straight~~Hi-~~line~~Tek ~~basis over the nine month term of the debt extension with $8~~Private,~~735~~ ~~and $6~~respectively,~~988~~ ~~expensed~~from ~~in the six months ended~~ October ~~31,~~2003 ~~2011~~until ~~and~~their ~~the~~resignation ~~year~~August ~~ended April 30~~8, ~~2011,~~2007; ~~respectively. Additionally,~~neither onheld ~~September~~nor ~~29,~~currently ~~2011,~~owns ~~the~~an ~~Vina~~equity ~~Mex~~position ~~Third~~in ~~Loan~~Hi-Tek ~~was further amended to extend the due date of the Vina Mex First Loan to January 31, 2012 with no other change to the terms~~Private.

Starting in April 2002, Hi-Tek Private advanced funds to cover the Company’s operating costs and capital requirements under the Hi-Tek Revolver which accrues interest monthly at Ten Percent (10%) per annum with no fixed repayment terms. Hi-Tek Private is under no obligation to advance funds in the future. On February 12, 2010, Hi-Tek Private converted $85,000 of the debt into the in the March Debenture offered by the Company with a term of three years and convertible at $0.20 per share, which offering closed on March 12, 2010 (see Note 10). On July 25, 2010, Hi-Tek Private instructed the Company to reduce the debt owed to Hi-Tek Private by $35,000 in satisfaction of the June 30, 2010 balance owed by Business.VN (see Note 4). On May 12, 2011, Hi-Tek Private converted $225,000 of the debt into an equity offering by the Company and received 900,000 restricted shares of the Company’s Common Stock and a two year warrant for the purchase of 2,250,000 restricted shares of the Company’s Common Stock at $0.25 per share. On February 29, 2012 the $600,000 of the Hi-Tek Revolver was converted into a $600,000 convertible debenture on terms generally consistent with the Galaxy Debenture. The convertible debenture matures three years from the issuance date on March 1, 2015 and accrues interest monthly at Ten Percent (10%) per annum and is due quarterly in arrears commencing on October 1, 2012 (the “Revolver Debenture”). The debentures convert, in whole or in part, at the election of the Hi-Tek Private into restricted shares of the Company’s Common Stock at $0.05 per share (the “Conversion Price”); representing a beneficial conversion feature. In addition, the Hi-Tek Private received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares (12,000,000) is equal to 100% of the number of shares issuable pursuant to conversion of the debenture. The detachable warrant has an exercise price of $0.05 per share, a term of three years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $125,781; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the Revolver Debenture (three years).

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

11. Term debt (continued)

OnChanges ~~January~~in ~~31 and February 9, 2007~~ the ~~Company~~carrying ~~issued~~amount ~~a set~~ of ~~convertible debentures with an aggregate face value of $949,500, net of conversions, which were due January 31, 2009 (~~the ~~“February~~Hi-Tek ~~Debentures”). On~~Revolver January 31, 2009, the February Debentures’ conversion feature expired. The Company did not repay the $949,500 due the sixteen (16) February Investors (see Note 10) and is negotiating an extension of the due date and terms with the February Investors. Thirteen (13) February Investors, aggregating $337,000, have agreed to extend the term of their February Debenture (the “Extended Notes”) (see Term Notes 11). One February Investor of $500,000 has agreed to cancel the February Debenture in exchange for ~~a three (3) year convertible debenture (see Note 10) Two (2) February Investors, aggregating $112,500, have not extended~~ the ~~due~~nine ~~date~~months ofended their February Debenture (the “Defaulted Debentures”). The Defaulted Debentures are classified as short-term debt as Term Notes 11. The February Debentures were paid interest monthly at a rate of Ten Percent (10%) per annum from July 1, 2007 to January 31, ~~2009. The~~2012 ~~Company~~and ~~offered to raise~~ the ~~interest~~year ~~rate~~ended toApril ~~Twelve Percent (12%) per annum in part for an extension of the due date; effective February 1~~30, ~~2009~~2011 ~~the Company accrues interest on the Defaulted Debentures at the proposed rate of Twelve Percent (12%) per annum.~~are:

Term Notes 12 aggregate the obligations owed the thirteen (13) February Investors that agreed to extend the term of their (i) February Debentures ($337,000) then in default and (ii) accrued, but unpaid, liquidated damages ($29,205) (the “Extended February Debt”). During March 2009, six (6) of the February Investors agreed to modify the terms of their February Debentures aggregating $125,000 as follows: (i) the February Debenture plus the unpaid liquidated damages ($10,125) are combined into an amortized term notes for each of the six (6) February Investors, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in March, and (iv) commencing April 1, 2009, the unpaid balance will be amortized over thirty-five (35) equal monthly payments. On April 13, 2009, one (1) of the February Investors agreed to modify the terms of his $49,500 February Debentures as follows: (i) the February Debenture plus the unpaid liquidated damages ($4,455) are combined into a single amortized term note, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in April for March, and (iv) commencing April 1, 2009, the unpaid balance will be amortized over thirty-five (35) equal monthly payments. During May 2009, three (3) of the February Investors agreed to modify the terms of their February Debentures aggregating $112,500 as follows: (i) the February Debenture plus the unpaid liquidated damages ($10,125) are combined into an amortized term notes for each of the three (3) February Investors, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in May, and (iv) commencing June 1, 2009, the unpaid balance will be amortized over thirty-six (36) equal monthly payments. On August 25, 2009, three (3) of the February Investors agreed to modify the terms of their February Debentures aggregating $50,000 as follows: (i) the February Debenture plus the unpaid liquidated damages ($4,500) are combined into an amortized term notes for each of the three (3) February Investors, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (iii) a one-time Fifteen Percent (15%) principal payment was paid in September, and (iv) commencing October 1, 2009, the unpaid balance will be amortized over thirty-nine (39) equal monthly payments. In addition, warrants aggregating 36,623 restricted shares were issued to the thirteen (13) February Investors, upon agreeing to modify the terms of their February Debentures, with a $2 exercise price expiring on January 31, 2012. The fair value ($10,754) of the warrants (see Note 16) was capitalized as a deferred charge associated with the issuance of these debt instruments. The deferred charge is amortized on a straight-line basis over the approximate thirty-six month term of the debt (see Note 9). The monthly amortized payments were last paid during June 2010.

	January 31,		April 30,
	2012		2011


Balance at beginning of year	$	1,012,172	$	990,792
Funds advanced		-		77,531
Repayments		278,004		155,424
Interest accrued		55,695		99,273
Balance at end of period	$	789,863	$	1,012,172

~~Term~~As ~~Note 14 executed by the Dot VN Danang on May 5, 2009 with Mr. Diep Tai~~ of ~~Vietnam~~January ~~for $101~~31,~~500;~~ ~~the~~2012 ~~promissory note is due on demand with thirty day written notice. Interest accrues~~ and isApril ~~paid~~30, in2011 ~~arrears~~term ~~monthly~~debt atconsists ~~a rate~~ of ~~Twelve Percent (12%) per annum. Proceeds were used to fund~~ the ~~second installment of the Land Sublease (see Note 4).~~following:

	January 31,		April 30,
	2012		2011

Hi-Tek Revolver	$	789,863	$	1,012,172
Term Note 1		969,569		898,305
Term Notes 2, 3 and 4		944,051		1,017,056
Term Notes 11		146,954		150,294
Term Notes 12		36,754		300,382
Term Notes 14		100,500		100,500
Term Notes 16, 23 and 28		69,396		87,767
Term Notes 17, 25, 26, 29 and 31		187,047		135,089
Term Note 18		446,620		371,091
Term Note 27		23,618		21,905
Term Notes 32, 33 and 34		135,804		124,074
		3,850,177		4,218,635
Less short-term debt and current portion of long-term debt:
Hi-Tek Revolver and notes 1, 2, 3, 4, 8, 9, 10, 13, 14, 15, 20, 30 and 34		2,939,787		3,152,107
Notes 11 classified as short-term		146,954		150,294
Current portion of notes 12		10,495		99,372
		3,097,236		3,401,773
Less notes 16, 17, 18, 23, 24, 25, 26, 27, 28, 29 and 31 included in due to related parties (see Note 12)		726,682		615,852
Long-term debt, net of current portion	$	26,259	$	201,010

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

11. Term debt (continued)

Term Note 161 executed by the Company on ~~September~~May 121, ~~2009~~2007 with ~~Mr.~~Hi-Tek ~~Thomas Johnson~~Private, ~~the~~a ~~Company’s~~former ~~Chief~~related ~~Executive Officer and Chairman of the Board of Directors~~party, for $18600,000; the ~~promissory~~short-term note was due ~~December~~November 121, ~~2009. Interest~~2007 ~~accrues~~with ~~monthly~~interest at ~~a rate of~~ Ten Percent (10%) per annum (the “~~Thomas~~Hi-Tek ~~First~~IDC Loan”). Proceeds were used to fund general operations and the initial design services for the Internet data center (“IDC”) in Vietnam. On April 30, 2008, the Hi-Tek IDC Loan was amended to extend the due date to September 1, 2008 with no other change to the terms. On ~~December~~September 32, 2008, the Hi-Tek IDC Loan was amended to extend the due date to June 30, 2009 with no other change to the terms. On June 25, 2009, the ~~Thomas~~Hi-Tek ~~First~~IDC Loan was amended to extend the due date to December 1231, 2009 with no other change to the terms. On December 31, 2009, the Hi-Tek IDC Loan was amended to extend the due date to ~~February~~March 2831, 2010 with no other change to the terms. On ~~February~~March 2530, 2010, the ~~Thomas~~Hi-Tek ~~First~~IDC Loan was amended to extend the due date to ~~May~~September 3130, 2010 with no other change to the terms. On ~~May~~September 2930, 2010, the ~~Thomas~~Hi-Tek ~~First~~IDC Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the ~~Thomas~~Hi-Tek ~~First~~IDC Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the ~~Thomas~~Hi-Tek ~~First~~IDC Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On ~~August~~February 1029, ~~2011,~~2012 the ~~Company~~Hi-Tek ~~made~~IDC Loan was cancelled and replaced with i) a ~~partial~~$600,000 ~~payment~~secured ofconvertible debenture and ii) a $1377,~~500~~379 convertible debenture on terms generally consistent with the ~~Thomas~~Galaxy ~~First~~Debenture. The ~~Loan~~$600,000 ~~applied~~secured toconvertible ~~accrued~~debenture matures three years from the issuance date on March 1, 2015 and accrues interest monthly at Ten Percent (10%) per annum and is due quarterly in arrears commencing on October 1, 2012 (the “IDC Secured Debenture”). OnThe ~~October~~debenture 24is secured by approximately 8,768 ~~2011~~square meters of land known as Lot 47, Danang Industrial Zone, Son Tra District, Danang City, Vietnam leased by the Company ~~made~~on a ~~partial~~fully ~~payment~~prepaid land lease expiring September 21, 2043. The debentures convert, in whole or in part, at the election of the Hi-Tek Private into restricted shares of the Company’s Common Stock at $10.05 per share (the “Conversion Price”); representing a beneficial conversion feature. Hi-Tek Private has agreed to stay their right to receive common stock upon conversion of their secured convertible instrument until after the Company increases the number of authorized common stock with the state of Delaware sufficient to cover all convertible instruments issued by the Company. In addition,~~500~~ onthe Hi-Tek Private received a detachable warrant for restricted shares of the ~~Thomas~~Company’s ~~First~~Common ~~Loan~~Stock; ~~applied~~the number of shares (12,000,000) is equal to ~~accrued~~100% ~~interest~~of the number of shares issuable pursuant to conversion of the debenture. OnThe ~~December~~detachable 5warrant has an exercise price of $0.05 per share, ~~2011~~a term of three years from the date of issuance, and vest upon the ~~Company~~conversion ~~made~~of the debenture with a partial ~~payment~~debenture conversion vesting a proportional number of warrant shares. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $1125,~~000~~781; onexcluding the ~~Thomas~~unvested ~~First~~detachable ~~Loan~~warrants. The ~~applied~~beneficial conversion feature is recorded as debt discount with a corresponding credit to ~~accrued~~additional paid-in capital and is amortized over the life of the IDC Secured Debenture (three years). The $377,379 convertible debenture matures three years from the issuance date on March 1, 2015 and accrues interest monthly at Ten Percent (10%) per annum and is due quarterly in arrears commencing on October 1, 2012 (the “IDC Interest Debenture”). OnThe ~~December~~debentures 9convert, ~~2011~~in whole or in part, at the election of the Hi-Tek Private into restricted shares of the Company’s ~~made~~Common Stock at $0.05 per share (the “Conversion Price”); representing a ~~payment~~beneficial conversion feature. In addition, the Hi-Tek Private received a detachable warrant for restricted shares of $1the Company’s Common Stock; the number of shares (7,~~793~~550,000) onis equal to 100% of the ~~Thomas~~number ~~First~~of ~~Loan~~shares ~~with~~issuable ~~$412~~pursuant ~~applied~~to conversion of the debenture rounded up to ~~accrued~~the ~~interest~~nearest ten thousand. The detachable warrant has an exercise price of $0.05 per share, a term of three years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $179,~~381~~141; ~~applied~~excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a ~~partial~~corresponding ~~repayment~~credit to additional paid-in capital and is amortized over the life of ~~principal~~the IDC Interest Debenture (three years).

Term Note 172 executed by the Company on September 1814, ~~2009~~2007 with ~~Ms.~~Vina ~~Ngoc~~Mex ~~Anh Ung~~Capital, ~~the~~a ~~Company’s~~California ~~Vice~~limited ~~President~~liability ~~of Operations and Business Development~~company, ~~Asia,~~ for $10700,000; the promissory note was due ~~December~~November 1814, ~~2009~~2007. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Ung~~Vina Mex First Loan”). Proceeds were used to fund general operations and the initial design services for the first IDC in Vietnam. On ~~December~~April 1530, ~~2009~~2008, the ~~Ung~~Vina Mex First Loan was amended to extend the ~~December 18, 2009~~ due date to ~~March~~September 181, ~~2010~~2008 with no other change to the terms. On ~~February~~September 122, ~~2010~~2008, the ~~Ung~~Vina Mex First Loan was amended to extend the due date to June 1830, ~~2010~~2009 with no other change to the terms. On February 3, 2009 Vina Mex Capital assigned, without recourse, the Vina Mex First Loan to IDCG SA de CV, a corporation established under the laws of the Country of Mexico (“IDCG”). On June 1025, ~~2010~~2009, the ~~Ung~~Vina Mex First Loan was amended to extend the due date to December 31, ~~2010~~2009 with no other change to the terms. On December 1331, ~~2010~~2009, the ~~Ung~~Vina Mex First Loan was amended to extend the due date to ~~September~~March 3031, ~~2011~~2010 with no other change to the terms. ~~Additionally,~~On onFebruary ~~September~~26, 292010, ~~2011~~$108,475.39 ~~the~~of ~~Ung~~accrued ~~First~~interest ~~Loan~~ was ~~further~~cancelled ~~amended~~and toexchanged ~~extend~~for ~~the~~a convertible debenture due ~~date~~in tothree ~~March~~years 31offered by the Company, ~~2012~~which ~~with~~offering noclosed ~~other~~on ~~change~~March to12, ~~the~~2010 ~~terms~~(see Note 10).

Term Note 18 executed by the Company on October 29, 2009 with Ms. Hue Tran Johnson for $10,000; the revolving credit agreement was due January 29, 2010. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Hue Revolver”). Proceeds were used to fund general operations. Ms. Johnson is the wife of Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The Company borrowed an additional $5,000, $10,000, $30,000, $15,000, $5,000, $23,000, $10,000, $20,000, $15,000, $5,000, $30,000, $10,000, $10,000, $10,000, $15,000, $500, $25,000, $10,000, $10,000, $10,000, $10,000, $20,000, $2,500, $2,200, $8,000, $19,000 and $9,000 from Ms. Johnson under the Hue Revolver on November 16, November 17, December 2, 2009, January 8, January 28, April 14, July 19, July 20, July 27, August 9, August 30, September 14, September 16, 2010, January 3, January 4, January 18, January 27, February 9, March 4, April12, April 18, June 1, August 3, September 20, September 26, September 27 and September 28, 2011, respectively. In addition, the Company borrowed additional funds advanced in Hanoi, Vietnam of 200,000,000đ (equivalent to $10,471), 700,000,000đ (equivalent to $36,083) and 400,000,000đ (equivalent to $19,512) on June 23, August 16, 2010, and April 5, 2011, respectively. On January 27, April 19, May 16, August 9 and September 22, 2011, the Company repaid $500, $10,000, $22,200, $2,500 and $2,200 on the Hue Revolver. On January 21, 2010, the Hue Revolver was amended to extend the January 29, 2010 due date to April 30, 2010 with no other change to the terms. On April 29, 2010, the Hue Revolver was further amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Hue Revolver was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Hue Revolver was further amended to extend the September 30, 2011 due date to March 31, 2012 with no other change to the terms. Additionally, the Company borrowed an additional $2,500 and $3,000 under the Hue Revolver on November 10 and November 22, 2011, respectively. Further, on November 23, 2011, the Company repaid $6,500 on the Hue Revolver.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

11. Term debt (continued)

~~Term~~On ~~Note~~March ~~23 executed by the Company on November~~ 30, ~~2009~~2010, ~~with Mr. Thomas Johnson,~~ the ~~Company’s~~Vina ~~Chief~~Mex ~~Executive~~First ~~Officer~~Loan ~~and~~was ~~Chairman~~amended ofto extend the ~~Board~~due date of ~~Directors, for $30,000;~~ the ~~promissory~~Vina ~~note~~Mex ~~was~~First ~~due~~Loan ~~February~~to 28September 30, 2010~~. Interest~~ ~~accrues~~with ~~monthly~~no atother achange ~~rate~~to ~~of Ten Percent (10%) per annum (~~the ~~“Thomas Second Loan”)~~terms. ~~Proceeds were used to fund general operations.~~ On ~~February~~September 2530, 2010, the ~~Thomas~~Vina ~~Second~~Mex First Loan was amended to extend the due date of the Vina Mex First Loan to ~~May~~December 31, 2010 with no other change to the terms. On ~~May~~December 2710, 2010, the ~~Thomas~~Vina ~~Second~~Mex First Loan was amended to extend the due date of the Vina Mex First Loan to ~~December~~September 3130, ~~2010~~2011 with no other change to the terms~~. On~~ ~~December~~of ~~13,~~the ~~2010~~note in exchange for a warrant for the purchase of 700,000 restricted shares of the ~~Thomas~~Company’s ~~Second~~common ~~Loan~~stock ~~was~~at ~~amended~~$0.25 tovalid ~~extend~~for ~~the~~a ~~due~~term ~~date~~of tothree ~~September~~years 30with an estimated fair value of $110,060 ~~2011~~capitalized ~~with~~as noa ~~other~~deferred ~~change~~charge toassociated with the ~~terms~~loan extension. ~~Additionally,~~The deferred charge is amortized on a straight-line basis over the nine month term of the debt extension with $61,144 and $48,916 expensed in the nine months ended January 31, 2012 and the year ended April 30, 2011, respectively. On September 29, 2011, the ~~Thomas~~Vina ~~Second~~Mex First Loan was further amended to extend the due date of the Vina Mex First Loan to ~~March~~January 31, 2012 with no other change to the terms. OnAdditionally, ~~November~~on 2January 30, ~~2011~~2012, the ~~Company~~Vina ~~made~~Mex aFirst ~~partial~~Loan ~~payment~~was offurther ~~$2,500~~amended ~~on the Thomas Second Loan applied~~ to ~~accrued~~extend ~~interest. On~~the ~~November~~due 4,date ~~2011,~~of the ~~Company~~Vina ~~made~~Mex aFirst ~~partial~~Loan ~~payment~~to ofApril $230,~~000~~ on2012 ~~the~~with ~~Thomas~~no ~~Second~~other ~~Loan~~change ~~applied~~ to ~~accrued~~the ~~interest~~terms. On November 174, 2011, ~~the~~IDCG ~~Company~~converted ~~made~~$150,000 aof ~~partial~~the ~~payment~~debt ofinto ~~$2,000~~an onequity offering by the ~~Thomas~~Company ~~Second~~and ~~Loan~~received ~~applied~~3,000,000 torestricted ~~accrued~~shares ~~interest~~of the Company’s Common Stock. On ~~December~~January 931, ~~2011~~2012, the Company ~~made~~owes ~~a payment of~~ $~~149~~804,565 on the ~~Thomas~~Vina ~~Second~~Mex ~~Loan~~First ~~applied to accrued interest~~Loan.

Term Note 253 executed by the Company on ~~January~~September 1916, ~~2010~~2008 with ~~Ms.~~Vina ~~Ngoc~~Mex ~~Anh Ung~~Capital, ~~the Company’s Vice President of Operations and Business Development, Asia,~~ for $24200,000; the promissory note iswas due ~~February~~March 1831, ~~2010~~2009. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Ung~~Vina Mex Second Loan”). Proceeds were primarily used to fund ~~general~~the ~~operations~~initial Dot VN Danang payment on the Land Sublease pursuant to which Dot VN Danang leases approximately 8,768 square meters of land in the Danang Industrial Zone in Danang City, Vietnam, for the express purpose of building an Internet data center and related uses, for a term of approximately 35-years. On ~~January~~February 3, 2009 Vina Mex Capital assigned, without recourse, the Vina Mex Second Loan to IDCG. On March 25, ~~2010~~2009, anthe ~~aggregate~~Vina ofMex ~~$14~~Second Loan was amended to extend the due date to September 30,~~000~~ 2009 with no other change to the terms. On October 8, 2009, the Vina Mex Second Loan was ~~repaid~~amended onto extend the ~~Ung~~due date to December 31, 2009 with no other change to the terms. On December 31, 2009, the Vina Mex Second Loan was amended to extend the due date to March 31, 2010 with no other change to the terms. On ~~February~~March 1030, 2010, anthe ~~additional~~Vina ~~$10,000~~Mex Second Loan was ~~repaid~~amended onto extend the ~~Ung~~due date to September 30, 2010 with no other change to the terms. On September 30, 2010, the Vina Mex Second Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. AtAdditionally, ~~October~~on 31December 10, 2010, the Vina Mex Second Loan was further amended to extend the due date to September 30, 2011 with no other change to the terms of the note in exchange for a warrant for the purchase of 200,000 restricted shares of the Company’s ~~owes~~common stock at $990.25 valid for a term of ~~accrued~~three ~~interest~~years with an estimated fair value of $31,446 capitalized as a deferred charge associated with the loan extension. The deferred charge is amortized on a straight-line basis over the ~~Ung~~nine month term of the debt extension with zero and $31,446 expensed in the nine months ended January 31, 2012 and the year ended April 30, 2011, respectively. On March 31, 2011, the Vina Mex Second Loan balance owed ($258,395) was cancelled in exchange for issue of 1,033,579 restricted shares of the Company’s Common Stock and a warrant exercisable into 2,583,948 restricted shares of the Company’s Common Stock. Also on March 31, 2011, the unamortized deferred charge of $20,964 was expensed.

Term Note 264 executed by the Company on ~~February~~October 1217, ~~2010~~2008 with ~~Ms.~~Vina ~~Ngoc~~Mex ~~Anh Ung~~Capital, ~~the Company’s Vice President of Operations and Business Development, Asia,~~ for $9100,000; the promissory note iswas due ~~March~~September 1217, ~~2010~~2009. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Ung~~Vina Mex Third Loan”). Proceeds were used to fund general operations. On ~~March~~February 3, ~~2010~~2009 Vina Mex Capital assigned, $9without recourse,~~000~~ the Vina Mex Third Loan to IDCG. On October 8, 2009, the Vina Mex Third Loan was ~~repaid~~amended onto extend the ~~Ung~~due date to December 31, 2009 with no other change to the terms. On December 31, 2009, the Vina Mex Third Loan was amended to extend the due date to March 31, 2010 with no other change to the terms. AtOn ~~October~~March 30, 2010, the Vina Mex Third Loan was amended to extend the due date to September 30, 2010 with no other change to the terms. On September 30, 2010, the Vina Mex Third Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 10, 2010, the Vina Mex Third Loan was amended to extend the due date to September 30, 2011 with no other change to the terms of the note in exchange for a warrant for the purchase of 100,000 restricted shares of the Company’s ~~owes~~common stock at $550.25 valid for a term of ~~accrued~~three ~~interest~~years with an estimated fair value of $15,723 capitalized as a deferred charge associated with the loan extension. The deferred charge is amortized on a straight-line basis over the ~~Ung~~nine month term of the debt extension with $8,735 and $6,988 expensed in the nine months ended January 31, 2012 and the year ended April 30, 2011, respectively. On September 29, 2011, the Vina Mex Third Loan was further amended to extend the due date of the Vina Mex First Loan to January 31, 2012 with no other change to the terms. Additionally, on January 30, 2012, the Vina Mex Third Loan was further amended to extend the due date of the Vina Mex First Loan to April 30, 2012 with no other change to the terms. On January 31, 2012, the Company owes $139,487 on the Vina Mex Third Loan.

Term Note 27 executed by the Company on August 30, 2010 with Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director, for $20,500; the promissory note was due September 30, 2010 and interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Huynh Loan”). Proceeds were used to fund general operations. On September 30, 2010, the Huynh Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Huynh Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Huynh Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms.

Term Note 28 executed by the Company on August 30, 2010 with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $30,000; the promissory note was due November 30, 2010 and interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Thomas Fourth Loan”). Proceeds were used to fund general operations. On November 10, 2010, the Thomas Fourth Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas Fourth Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Thomas Fourth Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On November 23, 2011, the Company made a partial payment of $1,500 on the Thomas Fourth Loan applied to accrued interest. On November 28, 2011, the Company made a partial payment of $1,500 on the Thomas Fourth Loan applied to accrued interest. On December 5, 2011, the Company made a partial payment of $1,000 on the Thomas Fourth Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $57 on the Thomas Fourth Loan applied to accrued interest.

Term Note 29 executed by the Company on September 17, 2010 with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $15,000; the promissory note was due December 17, 2010. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Fourth Loan”). Proceeds were used to fund general operations. On December 13, 2010, the Ung Fourth Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Ung Fourth Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1110. Term debt (continued)

~~Term~~On ~~Note~~January 3031 ~~executed~~and byFebruary 9, 2007 the Company onissued ~~October~~a 1,set ~~2010~~of convertible debentures with ~~IDCG~~an SAaggregate ~~for~~face value of $25949,~~000;~~500, net of conversions, which were due January 31, 2009 (the ~~promissory~~“February ~~note~~Debentures”). On January 31, 2009, the February Debentures’ conversion feature expired. The Company did not repay the $949,500 due the sixteen (16) February Investors (see Note 10) and is negotiating an extension of the due ondate ~~demand~~and terms with ~~written~~the ~~notice~~February ~~and~~Investors. Thirteen ~~bears~~(13) noFebruary ~~interest~~Investors, aggregating $337,000, have agreed to extend the term of their February Debenture (the “~~IDCG~~Extended ~~Fifth~~Notes”) ~~Loan~~(see Term Notes 11). One February Investor of $500,000 has agreed to cancel the February Debenture in exchange for a three (3) year convertible debenture (see Note 10) Two (2) February Investors, aggregating $112,500, have not extended the due date of their February Debenture (the “Defaulted Debentures”). ~~Proceeds~~The Defaulted Debentures are classified as short-term debt as Term Notes 11. The February Debentures were ~~used~~paid interest monthly at a rate of Ten Percent (10%) per annum from July 1, 2007 to ~~fund~~January ~~general~~31, ~~operations~~2009. The Company ~~repaid~~offered ~~$10~~to raise the interest rate to Twelve Percent (12%) per annum in part for an extension of the due date; effective February 1,~~000~~ 2009 the Company accrues interest on the Defaulted Debentures at the proposed rate of Twelve Percent (12%) per annum. On December 31, $52011,~~000,~~ the Company and ~~$10,000~~Spot-On onagreed to an exchange whereby the ~~IDCG~~Company ~~Fifth~~would ~~Loan~~surrender onthe ~~December~~Assigned 3Spot-On Debentures, or a portion thereof, for a like dollar amounted owed by the Company, as of December 1431, ~~2010~~2011, ~~and~~under the February Financing to those February Investors holding membership units of Spot-On (see Note 6). Spot-On then negotiated directly with the two February Investors holding Defaulted Debentures to acquire the obligation owed to them by the Company. Spot-On acquired one obligation totaling $19,301 which was then exchanged for a portion of an Assigned Spot-On Debentures held by the Company. As of January 2731, ~~2011~~2012, ~~respectively~~there is one February Investor holding a $100,000 Defaulted Debenture.

Term ~~Note~~Notes 3112 ~~executed~~aggregate by the ~~Company~~obligations onowed ~~November~~the 3,thirteen ~~2010~~(13) ~~with~~February ~~Ms.~~Investors ~~Ngoc~~that ~~Anh~~agreed ~~Ung,~~to extend the ~~Company’s~~term ~~Vice~~of ~~President~~their of(i) ~~Operations~~February Debentures ($337,000) then in default and ~~Business~~(ii) ~~Development~~accrued, ~~Asia~~but unpaid, ~~for~~liquidated ~~288~~damages ($29,~~008~~205) (the “Extended February Debt”). During March 2009,~~000đ~~ six (~~equivalent~~6) of the February Investors agreed to modify the terms of their February Debentures aggregating $14125,~~800~~000 as follows: (i); the ~~revolving~~February ~~credit~~Debenture ~~agreement~~plus isthe ~~due~~unpaid ~~August~~liquidated 3damages ($10,125) ~~2011. Interest~~are ~~accrues~~combined ~~monthly~~into atan aamortized ~~rate~~term notes for each of the six (6) February Investors, (ii) interest accrues from February 1, 2009 at Twelve Percent (12%) per annum, (~~the~~iii) ~~“Ung~~a ~~Revolver”). Proceeds~~one-time ~~were~~Fifteen ~~used~~Percent to(15%) ~~fund~~principal ~~general~~payment ~~operations~~was paid in ~~Vietnam. The~~March, ~~Company~~and ~~borrowed~~(iv) ancommencing ~~additional~~April ~~389~~1,~~200~~ 2009,~~000đ~~ the unpaid balance will be amortized over thirty-five (~~equivalent~~35) toequal ~~$20~~monthly payments. On April 13,~~000),~~ ~~583~~2009,~~800,000đ~~ one (~~equivalent~~1) of the February Investors agreed to modify the terms of his $3049,~~000),~~500 ~~194,800,000đ~~February Debentures as follows: (~~equivalent~~i) tothe February Debenture plus the unpaid liquidated damages ($104,~~000~~455), ~~194~~are combined into a single amortized term note,~~800,000đ~~ (~~equivalent~~ii) tointerest ~~$10~~accrues from February 1,~~000~~ 2009 at Twelve Percent (12%), ~~116~~per annum,~~940,000đ~~ (~~equivalent~~iii) toa ~~$6,000~~one-time Fifteen Percent (15%), ~~200~~principal payment was paid in April for March,~~000,000đ~~ and (~~equivalent~~iv) tocommencing ~~$10~~April 1,~~257),~~ 502009,~~000,000đ~~ ~~(equivalent~~the tounpaid ~~$2,439~~balance will be amortized over thirty-five (35), ~~100~~equal monthly payments. During May 2009,~~000,000đ~~ three (~~equivalent~~3) of the February Investors agreed to modify the terms of their February Debentures aggregating $4112,~~878),~~500 ~~50,000,000đ~~as follows: (~~equivalent~~i) tothe February Debenture plus the unpaid liquidated damages ($210,~~439~~125), ~~100,000,000đ~~are ~~(equivalent~~combined tointo ~~$4,878~~an amortized term notes for each of the three (3), ~~100~~February Investors,~~000,000đ~~ (~~equivalent~~ii) tointerest $4accrues from February 1,~~878~~ 2009 at Twelve Percent (12%), ~~200~~per annum,~~00,000đ~~ (~~equivalent~~iii) toa ~~$9,756~~one-time Fifteen Percent (15%), ~~200~~principal payment was paid in May,~~00,000đ~~ and (~~equivalent~~iv) tocommencing $9June 1,~~756),~~ ~~100~~2009,~~00,000đ~~ the unpaid balance will be amortized over thirty-six (~~equivalent~~36) toequal $4monthly payments. On August 25,~~878),~~ 732009,~~00,000đ~~ three (~~equivalent~~3) of the February Investors agreed to ~~$3,561)~~modify ~~and~~the 30terms of their February Debentures aggregating $50,000~~,000đ~~ as follows: (~~equivalent~~i) tothe February Debenture plus the unpaid liquidated damages ($14,~~422~~500) ~~from~~are ~~Ms.~~combined ~~Ung~~into ~~under~~an ~~the~~amortized ~~Ung~~term ~~Revolver~~notes onfor ~~November~~each ~~18,~~of ~~December~~the 2,three ~~and~~(3) ~~December~~February 22Investors, ~~2010,~~(ii) ~~January~~interest 7,accrues ~~January~~from 17February 1, ~~January~~2009 ~~27,~~at ~~March~~Twelve 7,Percent ~~April~~(12%) 7per annum, ~~April~~(iii) 9,a ~~April~~one-time ~~14,~~Fifteen ~~April~~Percent ~~19,~~(15%) ~~April~~principal ~~20,~~payment ~~June~~was ~~27,~~paid ~~July~~in 5September, ~~July~~and 14(iv) ~~and~~commencing October 251, ~~2011~~2009, ~~respectively~~the unpaid balance will be amortized over thirty-nine (39) equal monthly payments. In addition, ~~the~~warrants ~~Company~~aggregating ~~borrowed~~36,623 ~~additional~~restricted ~~funds~~shares ~~advanced~~were inissued ~~U.S.~~to ~~currency~~the ofthirteen ~~$10,000,~~(13) ~~$1,000,~~February $9Investors,~~000,~~ ~~$9,000,~~upon ~~$9,000~~agreeing ~~and~~to ~~$15,000~~modify onthe ~~January~~terms 4,of ~~January~~their 18February Debentures, ~~January~~with ~~26,~~a ~~May~~$2 ~~10,~~exercise ~~July~~price 15expiring ~~and~~on ~~August~~January 1631, ~~2011, respectively~~2012. AnThe ~~aggregate~~fair ofvalue ($3110,~~173~~754) ~~and~~of ~~$48,086~~the warrants (see Note 16) was ~~repaid~~capitalized onas a deferred charge associated with the ~~Ung~~issuance ~~Revolver~~of inthese ~~San~~debt ~~Diego,~~instruments. The ~~California~~deferred ~~during~~charge is amortized on a straight-line basis over the approximate thirty-six ~~months~~month ~~ended~~term ~~October~~of ~~31,~~the ~~2011~~debt ~~and~~(see ~~the~~Note ~~year~~9). The ~~ended~~monthly ~~April~~amortized ~~30,~~payments ~~2011,~~were ~~respectively~~last paid during June 2010. On ~~September~~December 2931, 2011, the ~~Ung~~Company ~~Revolver~~and ~~was~~Spot-On ~~amended~~agreed to ~~extend~~an ~~the~~exchange ~~August~~whereby 3,the ~~2011~~Company ~~due~~would ~~date~~surrender tothe ~~March~~Assigned 31Spot-On Debentures, ~~2012~~or ~~with~~a noportion ~~other~~thereof, ~~change~~for toa ~~the~~like ~~terms. Additionally,~~dollar amounted owed by the Company, ~~borrowed~~as anof ~~additional~~December $531,~~000,~~ ~~130~~2011,~~000,000đ~~ ~~(equivalent~~under the February Financing to ~~$6,100),~~those ~~$9,000~~February ~~and~~Investors ~~63,000,000đ~~holding membership units of Spot-On (~~equivalent~~see toNote ~~$3,000~~6). ~~under~~Spot-On then negotiated directly with the ~~Ung~~eleven ~~Revolver~~February onInvestors ~~November~~holding 1,Extended ~~November~~February 4,Debt ~~December~~to 14acquire ~~and~~the ~~December~~obligation ~~15,~~owed ~~2011,~~to ~~respectively~~them by the Company. ~~Further,~~ onSpot-On ~~November~~acquired ~~23,~~ten ~~December~~obligations 12with accrued interest and ~~December~~one ~~13,~~obligation ~~2011~~excluding the accrued interest totaling an aggregate of $288,845 which was then exchanged for a portion of the Assigned Spot-On Debentures held by the Company. ~~repaid~~As $5of January 31,~~000~~ 2012, there are two February Investors holding a $333,~~045~~071 Extended February Debt and ~~$3,000~~one onFebruary ~~the~~Investor ~~Ung~~owed ~~Revolver,~~interest ~~respectively~~only ($3,683).

Term Note 32 executed by the Company on November 18, 2010 with G.F. Galaxy Corporation for $100,000; the promissory note is due January 18, 2011. Interest accrued monthly at a rate of Ten Percent (10%) per month based on a 30 day month. Proceeds were used to fund general operations. On January 18, 2011, the balance owed ($120,000) on the note was cancelled in exchange for a new promissory note (Term Note 33) due July 18, 2011 (the “Galaxy 2nd. Loan”) and a warrant for the purchase of 200,000 shares of the Company’s restricted common stock. Interest on the new promissory note accrues monthly at a rate of Twelve Percent (12%) per annum. The warrant has a $0.25 exercise price and a term of two years. On July 18, 2011, the Galaxy Loan was amended to extend the due date of August 18, 2011 with no other change to the terms. On August 18, 2011, the balance owed ($128,400) on the note was cancelled in exchange for a new promissory note (Term Note 34) due July 18, 2012 (the “Galaxy 3rd. Loan”), issuance of 100,000 restricted shares on the Company’s Common Stock recorded as a $12,000 deferred debt issuance costs based on the market close of $0.12 and a warrant for the purchase of 1,300,000 shares of the Company’s restricted common stock recorded a $127,327 deferred debt issuance costs. Interest on the new promissory note accrues monthly at a rate of Twelve Percent (12%) per annum. The warrant has a $0.10 exercise price and a term of two years.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1211. ~~Due~~Term todebt ~~related parties~~(continued)

~~Due~~Term toNote ~~related~~14 ~~parties~~executed atby ~~October~~the 31Dot ~~and~~VN ~~April~~Danang 30on May 5, ~~2011~~2009 ~~consisted~~with Mr. Diep Tai of Vietnam for $101,500; the ~~following:~~promissory note is due on demand with thirty day written notice. Interest accrues and is paid in arrears monthly at a rate of Twelve Percent (12%) per annum. Proceeds were used to fund the second installment of the Land Sublease (see Note 4).

	October 31,		April 30,
	2011		2011
TJ Notes, net of zero and zero discount at October 31 and April 30, 2011	$	713,804	$	685,683
LJ Notes, net of zero and zero discount at October 31 and April 30, 2011		188,153		180,740
Huynh Note, net of zero and zero discount at October 31 and April 30, 2011		136,292		130,923
Term Notes 16, 23, and 28, Thomas Johnson		89,252		87,767
Term Notes 17, 25, 26, 29 and 31		165,388		135,089
Term Note 18, Hue Tran Johnson		429,475		371,091
Term Note 27, Louis Huynh		23,033		21,905
March Officer Debenture (Thomas Johnson), net of $83,067 and $92,263 discount at October 31 and April 30, 2011		300,429		274,622
March Officer Debenture (Lee Johnson), net of $83,067 and $92,263 discount at October 31 and April 30, 2011		300,429		274,622
March Officer Debenture (Louis Huynh), net of $2,431 and $2,701 discount at October 31 and April 30, 2011		8,795		8,040
March Officer Debenture (Tran Lee Johnson), net of $1,303 and $1,486 discount at October 31 and April 30, 2011		4,468		4,033
March Officer Debenture (Lee Tran Johnson), net of $1,304 and $1,486 discount at October 31 and April 30, 2011		4,468		4,033
Hi-Tek Trademark Loan One (Howard Johnson), net of zero discount at April 30, 2011 and 2010		201,713		201,644
		2,565,699		2,380,192
Less current portion		1,947,110		1,814,842
Due to related parties, long-term	$	618,589	$	565,350

Term Note 16 executed by the Company on September 12, 2009 with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $18,000; the promissory note was due December 12, 2009. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Thomas First Loan”). Proceeds were used to fund general operations. On December 3, 2009, the Thomas First Loan was amended to extend the December 12, 2009 due date to February 28, 2010 with no other change to the terms. On February 25, 2010, the Thomas First Loan was amended to extend the due date to May 31, 2010 with no other change to the terms. On May 29, 2010, the Thomas First Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas First Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Thomas First Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On August 10, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied to accrued interest. On October 24, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied to accrued interest. On December 5, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $1,794 on the Thomas First Loan with $413 applied to accrued interest and $1,381 applied as a partial repayment of principal. On December 14, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied as a partial repayment of principal. On December 16, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied as a partial repayment of principal. On December 21, 2011, the Company made a partial payment of $500 on the Thomas First Loan applied as a partial repayment of principal. On December 27, 2011, the Company made a payment of $500 on the Thomas First Loan with $93 applied to accrued interest and $407 applied as a partial repayment of principal. On January 22, 2012, the Company made an aggregate payment of $3,311 on the Thomas First Loan with $94 applied to accrued interest and $3,217 applied as a partial repayment of principal. On January 30, 2012, the Company made a payment of $624 on the Thomas First Loan with $22 applied to accrued interest and $602 applied as a partial repayment of principal. On January 31, 2012, the Company owes $9,396 on the Thomas First Loan. On February 22, 2012, the Company made an aggregate payment of $5,546 on the Thomas First Loan with $59 applied to accrued interest and $5,487 applied as a partial repayment of principal.

Term Note 17 executed by the Company on September 18, 2009 with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $10,000; the promissory note was due December 18, 2009. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung First Loan”). Proceeds were used to fund general operations. On December 15, 2009, the Ung First Loan was amended to extend the December 18, 2009 due date to March 18, 2010 with no other change to the terms. On February 12, 2010, the Ung First Loan was amended to extend the due date to June 18, 2010 with no other change to the terms. On June 10, 2010, the Ung First Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Ung First Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Ung First Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On January 31, 2012, the Company owes $12,664 on the Ung First Loan.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1211. ~~Due~~Term todebt ~~related parties~~ (continued)

OnTerm ~~August~~Note 1,18 ~~2007,~~executed by the Company ~~executed~~on aOctober ~~convertible~~29, ~~note~~2009 with MrMs. ~~Thomas~~Hue Tran Johnson, ~~the~~for ~~Company’s Chief Executive Officer and Chairman of the Board of Directors~~$10,000; in the ~~amount~~revolving ofcredit ~~$1,989,066~~agreement inwas ~~satisfaction~~due ~~of unpaid accrued salary, including interest, from~~ January, ~~2003 through June~~29, ~~2007 under his employment agreement with the Company (the “TJ First Note”)~~2010. ~~The~~ TJInterest ~~First~~accrues ~~Note~~monthly ~~had a term of one year and accrued interest~~ at a rate of ~~Eight~~Ten Percent (810%) per annum (~~see~~the ~~Note~~“Hue 10Revolver”). At ~~the~~Proceeds ~~election~~were ofused ~~the~~to ~~holder,~~fund ~~the~~general ~~amount~~operations. ~~due~~Ms. ~~and~~Johnson ~~owing~~is ~~pursuant~~the towife ~~such~~of ~~note~~Dr. ~~may~~Lee beJohnson, ~~converted into restricted shares of~~ the Company’s ~~Common~~President, ~~Stock~~Chief atTechnology aOfficer, ~~per~~Chief ~~share~~Financial ~~price~~Officer ofand ~~$1.43~~a ~~per share (the “Conversion Price”)~~Director. The ~~Conversion~~Company ~~Price~~borrowed ~~shall~~an beadditional ~~adjusted~~$5,000, ~~downward~~$10,000, in$30,000, ~~the~~$15,000, ~~event~~$5,000, ~~Dot~~$23,000, VN$10,000, ~~issues~~$20,000, ~~common~~$15,000, ~~stock~~$5,000, ~~(or~~$30,000, ~~securities~~$10,000, ~~exercisable~~$10,000, ~~for~~$10,000, or$15,000, ~~convertible~~$500, ~~into~~$25,000, ~~common~~$10,000, ~~stock)~~$10,000, ~~at a price below the Conversion Price~~$10,000, ~~to a price equal to such issue price. On August 14~~$10,000, ~~2008~~$20,000, ~~the Company executed a convertible promissory note for~~ $2,~~160~~500,~~766~~ ~~due February 15~~$2,200, ~~2009 plus accrued interest at Eight Percent (~~$8%),000, ~~per~~$19,000, ~~annum~~$9,000, ~~with~~$5,000, ~~Mr.~~$2,500, ~~Johnson~~$3,000, ~~(the~~$3,400, ~~“TJ~~$300, Second Note”) in exchange for the unpaid balance owed under the TJ First Note which was cancelled (see Note 10). The terms and conditions of the TJ Second Note are materially the same as the TJ First Note that expired August $1,500, ~~2008. At the election of the holder~~$2,000, ~~the~~$500 ~~amount due~~ and ~~owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at~~ $1~~.43~~,286 ~~per~~from ~~share (the “Conversion Price”)~~Ms. ~~The~~ ~~Conversion~~Johnson ~~Price~~under ~~shall be adjusted downward in~~ the ~~event~~Hue ~~Dot~~Revolver VNon ~~issues~~November ~~common~~16, ~~stock~~November ~~(or securities exercisable for or convertible into common stock) at a price (the “Subsequent Price”) below the Conversion Price~~17, toDecember ~~a price equal to such issue price. On February 15~~2, 2009, ~~the~~January TJ8, ~~Second~~January ~~Note~~28, ~~was~~April ~~amended~~14, toJuly ~~extend~~19, ~~the~~July ~~due~~20, ~~date~~July to27, ~~March~~August 179, ~~2009~~August ~~with~~30, noSeptember ~~other~~14, ~~change~~September ~~to the terms of the note or the conversion feature. On March 17~~16, ~~2009~~2010, ~~the~~January TJ3, ~~Second~~January ~~Note~~4, ~~was~~January ~~further~~18, ~~amended~~January to27, ~~extend~~February ~~the~~9, ~~due date to~~ March 314, ~~2009~~April12, ~~with~~April no18, ~~other~~June ~~change~~1, toAugust ~~the~~3, ~~terms~~September ~~of the note or the conversion feature. On April~~ 20, ~~2009~~September 26, ~~the~~September ~~Company~~27, ~~executed~~September a28, ~~convertible promissory note due~~ October 166, ~~2009~~November ~~plus~~10, ~~accrued~~November ~~interest~~22, atDecember ~~Eight~~21, ~~Percent~~December ~~(8%)~~22, ~~per~~2011, ~~annum~~January ~~(the~~4, ~~“TJ~~January ~~Third~~5, ~~Note”)~~January ~~issued (i) in exchange for the unpaid balance owed under the TJ Second Note ($2~~9,~~280,631)~~ ~~which was cancelled~~ and ~~(ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through~~ January 3112, ~~2009 under his employment agreements with the Company ($604~~2012,~~027)~~ ~~(see Note 10)~~respectively. ~~The~~In ~~terms~~addition, ~~and conditions of~~ the TJCompany ~~Third~~borrowed ~~Note~~additional ~~are~~funds ~~materially~~advanced ~~the~~in ~~same as the TJ Second Note that expired March 31~~Hanoi, ~~2009~~Vietnam ~~except that in the TJ Third Note the adjusted Conversion Price is established as One Hundred Ten Percent (110%)~~ of ~~the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price At the election of the holder~~200,000,000đ ~~the~~(equivalent ~~amount due and owing pursuant~~ to ~~such note may be converted in restricted shares of the Company’s Common Stock at a per share price of~~ $~~0.30 per share (the “Conversion Price”~~10,471)~~. The~~, ~~Conversion~~700,000,000đ ~~Price shall be adjusted downward in the event Dot VN issues common stock~~ (orequivalent ~~securities~~to ~~exercisable for or convertible into or exchangeable for common stock~~$36,083) atand a400,000,000đ ~~price~~ (~~the~~equivalent ~~“Subsequent~~to ~~Price”~~$19,512) ~~below~~on ~~the~~June ~~Conversion~~23, ~~Price~~August ~~times~~16, ~~Ninety Percent (90%)~~2010, toand aApril ~~price~~5, ~~equal~~2011, ~~to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”)~~respectively. On ~~October~~January 1227, ~~2009~~April 19, ~~the~~May TJ16, ~~Third~~August ~~Note~~9, ~~was~~September ~~amended~~22, toNovember ~~extend the due date to December 31~~23, ~~2009~~2011 ~~with~~and noJanuary ~~other change to the terms of the note or the conversion feature. On November~~ 17, ~~2009~~2012, the Company ~~agreed~~repaid to$500, ~~a 50% conversion of the outstanding balance (~~$110,~~510~~000,~~489.50)~~ at $~~0.30~~22,200, ~~per share and issued 5~~$2,~~034~~500,~~965~~ ~~restricted shares of the Company’s Common Stock and a~~ $12,~~510~~200,~~489.41~~ ~~convertible~~$6,500 ~~note~~and ~~due June 30~~$2,000 ~~2010~~on ~~plus accrued interest at Eight Percent (8%) per annum (~~the ~~“TJ~~Hue ~~Fourth Note”) (see Note 10)~~Revolver. ~~The~~On ~~terms~~January ~~and~~21, ~~conditions of the TJ Fourth Note are materially the same as the TJ Third Note~~2010, ~~except that in~~ the ~~new~~Hue ~~note~~Revolver ~~the~~was ~~amount~~amended ~~due and owing pursuant~~ to ~~such~~extend ~~note may be converted in whole or any portion thereof, into restricted shares of~~ the ~~Company’s~~January ~~Common Stock. At the election of the holder~~29, ~~the~~2010 ~~amount~~ due ~~and~~date ~~owing pursuant~~ to ~~such~~April ~~note~~30, or2010 ~~any~~with ~~portion~~no ~~thereof,~~other ~~may~~change be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to ~~a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (~~the ~~“Adjusted Conversion Price”)~~terms. ~~The Company has accrued interest of $34,833 at October 31, 2011.~~ On ~~June~~April 29, 2010, the TJHue ~~Fourth~~Revolver ~~Note~~ was further amended to extend the due date to December 31, 2010 with no other change to the terms ~~of the note or the conversion feature~~. On December 13, 2010, the TJHue ~~Fourth~~Revolver ~~Note~~ was amended to extend the due date to September 30, 2011 with no other change to the terms ~~of the notes or the conversion feature~~. Additionally, on September 29, 2011, the TJHue ~~Fourth~~Revolver ~~Note~~ was further amended to extend the September 30, 2011 due date to March 31, 2012 with no other change to the terms ~~of the notes or the conversion feature~~. ~~In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions.~~ On March 126, ~~2010~~2012, the Company ~~closed~~repaid ~~an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at~~ $~~0.20 per share (the “March Debentures”). Accordingly~~7, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $402,104 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the TJ Fourth Note. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $420,251 on ~~August 18, 2011 in accordance with Codification topic 470-20;~~ the ~~Company~~Hue ~~recorded this amount as debt discount with a corresponding credit to additional paid-in capital~~Revolver. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the TJ Fourth Note. As of October 31, 2011 the unamortized debt discount was zero. On March 16, 2011, the Company issued 4,545,455 shares of the Company’s common stock to Mr. Thomas Johnson pursuant to the terms of the TJ Fourth Note; Mr. Thomas Johnson exercised his right to convert $1,000,000, a portion of the funds owed to him under the TJ Fourth Note, into common stock of the Company at $0.22 per share. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20.

Term Note 23 executed by the Company on November 30, 2009, with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $30,000; the promissory note was due February 28, 2010. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Thomas Second Loan”). Proceeds were used to fund general operations. On February 25, 2010, the Thomas Second Loan was amended to extend the due date to May 31, 2010 with no other change to the terms. On May 27, 2010, the Thomas Second Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas Second Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Thomas Second Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On November 2, 2011, the Company made a partial payment of $2,500 on the Thomas Second Loan applied to accrued interest. On November 4, 2011, the Company made a partial payment of $2,000 on the Thomas Second Loan applied to accrued interest. On November 17, 2011, the Company made a partial payment of $2,000 on the Thomas Second Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $149 on the Thomas Second Loan applied to accrued interest. On January 30, 2012, the Company made a payment of $438 on the Thomas Second Loan applied to accrued interest. On January 31, 2012, the Company owes $30,000 on the Thomas Second Loan. On February 22, 2012, the Company made an aggregate payment of $238 on the Thomas Second Loan applied to accrued interest.

Term Note 25 executed by the Company on January 19, 2010 with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $24,000; the promissory note is due February 18, 2010. Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Second Loan”). Proceeds were used to fund general operations. On January 25, 2010, an aggregate of $14,000 was repaid on the Ung Second Loan. On February 10, 2010, an additional $10,000 was repaid on the Ung Second Loan. At January 31, 2012, the Company owes $102 of accrued interest on the Ung Second Loan.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1211. ~~Due~~Term todebt ~~related parties~~ (continued)

OnTerm ~~August~~Note 1,26 ~~2007, the Company~~ executed aby ~~convertible note with Dr. Lee Johnson,~~ the Company’s ~~President,~~on ~~Chief~~February ~~Technology Officer~~12, ~~Chief~~2010 ~~Financial Officer and a Director, in the amount of $1,989,066 in satisfaction of unpaid accrued salary, including interest, from January, 2003 through June, 2007 under his employment agreement~~ with ~~the Company (the “LJ First Note”)~~Ms. ~~The~~ LJNgoc ~~First~~Anh ~~Note had a term of one year and accrued interest at a rate of Eight Percent (8%) per annum (see Note 10). At the election of the holder~~Ung, the ~~amount due and owing pursuant to such note may be converted into restricted shares of the~~ Company’s ~~Common~~Vice ~~Stock~~President ~~at a per share price~~ of ~~$1.43~~Operations ~~per~~and ~~share~~Business (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion PriceDevelopment, ~~to a price equal to such issue price. On August 14~~Asia, ~~2008, the Company executed a convertible promissory note~~ for $29,~~160,767~~000; ~~due February 15, 2009 plus accrued interest at Eight Percent (8%) per annum with Dr. Lee Johnson (~~the ~~“LJ~~promissory Second Note”) in exchange for the unpaid balance owed under the LJ First Note which was cancelled (see Note 10). The terms and conditions of the LJ Second Note are materially the same as the LJ First Note that expired August 1, 2008. At the election of the holder, the amount due and owing pursuant to such note ~~may~~is be converted into restricted shares of the Company’s Common Stock at $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price (the “Subsequent Price”) below the Conversion Price, to a price equal to such issue price. On February 15, 2009, the LJ Second Note was amended to extend the due ~~date to~~ March 1712, ~~2009 with no other change to the terms of the note or the conversion feature~~2010. On ~~March~~Interest ~~17,~~accrues ~~2009,~~monthly the LJ Second Note was further amended to extend the due date to March 31, 2009 with no other change to the terms of the note or the conversion feature. On April 20, 2009, the Company executed a convertible promissory note due October 16, 2009 plus accrued interest at Eight Percent (8%) per annum (the “LJ Third Note”) issued (i) in exchange for the unpaid balance owed under the LJ Second Note ($2,280,631) which was cancelled and (ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through January 31, 2009 under his employment agreements with the Company ($604,027) (see Note 10). The terms and conditions of the LJ Third Note are materially the same as the LJ Second Note that expired March 31, 2009 except that in the LJ Third Note the adjusted Conversion Price is established as One Hundred Ten Percent (110%) of the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a ~~per~~rate ~~share price~~ of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (~~110~~10%) (the “Adjusted Conversion Price”). On October 12, 2009, the LJ Third Note was amended to extend the due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On November 17, 2009, the Company agreed to a 50% conversion of the outstanding balance ($1,510,489.50) at $0.30 per ~~share and issued 5,034,965 restricted shares of the Company’s Common Stock and a $1,510,489.41 convertible note due June 30, 2010 plus accrued interest at Eight Percent (8%) per~~ annum (the “LJUng ~~Fourth Note”) (see Note 10). The terms and conditions of the LJ Fourth Note are materially the same as the LJ~~ Third Note, except that in the new note the amount due and owing pursuant to such note may be converted in whole or any portion thereof, into restricted shares of the Company’s Common Stock. At the election of the holder, the amount due and owing pursuant to such note, or any portion thereof, may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion PriceLoan”). ~~The~~ ~~Conversion~~Proceeds ~~Price~~were ~~shall~~used be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to afund ~~price~~general ~~equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”)~~operations. ~~The~~ ~~Company has accrued interest of $9,182 at October 31, 2011.~~ On June 29, 2010, the LJ Fourth Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the LJ Fourth Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the notes or the conversion feature. Additionally, on September 29, 2011, the LJ Fourth Note was further amended to extend the due date to March 313, 2012 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On March 12, 2010, ~~the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at~~ $~~0.20 per share (the “March Debentures”). Accordingly~~9,000 ~~the Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature~~ was ~~calculated~~repaid ~~to be $402,104~~ on ~~March 12, 2010 in accordance with Codification topic 470-20;~~ the ~~Company~~Ung ~~recorded~~Third this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the LJ Fourth Note. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). ~~Accordingly,~~ ~~the~~At ~~Adjusted~~January Conversion Price of the LJ Fourth Note is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $111,304 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the LJ Fourth Note. As of October 31, ~~2011 the unamortized debt discount was zero. On March 16~~2012, ~~2011,~~ the Company ~~issued~~owes ~~6,818,182 shares of the Company’s common stock to Dr. Lee Johnson pursuant to the terms of the LJ Fourth Note; Dr. Lee Johnson exercised his right to convert~~ $~~1,500,000,~~57 ~~a portion~~ of ~~the~~accrued ~~funds~~interest ~~owed~~on ~~to him under~~ the LJUng ~~Fourth~~Third ~~Note, into common stock of the Company at $0~~Loan.22 per share. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20.

Term Note 30 executed by the Company on October 1, 2010 with IDCG for $25,000; the promissory note is due on demand with written notice and bears no interest (the “IDCG Fifth Loan”). Proceeds were used to fund general operations. The Company repaid $10,000, $5,000, and $10,000 on the IDCG Fifth Loan on December 3, December 14, 2010 and January 27, 2011, respectively.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1211. ~~Due~~Term todebt ~~related parties~~ (continued)

OnTerm ~~July~~Note 6,31 ~~2009,~~executed by the Company ~~executed~~on aNovember ~~convertible~~3, ~~note~~2010 with MrMs. ~~Louis~~Ngoc P.Anh ~~Huynh~~Ung, ~~formerly~~ the Company’s ~~General Counsel, Executive~~ Vice President of Operations and Business Development, ~~Corporate Secretary and a Director~~Asia, for ~~$113~~288,~~244~~008,000đ in(equivalent ~~satisfaction~~to of$14,800); ~~unpaid~~the ~~accrued~~revolving ~~salary,~~credit ~~including~~agreement ~~interest,~~is ~~from~~due August 73, ~~2007~~2011. ~~through~~Interest ~~July~~accrues 6,monthly ~~2009~~at ~~under~~a ~~Mr.~~rate ~~Huynh’s~~of ~~employment~~Twelve ~~agreement~~Percent ~~with~~(12%) ~~the~~per ~~Company~~annum (the “~~Huynh~~Ung ~~Note~~Revolver”) ~~(see Note 10)~~. ~~The~~ ~~note~~Proceeds ~~was~~were ~~due~~used ~~October~~to ~~16,~~fund ~~2009~~general ~~and~~operations ~~accrues~~in ~~interest monthly at Eight Percent (8%) per annum~~Vietnam. The Company ~~has~~borrowed ~~accrued~~an ~~interest~~additional ~~of 23~~389,~~048 at October 31~~200,000đ ~~2011. The~~(equivalent ~~beneficial conversion feature was calculated~~ to ~~be zero at the time of issuance in accordance with Codification topic 470-~~$20~~. At~~,000), ~~the~~583,800,000đ ~~election~~(equivalent ofto ~~the~~$30,000), ~~holder~~194,800,000đ ~~the~~(equivalent ~~amount~~to ~~due~~$10,000), ~~and~~194,800,000đ ~~owing~~(equivalent ~~pursuant~~ to ~~such note may be converted in restricted shares of the Company’s Common Stock at a per share price of~~ $~~0.46~~10,000), ~~per~~116,940,000đ ~~share~~ (~~the~~equivalent ~~“Conversion~~to ~~Price”~~$6,000)~~. The~~, ~~Conversion~~200,000,000đ ~~Price shall be adjusted downward in the event Dot VN issues common stock~~ (orequivalent ~~securities~~to ~~exercisable for or convertible into or exchangeable for common stock~~$10,257), at50,000,000đ ~~a price~~ (~~the~~equivalent ~~“Subsequent~~to ~~Price”~~$2,439), ~~below~~100,000,000đ ~~the~~(equivalent ~~Conversion~~to ~~Price times Ninety Percent (90%~~$4,878), to50,000,000đ a(equivalent ~~price equal~~ to ~~such~~$2,439), ~~Subsequent~~100,000,000đ ~~Price times One Hundred Ten Percent~~ (~~110%)~~equivalent ~~(the~~to ~~“Adjusted Conversion Price”~~$4,878)~~. On October 12~~, ~~2009~~100,000,000đ ~~the~~(equivalent ~~Huynh Note was amended~~ to ~~extend~~$4,878), ~~the~~200,00,000đ ~~due~~(equivalent ~~date~~ to ~~December~~$9,756), 31200,00,000đ ~~2009~~(equivalent ~~with no other change~~ to ~~the terms of the note or the conversion feature. On December 29~~$9,756), ~~2009~~100,00,000đ ~~the~~(equivalent ~~Huynh Note was amended~~ to ~~extend~~$4,878), ~~the~~73,00,000đ ~~due~~(equivalent ~~date~~ to ~~June~~$3,561), 30,000,000đ ~~2010~~(equivalent ~~with no other change~~ to ~~the terms of the note or the conversion feature. On June 29~~$1,422), ~~2010~~120,600,000đ ~~the~~(equivalent ~~Huynh Note was amended~~ to ~~extend~~$5,660), ~~the~~130,000,000đ ~~due~~(equivalent ~~date~~ to ~~December~~$6,119), 3163,000,000đ ~~2010~~(equivalent ~~with no other change~~ to ~~the~~$3,100) ~~terms~~and ~~of the note or the conversion feature. On December 13~~42, ~~2010~~000,000đ ~~the~~(equivalent ~~Huynh Note was amended~~ to ~~extend the due date to September 30~~$1,980) ~~2011~~from ~~with~~Ms. noUng ~~other~~under ~~change to~~ the ~~terms~~Ung ofRevolver ~~the~~on ~~note~~November or18, ~~the~~December ~~conversion feature. Additionally~~2, onand ~~September~~December 2922, ~~2011~~2010, ~~the~~January ~~Huynh~~7, ~~Note~~January ~~was~~17, ~~further~~January ~~amended~~27, ~~to extend the due date to~~ March 317, ~~2012~~April ~~with~~7, noApril ~~other~~9, ~~change~~April to14, ~~the~~April ~~terms~~19, ofApril ~~the~~20, ~~note~~June or27, ~~the~~July ~~conversion~~5, ~~feature. In~~July ~~accordance~~14, ~~with~~October ~~Codification~~25, ~~topic~~November ~~470-20~~1, ~~there~~November is4, noDecember ~~beneficial~~15, ~~conversion~~December ~~feature~~23, at2011 ~~the time of the five extensions~~respectively. On ~~January~~In 14addition, ~~2010,~~ the Company ~~closed~~borrowed anadditional ~~offering~~funds ofadvanced ~~convertible~~in ~~debentures~~U.S. ~~(see~~currency ~~Note~~of $10),000, ~~which~~$1,000, at$9,000, ~~the~~$9,000, ~~option of the holder converts into restricted shares of the Company’s Common Stock at~~ $~~0.30~~9,000, ~~per share (the “December Debentures”). Accordingly~~$15,000, ~~the Adjusted Conversion Price of the Huynh Loan is reduced to~~ $~~0.33~~9,000, ~~per share (December Debentures conversion price of~~ $~~0.30~~3,000 ~~times~~and ~~110%). The additional beneficial conversion feature was calculated to be~~ $405,~~732~~000 on January 144, ~~2010~~January in18, ~~accordance~~January ~~with~~26, ~~Codification~~May ~~topic~~10, ~~470-20;~~July ~~the~~15, ~~Company~~August ~~recorded~~16, ~~this~~December ~~amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30~~14, 2011), ofJanuary ~~the~~4 ~~Huynh~~and ~~Note. On~~January ~~March~~ 12, ~~2010~~2012, ~~the~~respectively. ~~Company~~An ~~closed~~aggregate ~~an offering~~ of ~~convertible debentures (see Note 10) which at the option of the holder converts into restricted shares of the Company’s Common Stock at~~ $~~0.20 per share (the “March Debentures”). Accordingly~~48,677 ~~the~~and ~~Conversion Price of the Huynh Loan is reduced to~~ $~~0.22~~48,086 ~~per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature~~ was ~~calculated~~repaid ~~to be $56,622~~ on ~~March~~the ~~12,~~Ung ~~2010~~Revolver in ~~accordance~~San ~~with~~Diego, ~~Codification~~California ~~topic~~during ~~470-20;~~ the ~~Company~~nine ~~recorded~~months ~~this~~ended ~~amount~~January as31, ~~debt~~2012 ~~discount~~and ~~with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over~~ the ~~remaining~~year ~~term~~ended ~~(June~~April 30, 2011), ~~of the Huynh Note~~respectively. On ~~August~~September 1829, 2011, the ~~Company~~Ung ~~issued~~Revolver awas ~~promissory~~amended ~~note~~to ~~(see~~extend ~~Term~~the ~~Note~~August ~~34)~~3, ~~which~~2011 ~~included~~due adate ~~warrant~~to ~~for~~March 131,~~300,000~~ ~~restricted~~2012 ~~shares~~with ofno ~~the~~other ~~Company’s~~change ~~Common~~to ~~Stock exercisable at $0.10 per share (~~the ~~“Galaxy 3rd~~terms. ~~Loan”).~~ ~~Accordingly,~~On ~~the~~January ~~Adjusted~~31, ~~Conversion~~2012, ~~Price of~~ the ~~Huynh~~Company ~~Loan~~owes ~~is reduced to~~ $~~0.11~~157,027 ~~per~~on ~~share (~~the ~~Galaxy~~Ung ~~3rd~~Revolver. ~~Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature.~~ ~~The additional beneficial conversion feature was calculated to be $15~~Additionally,~~890~~ ~~on August 18, 2011 in accordance with Codification topic 470-20;~~ the Company ~~recorded~~borrowed ~~this~~an ~~amount as debt discount with a corresponding credit to~~ additional ~~paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30~~$5,000 ~~2011)~~under of the ~~Huynh~~Ung ~~Note. As~~Revolver ofon ~~October~~February 3122, ~~2011 the unamortized debt discount was zero~~2012. ~~On December 5~~Further, ~~2011,~~on ~~pursuant~~February to13 ~~the~~and ~~terms~~March of6, ~~the Asher First Debenture the Company issued 333~~2012,~~333~~ ~~shares of~~ the Company’s ~~Common~~repaid ~~Stock at a conversion price of~~ $~~0.024 per share (the “Asher First Conversion”). Accordingly~~1,077 ~~the~~and ~~Adjusted Conversion Price of the Huynh Loan is reduced to~~ $~~0.0264~~8,000 ~~per~~on ~~share (~~the ~~Asher~~Ung ~~First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5~~Revolver, ~~2011 in accordance with Codification topic 470-20~~respectively.

Term Note 32 executed by the Company on November 18, 2010 with G.F. Galaxy Corporation for $100,000; the promissory note is due January 18, 2011. Interest accrued monthly at a rate of Ten Percent (10%) per month based on a 30 day month (the “Galaxy 1st. Loan”). Proceeds were used to fund general operations. On January 18, 2011, the balance owed ($120,000) on the note was cancelled in exchange for a new promissory note (Term Note 33) due July 18, 2011 (the “Galaxy 2nd. Loan”) and a warrant for the purchase of 200,000 shares of the Company’s restricted common stock. Interest on the new promissory note accrues monthly at a rate of Twelve Percent (12%) per annum. The warrant has a $0.25 exercise price and a term of two years. On July 18, 2011, the Galaxy Loan was amended to extend the due date of August 18, 2011 with no other change to the terms. On August 18, 2011, the balance owed ($128,400) on the note was cancelled in exchange for a new promissory note (Term Note 34) due July 18, 2012 (the “Galaxy 3rd. Loan”), issuance of 100,000 restricted shares on the Company’s Common Stock recorded as a $12,000 deferred debt issuance costs based on the market close of $0.12 and a warrant for the purchase of 1,300,000 shares of the Company’s restricted common stock recorded a $127,327 deferred debt issuance costs. Interest on the new promissory note accrues monthly at a rate of Twelve Percent (12%) per annum. The warrant has a $0.10 exercise price and a term of two years.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

12. Due to related parties ~~(continued)~~

OnDue ~~September~~to ~~12,~~related ~~2009,~~parties the Company executed a note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $18,000; the promissory note was due December 12, 2009 (see Note 11). Interest accrues monthly at aJanuary rate of Ten Percent (10%) per annum (the “Thomas First Loan”). Proceeds were used to fund general operations. On December 3, 2009, the Thomas First Loan was amended to extend the December 12, 2009 due date to February 28, 2010 with no other change to the terms. On February 25, 2010, the Thomas First Loan was amended to extend the due date to May 31, ~~2010~~2012 ~~with~~and noApril other change to the terms. On May 29, 2010, the Thomas First Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas First Loan was amended to extend the due date to September 30, 2011 ~~with~~consisted no other change to the terms. Additionally, on September 29, 2011, the Thomas First Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On August 10, 2011, the Company made a partial payment of ~~$1,500 on~~ the Thomas First Loan applied to accrued interest. On October 24, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied to accrued interest. On December 5, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $1,793 on the Thomas First Loan with $412 applied to accrued interest and $1,381 applied as a partial repayment of principal.following:

On September 18, 2009, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $10,000; the promissory note was due December 18, 2009 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung First Loan”). Proceeds were used to fund general operations. On December 15, 2009, the Ung First Loan was amended to extend the December 18, 2009 due date to March 18, 2010 with no other change to the terms. On February 12, 2010, the Ung First Loan was amended to extend the due date to June 18, 2010 with no other change to the terms. On June 10, 2010, the Ung First Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Ung First Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Ung First Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms.

	January 31,		April 30,
	2012		2011

TJ Notes, net of zero and zero discount at January 31, 2012 and April 30, 2011	$	728,295	$	685,683
LJ Notes, net of zero and zero discount at January 31, 2012 and April 30, 2011		191,972		180,740
Huynh Note, net of zero and zero discount at January 31, 2012 and April 30, 2011		139,059		130,923
Term Notes 16, 23, and 28, Thomas Johnson		69,396		87,767
Term Notes 17, 25, 26, 29 and 31		187,047		135,089
Term Note 18, Hue Tran Johnson		446,621		371,091
Term Note 27, Louis Huynh		23,618		21,905
March Officer Debenture (Thomas Johnson), net of $88,760 and $92,263 discount at January 31, 2012 and April 30, 2011		303,041		274,622
March Officer Debenture (Lee Johnson), net of $88,760 and $92,263 discount at January 31, 2012 and April 30, 2011		303,041		274,622
March Officer Debenture (Louis Huynh), net of $2,599 and $2,701 discount at January 31, 2012 and April 30, 2011		8,872		8,040
March Officer Debenture (Tran Lee Johnson), net of $1,348 and $1,486 discount at January 31, 2012 and April 30, 2011		4,549		4,033
March Officer Debenture (Lee Tran Johnson), net of $1,348 and $1,486 discount at January 31, 2012 and April 30, 2011		4,550		4,033
Hi-Tek Trademark Loan One (Howard Johnson), net of zero discount at January 31, 2012 and April 30, 2011		201,713		201,644
		2,611,774		2,380,192
Less current portion		1,987,721		1,814,842
Due to related parties, long-term	$	624,053	$	565,350

On October 29, 2009, the Company executed a promissory note with Ms. Hue Tran Johnson for $10,000; the revolving credit agreement was due January 29, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Hue Revolver”). Proceeds were used to fund general operations. Ms. Johnson is the wife of Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The Company borrowed an additional $5,000, $10,000, $30,000, $15,000, $5,000, $23,000, $10,000, $20,000, $15,000, $5,000, $30,000, $10,000, $10,000, $10,000, $15,000, $500, $25,000, $10,000, $10,000, $10,000, $10,000, $20,000, $2,500, $2,200, $8,000, $19,000 and $9,000 from Ms. Johnson under the Hue Revolver on November 16, November 17, December 2, 2009, January 8, January 28, April 14, July 19, July 20, July 27, August 9, August 30, September 14, September 16, 2010, January 3, January 4, January 18, January 27, February 9, March 4, April12, April 18, June 1, August 3, September 20, September 26, September 27 and September 28, 2011, respectively. In addition, the Company borrowed additional funds advanced in Hanoi, Vietnam of 200,000,000đ (equivalent to $10,471), 700,000,000đ (equivalent to $36,083) and 400,000,000đ (equivalent to $19,512) on June 23, August 16, 2010, and April 5, 2011, respectively. On January 27, April 19, May 16, August 9 and September 22, 2011, the Company repaid $500, $10,000, $22,200, $2,500 and $2,200 on the Hue Revolver. On January 21, 2010, the Hue Revolver was amended to extend the January 29, 2010 due date to April 30, 2010 with no other change to the terms. On April 29, 2010, the Hue Revolver was further amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Hue Revolver was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Hue Revolver was further amended to extend the September 30, 2011 due date to March 31, 2012 with no other change to the terms. Additionally, the Company borrowed an additional $2,500 and $3,000 under the Hue Revolver on November 10 and November 22, 2011, respectively. Further, on November 23, 2011, the Company repaid $6,500 on the Hue Revolver.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

12. Due to related parties (continued)

On ~~November~~August 301, ~~2009~~2007, the Company executed a convertible note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, ~~for~~in the amount of $301,~~000;~~989,066 in satisfaction of unpaid accrued salary, including interest, from January, 2003 through June, 2007 under his employment agreement with the Company (the “TJ First Note”). The TJ First Note had a term of one year and accrued interest at a rate of Eight Percent (8%) per annum (see Note 10). At the election of the holder, the amount due and owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at a per share price of $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion Price, to a price equal to such issue price. On August 14, 2008, the Company executed a convertible promissory note ~~was~~for $2,160,766 due February 2815, ~~2010~~2009 plus accrued interest at Eight Percent (8%) per annum with Mr. Johnson (the “TJ Second Note”) in exchange for the unpaid balance owed under the TJ First Note which was cancelled (see Note 1110). ~~Interest~~The ~~accrues~~terms ~~monthly~~and conditions of the TJ Second Note are materially the same as the TJ First Note that expired August 1, 2008. At the election of the holder, the amount due and owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a ~~rate~~price (the “Subsequent Price”) below the Conversion Price, to a price equal to such issue price. On February 15, 2009, the TJ Second Note was amended to extend the due date to March 17, 2009 with no other change to the terms of ~~Ten~~the note or the conversion feature. On March 17, 2009, the TJ Second Note was further amended to extend the due date to March 31, 2009 with no other change to the terms of the note or the conversion feature. On April 20, 2009, the Company executed a convertible promissory note due October 16, 2009 plus accrued interest at Eight Percent (108%) per annum (the “~~Thomas~~TJ Third Note”) issued (i) in exchange for the unpaid balance owed under the TJ Second ~~Loan~~Note ($2,280,631) which was cancelled and (ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through January 31, 2009 under his employment agreements with the Company ($604,027) (see Note 10). The terms and conditions of the TJ Third Note are materially the same as the TJ Second Note that expired March 31, 2009 except that in the TJ Third Note the adjusted Conversion Price is established as One Hundred Ten Percent (110%) of the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). ~~Proceeds~~The ~~were~~Conversion ~~used~~Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to ~~fund~~a ~~general~~price ~~operations~~equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On ~~February~~October 2512, ~~2010~~2009, the ~~Thomas~~TJ ~~Second~~Third ~~Loan~~Note was amended to extend the due date to ~~May~~December 31, ~~2010~~2009 with no other change to the terms of the note or the conversion feature. On ~~May~~November 17, 2009, the Company agreed to a 50% conversion of the outstanding balance ($1,510,489.50) at $0.30 per share and issued 5,034,965 restricted shares of the Company’s Common Stock and a $1,510,489.41 convertible note due June 30, 2010 plus accrued interest at Eight Percent (8%) per annum (the “TJ Fourth Note”) (see Note 10). The terms and conditions of the TJ Fourth Note are materially the same as the TJ Third Note, except that in the new note the amount due and owing pursuant to such note may be converted in whole or any portion thereof, into restricted shares of the Company’s Common Stock. At the election of the holder, the amount due and owing pursuant to such note, or any portion thereof, may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On June 29, 2010, the ~~Thomas~~TJ ~~Second~~Fourth ~~Loan~~Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the ~~Thomas~~TJ ~~Second~~Fourth ~~Loan~~Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the notes or the conversion feature. Additionally, on September 29, 2011, the ~~Thomas~~TJ ~~Second~~Fourth ~~Loan~~Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On ~~November~~March 212, ~~2011~~2010, the Company ~~made~~closed aan ~~partial~~offering ~~payment~~of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $20.20 per share (the “March Debentures”). Accordingly,~~500~~ the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $402,104 on March 12, 2010 in accordance with Codification topic 470-20; the ~~Thomas~~Company ~~Second~~recorded ~~Loan~~this ~~applied~~amount as debt discount with a corresponding credit to ~~accrued~~additional ~~interest~~paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the TJ Fourth Note. On ~~November~~March 416, 2011, the Company ~~made~~issued 4,545,455 shares of the Company’s common stock to Mr. Thomas Johnson pursuant to the terms of the TJ Fourth Note; Mr. Thomas Johnson exercised his right to convert $1,000,000, a ~~partial~~portion ~~payment~~of the funds owed to him under the TJ Fourth Note, into common stock of the Company at $20.22 per share. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 onrestricted shares of the ~~Thomas~~Company’s ~~Second~~Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, ~~applied~~the Adjusted Conversion Price of the TJ Fourth Note is reduced to ~~accrued~~$0.11 ~~interest~~per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $420,251 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the TJ Fourth Note. On ~~November~~December 175, 2011, pursuant to the terms of the Asher First Debenture the Company ~~made~~issued 333,333 shares of the Company’s Common Stock at a ~~partial~~conversion ~~payment~~price of $20.024 per share (the “Asher First Conversion”). Accordingly,~~000~~ onthe Adjusted Conversion Price of the ~~Thomas~~TJ ~~Second~~Fourth ~~Loan~~Note ~~applied~~is reduced to $0.027 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $49,323 at January 31, 2012. As of January 31, 2012 the unamortized debt discount was zero. On ~~December~~February 91, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company ~~made~~issued 533,333 shares of the Company’s Common Stock at a ~~payment~~conversion price of $~~149~~0.024 onper share (the ~~Thomas~~“Asher Second ~~Loan~~Conversion”). ~~applied~~On February 17, 2012, pursuant to ~~accrued~~the ~~interest~~terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.014 per share (the Asher Third Conversion price of $0.012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on February 1 and 17 and March 8, 2012 in accordance with Codification topic 470-20.

On January 19, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $24,000; the promissory note is due February 18, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Second Loan”). Proceeds were used to fund general operations. On January 25, 2010, an aggregate of $14,000 was repaid on the Ung Second Loan. On February 10, 2010, an additional $10,000 was repaid on the Ung Second Loan. At October 31, 2011, the Company owes $99 of accrued interest on the Ung Second Loan.

On February 12, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $9,000; the promissory note is due March 12, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Third Loan”). Proceeds were used to fund general operations. On March 3, 2010, $9,000 was repaid on the Ung Third Loan. At October 31, 2011, the Company owes $55 of accrued interest on the Ung Third Loan.

On March 12, 2010, the Company converted an aggregate of $668,667 of unpaid salaries and accrued interest owed to its three officers into convertible debentures due in three years offered by the Company, which offering closed on March 12, 2010 (see Note 10). The set of three (3) convertible debentures, with the same terms and conditions as the March Debentures, were issued in satisfaction of unpaid accrued salary and interest for (i) Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors from February 1, 2009 through December 12, 2009 ($329,510.48), (ii) Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, from February 1, 2009 through December 12, 2009 ($329,510.48), and (iii) Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director from July 8, 2009 to January 9, 2010 ($9,645.97) under their respective employment agreements with the Company (the “March Officer Debentures”). The convertible debentures have a three year term and are due March 12, 2013. Interest accrues at Ten Percent (10%) per annum and is due quarterly. The debentures convert, in whole or in part, at the option of each individual noteholder (the “March Officer Investors”) into restricted shares of the Company’s Common Stock at $0.20 per share; representing a beneficial conversion feature. In addition, the March Officer Investor received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 100% of the number of shares issuable pursuant to conversion of the debenture for an aggregate of 3,346,336 restricted shares. The detachable warrants have an exercise price of $0.30 per share, a term of three years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. In the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price below the Conversion Price then the Conversion Price shall be subject to a BBWA adjustment, as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $300,900; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the March Officer Debentures (three years). On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.19 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $35,193 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The Company has accrued interest, from inception, of $109,551 at October 31, 2011. As of October 31, 2011 the unamortized debt discount was $168,566. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the March Debentures is reduced to $0.18 per share consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $37,148 on December 5, 2011 in accordance with Codification topic 470-20.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

12. Due to related parties (continued)

On ~~April~~August 161, ~~2010~~2007, inthe Company executed a ~~private~~convertible ~~assignment~~note ofwith Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, in the amount of $501,~~000~~989,066 ~~March~~in ~~Debenture~~satisfaction of unpaid accrued salary, including interest, from January, 2003 through June, 2007 under his employment agreement with the Company (~~see~~the ~~Convertible~~“LJ ~~Notes~~First 10Note”). The anLJ ~~aggregate~~First Note had a term of $one year and accrued interest at a rate of Eight Percent (8%) per annum (see Note 10). At the election of the holder,~~000~~ ~~was~~the ~~assigned~~amount due and owing pursuant to Mssuch note may be converted into restricted shares of the Company’s Common Stock at a per share price of $1.43 ~~Tran~~per ~~Lee~~share ~~Johnson~~(the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion Price, to a price equal to such issue price. On August 14, 2008, the Company executed a convertible promissory note for $52,~~000~~160,767 due February 15, 2009 plus accrued interest at Eight Percent (8%) ~~and~~per Msannum with Dr. Lee ~~Tran~~ Johnson (~~$5,000~~the “LJ Second Note”), ~~both~~in aexchange ~~related~~for ~~party~~the unpaid balance owed under the LJ First Note which was cancelled (see Note 1210). MsThe terms and conditions of the LJ Second Note are materially the same as the LJ First Note that expired August 1, 2008. At ~~Tran~~the ~~Lee~~election ~~Johnson~~of the holder, the amount due and Msowing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at $1.43 ~~Lee~~per ~~Tran~~share ~~Johnson~~(the ~~are~~“Conversion Price”). The Conversion Price shall be adjusted downward in the ~~daughters~~event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price (the “Subsequent Price”) below the Conversion Price, to a price equal to such issue price. On February 15, 2009, the LJ Second Note was amended to extend the due date to March 17, 2009 with no other change to the terms of Drthe note or the conversion feature. On ~~Lee~~March ~~Johnson~~17, 2009, the LJ Second Note was further amended to extend the due date to March 31, 2009 with no other change to the terms of the note or the conversion feature. On April 20, 2009, the Company’s ~~President~~executed a convertible promissory note due October 16, ~~Chief~~2009 ~~Technology~~plus ~~Officer~~accrued interest at Eight Percent (8%) per annum (the “LJ Third Note”) issued (i) in exchange for the unpaid balance owed under the LJ Second Note ($2,280,631) ~~Chief~~which ~~Financial~~was ~~Officer~~cancelled and (ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through January 31, 2009 under his employment agreements with the Company ($604,027) (see Note 10). The terms and conditions of the LJ Third Note are materially the same as the LJ Second Note that expired March 31, 2009 except that in the LJ Third Note the adjusted Conversion Price is established as One Hundred Ten Percent (110%) of the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a ~~Director~~per share price of $0.30 per share (the “Conversion Price”). The ~~two~~Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On October 12, 2009, the LJ Third Note was amended to extend the due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On November 17, 2009, the Company agreed to a 50% conversion of the outstanding balance ($51,~~000~~510,489.50) ~~assigned~~at ~~March~~$0.30 ~~Debentures~~per share and issued 5,034,965 ~~unamortized~~restricted ~~debt~~shares ~~discount~~of the Company’s Common Stock and a $1,510,489.41 convertible note due June 30, 2010 plus accrued interest ~~have~~at ~~been~~Eight ~~reclassified~~Percent as(8%) aper ~~related~~annum ~~party~~(the ~~obligation~~“LJ ~~from~~Fourth ~~Convertible~~Note”) ~~Notes~~(see Note 10). The terms and conditions of the LJ Fourth Note are ~~included~~materially the same as the LJ Third Note, except that in the new note the amount due and owing pursuant to such note may be converted in whole or any portion thereof, into restricted shares of the Company’s Common Stock. At the election of the holder, the amount due and owing pursuant to such note, or any portion thereof, may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On June 29, 2010, the LJ Fourth Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the LJ Fourth Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the notes or the conversion feature. Additionally, on September 29, 2011, the LJ Fourth Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March ~~Officer~~ Debentures”). Accordingly, the Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $402,104 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the LJ Fourth Note. On March 16, 2011, the Company issued 6,818,182 shares of the Company’s common stock to Dr. Lee Johnson pursuant to the terms of the LJ Fourth Note; Dr. Lee Johnson exercised his right to convert $1,500,000, a portion of the funds owed to him under the LJ Fourth Note, into common stock of the Company at $0.22 per share. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the ~~March~~LJ ~~Officer~~Fourth ~~Debentures~~Note is reduced to $0.1911 per share, ~~consistent~~(the ~~with~~Galaxy ~~the~~3rd. ~~BBWA,~~Loan aswarrant ~~defined~~price of $0. 10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $~~526~~111,304 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the LJ Fourth Note. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company ~~has~~issued ~~accrued~~333,333 ~~interest~~shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, ~~from~~the ~~inception~~Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.027 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $113,~~543~~001 at ~~October~~January 31, ~~2011~~2012. As of ~~October~~January 31, ~~2011~~2012 the unamortized debt discount was ~~$2,606~~zero. On ~~December~~February 51, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~533,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Adjusted Conversion Price of the ~~March~~LJ ~~Debentures~~Fourth Note is reduced to $0.18014 per share ~~consistent~~(the ~~with~~Asher ~~the~~Third ~~BBWA,~~Conversion asprice ~~defined~~of $0. 012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be ~~$556~~zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

On May 19, 2010, the Hi-Tek Trademark Loan was amended to extend the due date to December 31, 2010 and split the note in two separate convertible notes (see Note 10). The first note for $200,000 includes a new provision for the monthly payment of interest effective July 1, 2010 in arrears, there were no other change to the terms of the original note or the conversion feature (“Hi-Tek Trademark Loan One”). The second note for $314,968 did not change the interest accrual or payment terms; there were no other change to the terms of the original note or the conversion feature (“Hi-Tek Trademark Loan Two”). Also on May 19, 2010, Hi-Tek Private assigned the Hi-Tek Trademark Loan One to Mr. Howard Johnson, a related party. Mr. Johnson is the father of Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors and Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. On December 28, 2010, the Hi-Tek Trademark Loan One was amended to extend the due date to June 30, 2011, with no other change to the terms of the note or the conversion feature. Additionally, on June 29, 2011, the Hi-Tek Trademark Loan One was further amended to extend the due date to December 31, 2011, with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the extensions. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.10 per share consistent with the Galaxy 3rd. Loan. The additional beneficial conversion feature was calculated to be zero on August 18, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $1,713 and unamortized debt discount of zero on the Hi-Tek Trademark Loan One, held by Mr. Howard Johnson, as of October 31, 2011. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.024 per share consistent with the Asher First Conversion. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

12. Due to related parties (continued)

On ~~August~~July 306, ~~2010~~2009, the Company executed a convertible note with Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director, for $20113,~~500;~~244 ~~the~~in ~~promissory~~satisfaction ~~note~~of ~~was~~unpaid ~~due~~accrued ~~September~~salary, 30including interest, ~~2010~~from August 7, 2007 through July 6, 2009 under Mr. Huynh’s employment agreement with the Company (the “Huynh Note”) (see Note 1110). ~~Interest~~The note was due October 16, 2009 and accrues interest monthly at Eight Percent (8%) per annum. The beneficial conversion feature was calculated to be zero at the time of issuance in accordance with Codification topic 470-20. At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a ~~rate~~per share price of ~~Ten~~$0.46 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (1090%), ~~per~~to ~~annum~~a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “~~Huynh~~Adjusted ~~Loan~~Conversion Price”). ~~Proceeds~~On ~~were~~October ~~used~~12, 2009, the Huynh Note was amended to ~~fund~~extend ~~general~~the ~~operations~~due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On ~~September~~December 29, 2009, the Huynh Note was amended to extend the due date to June 30, 2010 with no other change to the terms of the note or the conversion feature. On June 29, 2010, the Huynh ~~Loan~~Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the Huynh ~~Loan~~Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the note or the conversion feature. Additionally, on September 29, 2011, the Huynh ~~Loan~~Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the five extensions. On January 14, 2010, the Company closed an offering of convertible debentures (see Note 10) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.30 per share (the “December Debentures”). Accordingly, the Adjusted Conversion Price of the Huynh Note is reduced to $0.33 per share (December Debentures conversion price of $0.30 times 110%). The additional beneficial conversion feature was calculated to be $40,732 on January 14, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the Huynh Note. On March 12, 2010, the Company closed an offering of convertible debentures (see Note 10) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Conversion Price of the Huynh Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $56,622 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the Huynh Note. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the Huynh Note is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $15,890 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the Huynh Note. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh Note is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of 25,815 at January 31, 2012. As of January 31, 2012 the unamortized debt discount was zero. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh Note is reduced to $0.014 per share (the Asher Third Conversion price of $0.012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on February 1 and 17 and March 8, 2012 in accordance with Codification topic 470-20.

On August 30, 2010, the Company executed a note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $30,000; the promissory note was due November 30, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Thomas Fourth Loan”). Proceeds were used to fund general operations. On November 10, 2010, the Thomas Fourth Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas Fourth Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Thomas Fourth Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On November 23, 2011, the Company made a partial payment of $1,500 on the Thomas Fourth Loan applied to accrued interest. On November 28, 2011, the Company made a partial payment of $1,500 on the Thomas Fourth Loan applied to accrued interest. On December 5, 2011, the Company made a partial payment of $1,000 on the Thomas Fourth Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $57 on the Thomas Fourth Loan applied to accrued interest.

On September 17, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $15,000; the promissory note was due December 17, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Fourth Loan”). Proceeds were used to fund general operations. On December 13, 2010, the Ung Fourth Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Ung Fourth Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms.

On November 3, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for 288,008,000đ (equivalent to $14,800); the revolving credit agreement is due August 3, 2011 (see Note 11). Interest accrues monthly at a rate of Twelve Percent (12%) per annum (the “Ung Revolver”). Proceeds were used to fund general operations in Vietnam. The Company borrowed an additional 389,200,000đ (equivalent to $20,000), 583,800,000đ (equivalent to $30,000), 194,800,000đ (equivalent to $10,000), 194,800,000đ (equivalent to $10,000), 116,940,000đ (equivalent to $6,000), 200,000,000đ (equivalent to $10,257), 50,000,000đ (equivalent to $2,439), 100,000,000đ (equivalent to $4,878), 50,000,000đ (equivalent to $2,439), 100,000,000đ (equivalent to $4,878), 100,000,000đ (equivalent to $4,878), 200,00,000đ (equivalent to $9,756), 200,00,000đ (equivalent to $9,756), 100,00,000đ (equivalent to $4,878), 73,00,000đ (equivalent to $3,561) and 30,000,000đ (equivalent to $1,422) from Ms. Ung under the Ung Revolver on November 18, December 2, and December 22, 2010, January 7, January 17, January 27, March 7, April 7, April 9, April 14, April 19, April 20, June 27, July 5, July 14 and October 25, 2011 respectively. In addition, the Company borrowed additional funds advanced in U.S. currency of $10,000, $1,000, $9,000, $9,000, $9,000 and $15,000 on January 4, January 18, January 26, May 10, July 15 and August 16, 2011, respectively. An aggregate of $31,173 and $48,086 was repaid on the Ung Revolver in San Diego, California during the six months ended October 31, 2011 and the year ended April 30, 2011, respectively. On September 29, 2011, the Ung Revolver was amended to extend the August 3, 2011 due date to March 31, 2012 with no other change to the terms. Additionally, the Company borrowed an additional $5,000, 130,000,000đ (equivalent to $6,100), $9,000 and 63,000,000đ (equivalent to $3,000) under the Ung Revolver on November 1, November 4, December 14 and December 15, 2011, respectively. Further, on November 23, December 12 and December 13, 2011, the Company repaid $5,000, $3,045 and $3,000 on the Ung Revolver, respectively.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

1312. ~~Accrued~~Due ~~and~~to ~~other~~related ~~liabilities~~parties (continued)

~~Accrued~~On September 12, 2009, the Company executed a note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and ~~other~~Chairman ~~liabilities~~of the Board of Directors, for $18,000; the promissory note was due December 12, 2009 (see Note 11). Interest accrues monthly at ~~October~~a rate of Ten Percent (10%) per annum (the “Thomas First Loan”). Proceeds were used to fund general operations. On December 3, 2009, the Thomas First Loan was amended to extend the December 12, 2009 due date to February 28, 2010 with no other change to the terms. On February 25, 2010, the Thomas First Loan was amended to extend the due date to May 31, ~~and~~2010 ~~April~~with no other change to the terms. On May 29, 2010, the Thomas First Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas First Loan was amended to extend the due date to September 30, 2011 ~~consisted~~with no other change to the terms. Additionally, on September 29, 2011, the Thomas First Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On August 10, 2011, the Company made a partial payment of $1,500 on the ~~following:~~Thomas First Loan applied to accrued interest. On October 24, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied to accrued interest. On December 5, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $1,794 on the Thomas First Loan with $413 applied to accrued interest and $1,381 applied as a partial repayment of principal. On December 14, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied as a partial repayment of principal. On December 16, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied as a partial repayment of principal. On December 21, 2011, the Company made a partial payment of $500 on the Thomas First Loan applied as a partial repayment of principal. On December 27, 2011, the Company made a payment of $500 on the Thomas First Loan with $93 applied to accrued interest and $407 applied as a partial repayment of principal. On January 22, 2012, the Company made an aggregate payment of $3,311 on the Thomas First Loan with $94 applied to accrued interest and $3,217 applied as a partial repayment of principal. On January 30, 2012, the Company made a payment of $624 on the Thomas First Loan with $22 applied to accrued interest and $602 applied as a partial repayment of principal. On January 31, 2012, the Company owes $9,396 on the Thomas First Loan. On February 22, 2012, the Company made an aggregate payment of $5,546 on the Thomas First Loan with $59 applied to accrued interest and $5,487 applied as a partial repayment of principal.

	October 31,		April 30,
	2011		2011
Officer salaries	$	1,498,350	$	1,061,040
Other payroll accruals		71,706		41,641
Liquidated damages		17,659		17,659
Other accrued liabilities		52,484		42,696
Total accrued and other liabilities	$	1,640,199	$	1,163,036

As of October 31 and April 30, 2011, the Company has unpaid salaries and accrued interest owed to officers of $1,498,350 and $1,061,040, respectively. The unpaid salaries bear interest at a rate of Ten Percent (10%) per annum. As of October 31 and April 30, 2011, accrued interest on the salaries was $149,348 and $85,663, respectively. On April 20, 2009, the Company executed convertible notes with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, and Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, each in the amount of $604,027 in satisfaction of unpaid salary, including interest, accrued from July 1, 2007 through January 31, 2009 under their respective employment agreements with the Company (see Notes 10 and 12). On July 6, 2009, the Company executed a convertible note for Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director in the amount of $113,244 in satisfaction of unpaid salary, including interest, accrued from August 7, 2007 through July 6, 2009 under his employment agreement with the Company (see Notes 10 and 12). On March 12, 2010, the Company issued a set of three (3) convertible debentures with the same terms and conditions as the March Debentures (see Note 10 and 12) in satisfaction of unpaid accrued salary and interest for (i) Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors from February 1, 2009 through December 12, 2009 ($329,510.48), (ii) Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, from February 1, 2009 through December 12, 2009 ($329,510.48), and (iii) Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director from July 8, 2009 to January 9, 2010 ($9,645.97) under their respective employment agreements with the Company (the “March Officer Debentures”).

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

12. Due to related parties (continued)

On October 29, 2009, the Company executed a promissory note with Ms. Hue Tran Johnson for $10,000; the revolving credit agreement was due January 29, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Hue Revolver”). Proceeds were used to fund general operations. Ms. Johnson is the wife of Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The Company borrowed an additional $5,000, $10,000, $30,000, $15,000, $5,000, $23,000, $10,000, $20,000, $15,000, $5,000, $30,000, $10,000, $10,000, $10,000, $15,000, $500, $25,000, $10,000, $10,000, $10,000, $10,000, $20,000, $2,500, $2,200, $8,000, $19,000, $9,000, $5,000, $2,500, $3,000, $3,400, $300, $1,500, $2,000, $500 and $1,286 from Ms. Johnson under the Hue Revolver on November 16, November 17, December 2, 2009, January 8, January 28, April 14, July 19, July 20, July 27, August 9, August 30, September 14, September 16, 2010, January 3, January 4, January 18, January 27, February 9, March 4, April12, April 18, June 1, August 3, September 20, September 26, September 27, September 28, October 6, November 10, November 22, December 21, December 22, 2011, January 4, January 5, January 9, and January 12, 2012, respectively. In addition, the Company borrowed additional funds advanced in Hanoi, Vietnam of 200,000,000đ (equivalent to $10,471), 700,000,000đ (equivalent to $36,083) and 400,000,000đ (equivalent to $19,512) on June 23, August 16, 2010, and April 5, 2011, respectively. On January 27, April 19, May 16, August 9, September 22, November 23, 2011 and January 17, 2012, the Company repaid $500, $10,000, $22,200, $2,500, $2,200, $6,500 and $2,000 on the Hue Revolver. On January 21, 2010, the Hue Revolver was amended to extend the January 29, 2010 due date to April 30, 2010 with no other change to the terms. On April 29, 2010, the Hue Revolver was further amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Hue Revolver was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Hue Revolver was further amended to extend the September 30, 2011 due date to March 31, 2012 with no other change to the terms. On March 6, 2012, the Company repaid $7,000 on the Hue Revolver.

On November 30, 2009, the Company executed a note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $30,000; the promissory note was due February 28, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Thomas Second Loan”). Proceeds were used to fund general operations. On February 25, 2010, the Thomas Second Loan was amended to extend the due date to May 31, 2010 with no other change to the terms. On May 29, 2010, the Thomas Second Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas Second Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Thomas Second Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On November 2, 2011, the Company made a partial payment of $2,500 on the Thomas Second Loan applied to accrued interest. On November 4, 2011, the Company made a partial payment of $2,000 on the Thomas Second Loan applied to accrued interest. On November 17, 2011, the Company made a partial payment of $2,000 on the Thomas Second Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $149 on the Thomas Second Loan applied to accrued interest. On January 30, 2012, the Company made a payment of $438 on the Thomas Second Loan applied to accrued interest. On January 31, 2012, the Company owes $30,000 on the Thomas Second Loan. On February 22, 2012, the Company made an aggregate payment of $238 on the Thomas Second Loan applied to accrued interest.

On January 19, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $24,000; the promissory note is due February 18, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Second Loan”). Proceeds were used to fund general operations. On January 25, 2010, an aggregate of $14,000 was repaid on the Ung Second Loan. On February 10, 2010, an additional $10,000 was repaid on the Ung Second Loan. At January 31, 2012, the Company owes $102 of accrued interest on the Ung Second Loan.

On February 12, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $9,000; the promissory note is due March 12, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung Third Loan”). Proceeds were used to fund general operations. On March 3, 2010, $9,000 was repaid on the Ung Third Loan. At January 31, 2012, the Company owes $57 of accrued interest on the Ung Third Loan.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

12. Due to related parties (continued)

On March 12, 2010, the Company converted an aggregate of $668,667 of unpaid salaries and accrued interest owed to its three officers into convertible debentures due in three years offered by the Company, which offering closed on March 12, 2010 (see Note 10). The set of three (3) convertible debentures, with the same terms and conditions as the March Debentures, were issued in satisfaction of unpaid accrued salary and interest for (i) Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors from February 1, 2009 through December 12, 2009 ($329,510.48), (ii) Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, from February 1, 2009 through December 12, 2009 ($329,510.48), and (iii) Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director from July 8, 2009 to January 9, 2010 ($9,645.97) under their respective employment agreements with the Company (the “March Officer Debentures”). The convertible debentures have a three year term and are due March 12, 2013. Interest accrues at Ten Percent (10%) per annum and is due quarterly. The debentures convert, in whole or in part, at the option of each individual noteholder (the “March Officer Investors”) into restricted shares of the Company’s Common Stock at $0.20 per share; representing a beneficial conversion feature. In addition, the March Officer Investor received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 100% of the number of shares issuable pursuant to conversion of the debenture for an aggregate of 3,346,336 restricted shares. The detachable warrants have an exercise price of $0.30 per share, a term of three years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. In the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price below the Conversion Price then the Conversion Price shall be subject to a BBWA adjustment, as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $300,900; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the March Officer Debentures (three years). On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.19 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $35,193 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.18 per share consistent with the BBWA, as defined. On January 24, 2012, the Company issued a convertible debentures (see Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy Debenture”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.178 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $37,148 and $7,513 on December 5, 2011 and January 24, 2012, respectively, in accordance with Codification topic 470-20. The Company has accrued interest, from inception, of $126,406 at January 31, 2012. As of January 31, 2012 the unamortized debt discount was $180,119. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.174 per share consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $7,598 and $7,686 on February 1 and 17, 2012, respectively, in accordance with Codification topic 470-20.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

12. Due to related parties (continued)

On April 16, 2010, in a private assignment of a $50,000 March Debenture (see Convertible Notes 10) an aggregate of $10,000 was assigned to Ms. Tran Lee Johnson ($5,000) and Ms. Lee Tran Johnson ($5,000), both a related party (see Note 12). Ms. Tran Lee Johnson and Ms. Lee Tran Johnson are the daughters of Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The two $5,000 assigned March Debentures, unamortized debt discount and accrued interest have been reclassified as a related party obligation from Convertible Notes 10 and are included in Convertible Notes 11 (the “March Officer Debentures”). On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.19 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $526 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.18 per share consistent with the BBWA, as defined. On January 24, 2012, the Company issued a convertible debentures (see Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy Debenture”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.178 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $556 and $1113 on December 5, 2011 and January 24, 2012, respectively, in accordance with Codification topic 470-20. The Company has accrued interest, from inception, of $1,795 at January 31, 2012. As of January 31, 2012 the unamortized debt discount was $2,696. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.174 per share consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $114 and $115on February 1 and 17, 2012, respectively, in accordance with Codification topic 470-20.

On May 19, 2010, the Hi-Tek Trademark Loan was amended to extend the due date to December 31, 2010 and split the note in two separate convertible notes (see Note 10). The first note for $200,000 includes a new provision for the monthly payment of interest effective July 1, 2010 in arrears, there were no other change to the terms of the original note or the conversion feature (“Hi-Tek Trademark Loan One”). The second note for $314,968 did not change the interest accrual or payment terms; there were no other change to the terms of the original note or the conversion feature (“Hi-Tek Trademark Loan Two”). Also on May 19, 2010, Hi-Tek Private assigned the Hi-Tek Trademark Loan One to Mr. Howard Johnson, a related party. Mr. Johnson is the father of Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors and Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. On December 28, 2010, the Hi-Tek Trademark Loan One was amended to extend the due date to June 30, 2011, with no other change to the terms of the note or the conversion feature. On June 29, 2011, the Hi-Tek Trademark Loan One was further amended to extend the due date to December 31, 2011, with no other change to the terms of the note or the conversion feature. Additionally, on December 29, 2011, the Hi-Tek Trademark Loan One was further amended to extend the due date to July 20, 2012, with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.10 per share consistent with the Galaxy 3rd. Loan. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.024 per share consistent with the Asher First Conversion. The additional beneficial conversion feature was calculated to be zero on August 18 and December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $1,713 and unamortized debt discount of zero on the Hi-Tek Trademark Loan One, held by Mr. Howard Johnson, as of January 31, 2012. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.012 per share consistent with the Asher Third Conversion. The additional beneficial conversion feature was calculated to be zero on February 1 and 17 and March 8, 2012 in accordance with Codification topic 470-20.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

12. Due to related parties (continued)

On August 30, 2010, the Company executed a note with Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director, for $20,500; the promissory note was due September 30, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Huynh Loan”). Proceeds were used to fund general operations. On September 30, 2010, the Huynh Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Huynh Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Huynh Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

12. Due to related parties (continued)

On November 3, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for 288,008,000đ (equivalent to $14,800); the revolving credit agreement is due August 3, 2011 (see Note 11). Interest accrues monthly at a rate of Twelve Percent (12%) per annum (the “Ung Revolver”). Proceeds were used to fund general operations in Vietnam. The Company borrowed an additional 389,200,000đ (equivalent to $20,000), 583,800,000đ (equivalent to $30,000), 194,800,000đ (equivalent to $10,000), 194,800,000đ (equivalent to $10,000), 116,940,000đ (equivalent to $6,000), 200,000,000đ (equivalent to $10,257), 50,000,000đ (equivalent to $2,439), 100,000,000đ (equivalent to $4,878), 50,000,000đ (equivalent to $2,439), 100,000,000đ (equivalent to $4,878), 100,000,000đ (equivalent to $4,878), 200,00,000đ (equivalent to $9,756), 200,00,000đ (equivalent to $9,756), 100,00,000đ (equivalent to $4,878), 73,00,000đ (equivalent to $3,561), 30,000,000đ (equivalent to $1,422), 120,600,000đ (equivalent to $5,660), 130,000,000đ (equivalent to $6,119), 63,000,000đ (equivalent to $3,100) and 42,000,000đ (equivalent to $1,980) from Ms. Ung under the Ung Revolver on November 18, December 2, and December 22, 2010, January 7, January 17, January 27, March 7, April 7, April 9, April 14, April 19, April 20, June 27, July 5, July 14, October 25, November 1, November 4, December 15, December 23, 2011 respectively. In addition, the Company borrowed additional funds advanced in U.S. currency of $10,000, $1,000, $9,000, $9,000, $9,000, $15,000, $9,000, $3,000 and $5,000 on January 4, January 18, January 26, May 10, July 15, August 16, December 14, 2011, January 4 and January 12, 2012, respectively. An aggregate of $48,677 and $48,086 was repaid on the Ung Revolver in San Diego, California during the nine months ended January 31, 2012 and the year ended April 30, 2011, respectively. On September 29, 2011, the Ung Revolver was amended to extend the August 3, 2011 due date to March 31, 2012 with no other change to the terms. On January 31, 2012, the Company owes $157,027 on the Ung Revolver. Additionally, the Company borrowed an additional $5,000 under the Ung Revolver on February 22, 2012. Further, on February 13 and March 6, 2012, the Company repaid $1,077 and $8,000 on the Ung Revolver, respectively.

13. Accrued and other liabilities

Accrued and other liabilities at January 31, 2012 and April 30, 2011 consisted of the following:

	January 31,		April 30,
	2012		2011

Officer salaries	$	1,716,876	$	1,061,040
Other payroll accruals		80,229		41,641
Liquidated damages		16,534		17,659
Other accrued liabilities		58,340		42,696
Total accrued and other liabilities	$	1,871,979	$	1,163,036

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

13. Accrued and other liabilities (continued)

OnAs ~~February~~of 9,January ~~2007~~31, in2012 ~~connection~~and ~~with~~April ~~the~~30, ~~February Financing~~2011, the Company ~~executed~~has anunpaid ~~investor’s~~salaries ~~registration~~and ~~rights~~accrued ~~agreement~~interest ~~(the~~owed ~~“IRRA”)~~to byofficers ~~and~~of ~~between~~$1,716,876 ~~the~~and ~~February~~$1,061,040, ~~Investors~~respectively. The ~~participating~~unpaid insalaries ~~the~~bear ~~February~~interest ~~Financing~~at ~~and~~a ~~the~~rate ~~Company~~of ~~(see~~Ten ~~Note~~Percent (10%) per annum. ~~Pursuant~~As toof ~~the~~January ~~terms~~31, of2012 ~~the~~and ~~IRRA~~April as30, ~~amended~~2011, accrued interest on ~~August~~the ~~10,~~salaries ~~2007~~was $189,374 ~~the~~and ~~February~~$85,663, ~~Investors~~respectively. On ~~shall~~April be20, ~~entitled~~2009, tothe ~~liquidated~~Company ~~damages~~executed ~~equal~~convertible tonotes ~~One~~with ~~Percent~~Mr. ~~(1%)~~Thomas ofJohnson, the ~~outstanding~~Company’s ~~convertible~~Chief ~~debentures~~Executive ~~issued~~Officer inand ~~the~~Chairman ~~February~~of ~~Financing (~~the ~~“Liquidated~~Board ~~Damages”)~~of ~~for~~Directors, ~~every~~and ~~thirty~~Dr. ~~(30)~~Lee ~~day~~Johnson, ~~period~~the ~~that~~Company’s ~~the~~President, ~~registration~~Chief ~~statement~~Technology isOfficer, ~~not~~Chief ~~declared~~Financial ~~effective~~Officer byand ~~December~~a 14Director, ~~2007~~each (in the ~~“Effectiveness~~amount ~~Deadline”)~~of $604,027 ~~limited~~in tosatisfaction aof ~~total~~unpaid ofsalary, ~~ten~~including ~~such~~interest, ~~30-day~~accrued ~~periods. One~~from ~~such~~July ~~30-day~~1, ~~period~~2007 ~~was~~through ~~funded~~January ~~concurrent~~31, 2009 under their respective employment agreements with the ~~August~~Company ~~10,~~(see ~~2007~~Notes ~~IRRA~~10 ~~amendment~~ and as12). On ofJuly ~~September~~6, ~~2008~~2009, the ~~remaining~~Company ~~nine~~executed ~~30-day~~a ~~periods~~convertible ~~were~~note ~~owed~~for toMr. ~~the~~Louis ~~February Investors~~P. On ~~January 31~~Huynh, ~~2009,~~formerly anthe ~~aggregate~~Company’s ofGeneral 15Counsel,~~300~~ ~~restricted~~Executive ~~shares~~Vice President of ~~the~~Operations ~~Company’s~~and ~~Common~~Business ~~Stock~~Development, ~~was~~Corporate ~~issued~~Secretary toand ~~four~~a ~~(4)~~Director ~~February~~in ~~Investors~~the amount of $113,244 in satisfaction of ~~their~~unpaid ~~Liquidated~~salary, ~~damages~~including ~~($11~~interest,~~475). Between~~ ~~March~~accrued ~~and~~from August 7, ~~2009~~2007 through July 6, an2009 ~~aggregate~~under ofhis ~~thirteen~~employment ~~(13)~~agreement ~~February~~with ~~Investors~~the Company (see Notes 10 and 1112). On ~~agreed~~March to12, ~~modify~~2010, the ~~terms~~Company ofissued ~~their~~a ~~February~~set ~~Debentures~~of three (3) convertible debentures with the ~~“Extended~~same ~~Notes”)~~terms toand ~~include~~conditions ~~their~~as ~~unpaid~~the ~~Liquidated~~March ~~Damages~~Debentures (~~$29,205~~see Note 10 and 12)~~. On~~ ~~June~~in ~~17,~~satisfaction ~~2010~~of ~~one~~unpaid ~~(1)~~accrued ~~February~~salary ~~Investors~~and ~~(see~~interest ~~Note~~for 10(i) ~~agreed~~Mr. toThomas ~~modify~~Johnson, the ~~terms~~Company’s ofChief ~~their~~Executive ~~February~~Officer ~~Debenture~~and (Chairman of the ~~“Vision~~Board ~~Debenture”)~~of toDirectors ~~include~~from ~~their~~February ~~unpaid~~1, ~~Liquidated~~2009 ~~Damages~~through December 12, 2009 ($45329,~~000~~510.48), (ii) Dr. As ofLee ~~October~~Johnson, 31the Company’s President, ~~2011~~Chief Technology Officer, ~~Liquidated~~Chief ~~Damages~~Financial ~~are~~Officer ~~owed~~and toa ~~the~~Director, ~~two~~from ~~(2)~~February ~~holders~~1, of2009 ~~the~~through ~~Defaulted~~December ~~Debentures~~12, 2009 ($10329,~~125~~510.48), and ~~to three~~ (3iii) ~~February~~Mr. ~~Investors~~Louis ~~who~~P. ~~previously~~Huynh, ~~converted~~formerly ~~their~~the ~~February~~Company’s ~~Debenture~~General ~~into~~Counsel, ~~common~~Executive ~~stock~~Vice President of ~~the~~Operations ~~Company~~and Business Development, Corporate Secretary and a Director from July 8, 2009 to January 9, 2010 ($79,~~534~~645.97) ~~are~~under ~~owed~~their ~~for~~respective ~~nine~~employment ~~such~~agreements ~~30-day~~with ~~periods~~the Company (the “March Officer Debentures”).

On February 9, 2007, in connection with the February Financing, the Company executed an investor’s registration rights agreement (the “IRRA”) by and between the February Investors participating in the February Financing and the Company (see Note 10). Pursuant to the terms of the IRRA as amended on August 10, 2007, the February Investors shall be entitled to liquidated damages equal to One Percent (1%) of the outstanding convertible debentures issued in the February Financing (the “Liquidated Damages”) for every thirty (30) day period that the registration statement is not declared effective by December 14, 2007 (the “Effectiveness Deadline”), limited to a total of ten such 30-day periods. One such 30-day period was funded concurrent with the August 10, 2007 IRRA amendment and as of September, 2008 the remaining nine 30-day periods were owed to the February Investors. On January 31, 2009, an aggregate of 15,300 restricted shares of the Company’s Common Stock was issued to four (4) February Investors in satisfaction of their Liquidated damages ($11,475). Between March and August, 2009, an aggregate of thirteen (13) February Investors (see Notes 10 and 11) agreed to modify the terms of their February Debentures (the “Extended Notes”) to include their unpaid Liquidated Damages ($29,205). On June 17, 2010 one (1) February Investors (see Note 10) agreed to modify the terms of their February Debenture (the “Vision Debenture”) to include their unpaid Liquidated Damages ($45,000). As of January 31, 2012, Liquidated Damages are owed to the one (1) holder of the Defaulted Debentures ($9,000) and to three (3) February Investors who previously converted their February Debenture into common stock of the Company ($7,534) are owed for nine such 30-day periods.

14. Major customer and segment information

The Company currently operates solely in one industry segment: the marketing and registration of domain names principally for the government of Vietnam. The Company has operations within Vietnam in support its domain name registration business segment. The Company’s revenue is concentrated on the Vietnamese ccTLD ’.vn‘, creating a risk of concentration associated with the revenue of a single service (see Note 2). The loss of this single service could cause severe damage to our financial future. The Company will operate in additional segments when it commences significant operation of online services to include Internet advertising; Internet data centers/micro-modular data centers; or wireless virtual fiber.

We sell the registration of domain names on our web site and through a network of resellers. The individual registrants of the domain names we sell are worldwide and a reseller’s customers are generally not limited to the country within which they conduct their business, except for our reseller’s within Vietnam. Our resellers in Vietnam principally only sell within the country and registrants within Vietnam primarily only purchase from a source within the country, not from outside of Vietnam. The Company derived significant revenues from sales within Vietnam of 9.39% and 1314.78% of consolidated revenues during the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011, respectively with the remaining revenue coming ~~from~~fromi ~~international~~nternational registrants. Related accounts receivable within Vietnam from our two master resellers totaled 2512.30% and 4648.84% for the northern reseller and 4778.35% and 37.07% for the southern reseller at ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011, respectively. Within our international registrants sales we derived significant revenues from two resellers of 1110.74% and 1110.91% for reseller A and 11.40% and 1112.40% for reseller B of consolidated revenues during the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011, respectively. Related customer deposits were 128.31% and 1711.10% for reseller A and 4858.57% and 4171.89% for reseller B at ~~October~~January 31, ~~2011~~2012 and ~~2010~~2011, respectively.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

15. Related party transactions

Employment Agreements

On July 18, 2006, at the completion of the Malers Merger, Dr. Lee Johnson and Mr. Thomas Johnson were appointed to the Board of Directors of the Company. In addition, Mr. Thomas Johnson was elected to serve as Chairman of the Board of Directors

On October 8, 2006, Dr. Lee Johnson’s executive employment agreement was approved by the Board of Directors under which he was appointed as the Company’s President, Chief Technical Officer, and Chief Financial Officer. Pursuant to the terms of the executive employment agreement, Dr. Lee Johnson shall receive an annual salary of Three Hundred Sixty Thousand Dollars ($360,000) and shall receive stock options totaling in the aggregate 3,600,000 restricted shares; such shares are exercisable, at a per share price of $0.50, into shares of the Company’s Common Stock (the “LJ Employment Options”). The LJ Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. Dr. Johnson is also eligible to receive additional equity and cash bonuses in connection with the successful performance of his duties.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of October 31, 2011

15. Related party transactions (continued)

Employment Agreements (continued)

As President, CTO, and CFO, Dr. Lee Johnson shall serve as such until the earlier of (i) his resignation, (ii) appointment of his successor or (iii) his termination. As a director of the Company, he shall serve until the earlier of (i) his resignation, (ii) election of his successor or (iii) his removal by the shareholders of the Company.

On October 9, 2006, Mr. Thomas Johnson’s executive employment agreement was approved by the Board of Directors under which he was appointed as the Company’s Chief Executive Officer. Pursuant to the terms of the executive employment agreement, Mr. Johnson shall receive an annual salary of Three Hundred Sixty Thousand Dollars ($360,000) and shall receive stock options totaling in the aggregate 3,600,000 restricted shares; such shares are exercisable, at a per share price of $0.50, into shares of the Company’s Common Stock (the “TJ Employment Options”). The TJ Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. Mr. Johnson is also eligible to receive additional equity and cash bonuses in connection with the successful performance of his duties.

As CEO, Mr. Thomas Johnson shall serve as such until the earlier of (i) his resignation, (ii) appointment of his successor or (iii) his termination. As a director of the Company, he shall serve until the earlier of (i) his resignation, (ii) election of his successor or (iii) his removal by the shareholders of the Company.

On October 9, 2006, Mr. Louis Huynh’s consulting agreement was amended to be an employment agreement under which he was appointed as the Company’s General Counsel. Pursuant to the terms of the employment agreement, Mr. Huynh shall receive an annual salary of Sixty Thousand Dollars ($60,000) and shall receive stock options totaling in the aggregate 300,000 restricted shares; such shares are exercisable, at a per share price of $0.50, into shares of the Company’s Common Stock (the “Huynh Employment Options”). The Huynh Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. On November 20, 2006, Mr. Huynh was appointed to the Company’s Board of Directors. On August 7, 2007, Mr. Huynh’s executive employment agreement was approved by the Board of Directors, making him the General Counsel and Secretary. Pursuant to the terms of the executive employment agreement, Mr. Huynh shall receive an annual salary of One Hundred Twenty Thousand Dollars ($120,000), a grant of 19,445 restricted shares of the Company’s Common Stock and shall receive stock options totaling in the aggregate 200,000 restricted shares and are exercisable, at a per share price of $1.80, the Company’s market price on the date of grant, into shares of the Company’s Common Stock (the “Huynh 2nd. Employment Options”). The Huynh 2nd. Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. On June 10, 2008, Mr. Huynh was appointed the Company’s Executive Vice President, Operations and Business Development. On October 4 2011, Mr. Huynh, the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director notified management and the Board of Directors that he is resigning as the Company’s General Counsel, Executive Vice President of Operations and Business Development and Corporate Secretary to become a consultant for Dot VN providing Operations and Business Development Services. On October 4, 2011, Mr. Huynh and the Company executed a consulting agreement (the “Huynh Consulting Agreement”) pursuant to which Mr. Huynh (the “Consultant”) will be entitled to a fee of $8,500 per month as well as any performance bonuses in cash and stock as may be approved by the Company from time to time. Additionally, Company affirms and (to the extent necessary) extends the term of all vested stock options held by Consultant through the original expiration dates of such options. The Huynh Consulting Agreement has a term of three (3) years. Mr. Huynh will continue to serve on our Board of Directors.54

OnDot ~~October 9~~VN, ~~2006, the Company entered into an employment agreement with Ms~~INC. ~~Ngoc~~AND Anh Ung under which she was appointed as the Company’s Vice President of Operations and Business Development, Asia for a term of five years. Pursuant to the terms of the employment agreement, Ms. Ung shall receive an annual salary of Eighteen Thousand Dollars ($18,000) and shall receive stock options totaling in the aggregate 150,000 restricted shares; such shares are exercisable, at a per share price of $0.50, into shares of the Company’s Common Stock (the “Ung Employment Options”). The Ung Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. Beginning in October of 2008, Ms. Ung’s salary was increased to Twenty Thousand, Four Hundred Dollars ($20,400) per year. Beginning in May of 2010, Ms. Ung’s salary was increased to Forty-Eight Thousand Dollars ($48,000) per year. In April of 2011, pursuant to her reassignment to the Company’s Headquarters in San Diego, Ms. Ung was paid a preliminary additional amount of Three Hundred Dollars ($300) per month. After two months, beginning in June 2011, Ms. Ung’s salary was increased by an additional Two Thousand Dollars ($2,000), resulting in an aggregate salary of Six Thousand, Three Hundred Dollars ($6,300) per month or an annual salary of Seventy-Five Thousand, Six Hundred Dollars ($75,600).SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Employment Agreements (continued)

On October 9, 2006, Mr. Louis Huynh’s consulting agreement was amended to be an employment agreement under which he was appointed as the Company’s General Counsel. Pursuant to the terms of the employment agreement, Mr. Huynh shall receive an annual salary of Sixty Thousand Dollars ($60,000) and shall receive stock options totaling in the aggregate 300,000 restricted shares; such shares are exercisable, at a per share price of $0.50, into shares of the Company’s Common Stock (the “Huynh Employment Options”). The Huynh Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. On November 20, 2006, Mr. Huynh was appointed to the Company’s Board of Directors. On August 7, 2007, Mr. Huynh’s executive employment agreement was approved by the Board of Directors, making him the General Counsel and Secretary. Pursuant to the terms of the executive employment agreement, Mr. Huynh shall receive an annual salary of One Hundred Twenty Thousand Dollars ($120,000), a grant of 19,445 restricted shares of the Company’s Common Stock and shall receive stock options totaling in the aggregate 200,000 restricted shares and are exercisable, at a per share price of $1.80, the Company’s market price on the date of grant, into shares of the Company’s Common Stock (the “Huynh 2nd. Employment Options”). The Huynh 2nd. Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. On June 10, 2008, Mr. Huynh was appointed the Company’s Executive Vice President, Operations and Business Development. On October 4 2011, Mr. Huynh, the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director notified management and the Board of Directors that he is resigning as the Company’s General Counsel, Executive Vice President of Operations and Business Development and Corporate Secretary to become a consultant for Dot VN providing Operations and Business Development Services. On October 4, 2011, Mr. Huynh and the Company executed a consulting agreement (the “Huynh Consulting Agreement”) pursuant to which Mr. Huynh (the “Consultant”) will be entitled to a fee of $8,500 per month as well as any performance bonuses in cash and stock as may be approved by the Company from time to time. Additionally, Company affirms and (to the extent necessary) extends the term of all vested stock options held by Consultant through the original expiration dates of such options. The Huynh Consulting Agreement has a term of three (3) years. On January 13, 2012, Mr. Louis P. Huynh a director of the Company tendered his resignation as a director of the Company effective immediately. Mr. Huynh will continue to provide part-time services to the Company under his October 4, 2011consulting agreement.

On October 9, 2006, the Company entered into an employment agreement with Ms. Ngoc Anh Ung under which she was appointed as the Company’s Vice President of Operations and Business Development, Asia for an initial term of five years. Pursuant to the terms of the employment agreement, Ms. Ung shall receive an annual salary of Eighteen Thousand Dollars ($18,000) and shall receive stock options totaling in the aggregate 150,000 restricted shares; such shares are exercisable, at a per share price of $0.50, into shares of the Company’s Common Stock (the “Ung Employment Options”). The Ung Employment Options shall vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years from the date of vesting. Beginning in October of 2008, Ms. Ung’s salary was increased to Twenty Thousand, Four Hundred Dollars ($20,400) per year. Beginning in May of 2010, Ms. Ung’s salary was increased to Forty-Eight Thousand Dollars ($48,000) per year. In April of 2011, pursuant to her reassignment to the Company’s Headquarters in San Diego, Ms. Ung was paid a preliminary additional amount of Three Hundred Dollars ($300) per month. After two months, beginning in June 2011, Ms. Ung’s salary was increased by an additional Two Thousand Dollars ($2,000), resulting in an aggregate salary of Six Thousand, Three Hundred Dollars ($6,300) per month or an annual salary of Seventy-Five Thousand, Six Hundred Dollars ($75,600).

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

15. Related party transactions (continued)

Other Agreements

On August 1, 2007, the Company executed a convertible note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, in the amount of $1,989,066 in satisfaction of unpaid accrued salary, including interest, from January, 2003 through June, 2007 under his employment agreement with the Company (the “TJ First Note”). The TJ First Note had a term of one year and accrued interest at a rate of Eight Percent (8%) per annum (see Note 10). At the election of the holder, the amount due and owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at a per share price of $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion Price, to a price equal to such issue price. On August 14, 2008, the Company executed a convertible promissory note for $2,160,766 due February 15, 2009 plus accrued interest at Eight Percent (8%) per annum with Mr. Johnson (the “TJ Second Note”) in exchange for the unpaid balance owed under the TJ First Note which was cancelled (see Note 10). The terms and conditions of the TJ Second Note are materially the same as the TJ First Note that expired August 1, 2008. At the election of the holder, the amount due and owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price (the “Subsequent Price”) below the Conversion Price, to a price equal to such issue price. On February 15, 2009, the TJ Second Note was amended to extend the due date to March 17, 2009 with no other change to the terms of the note or the conversion feature. On March 17, 2009, the TJ Second Note was further amended to extend the due date to March 31, 2009 with no other change to the terms of the note or the conversion feature. On April 20, 2009, the Company executed a convertible promissory note due October 16, 2009 plus accrued interest at Eight Percent (8%) per annum (the “TJ Third Note”) issued (i) in exchange for the unpaid balance owed under the TJ Second Note ($2,280,631) which was cancelled and (ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through January 31, 2009 under his employment agreements with the Company ($604,027) (see Note 10). The terms and conditions of the TJ Third Note are materially the same as the TJ Second Note that expired March 31, 2009 except that in the TJ Third Note the adjusted Conversion Price is established as One Hundred Ten Percent (110%) of the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On October 12, 2009, the TJ Third Note was amended to extend the due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On November 17, 2009, the Company agreed to a 50% conversion of the outstanding balance ($1,510,489.50) at $0.30 per share and issued 5,034,965 restricted shares of the Company’s Common Stock and a $1,510,489.41 convertible note due June 30, 2010 plus accrued interest at Eight Percent (8%) per annum (the “TJ Fourth Note”) (see Note 10). The terms and conditions of the TJ Fourth Note are materially the same as the TJ Third Note, except that in the new note the amount due and owing pursuant to such note may be converted in whole or any portion thereof, into restricted shares of the Company’s Common Stock. At the election of the holder, the amount due and owing pursuant to such note, or any portion thereof, may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). ~~The~~ ~~Company has accrued interest of $34,833 at October 31, 2011.~~ On June 29, 2010, the TJ Fourth Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the TJ Fourth Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the notes or the conversion feature. Additionally, on September 29, 2011, the TJ Fourth Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $402,104 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the TJ Fourth Note. On March 16, 2011, the Company issued 4,545,455 shares of the Company’s common stock to Mr. Thomas Johnson pursuant to the terms of the TJ Fourth Note; Mr. Thomas Johnson exercised his right to convert $1,000,000, a portion of the funds owed to him under the TJ Fourth Note, into common stock of the Company at $0.22 per share. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $420,251 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the TJ Fourth Note. As ofOn ~~October~~December 315, 2011, ~~the~~pursuant ~~unamortized~~to ~~debt~~the ~~discount~~terms ~~was~~of ~~zero. On~~the ~~March~~Asher ~~16,~~First ~~2011,~~Debenture the Company issued 4333,~~545,455~~333 shares of the Company’s ~~common~~Common ~~stock~~Stock toat Mra conversion price of $0.024 ~~Thomas~~per ~~Johnson~~share ~~pursuant~~(the to“Asher First Conversion”). Accordingly, the ~~terms~~Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); Mrrepresenting a beneficial conversion feature. ~~Thomas~~The ~~Johnson~~additional ~~exercised~~beneficial ~~his~~conversion ~~right~~feature was calculated to ~~convert~~be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $149,~~000~~323 at January 31,~~000,~~ a2012. ~~portion~~As of January 31, 2012 the ~~funds~~unamortized ~~owed~~debt todiscount ~~him~~was ~~under~~zero. On January 31, 2012, the Company owes $728,295 on the TJ Fourth Note. On February 1, ~~into~~2012, ~~common~~pursuant ~~stock~~to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.22024 per share (the “Asher Second Conversion”). On ~~December~~February 517, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~833,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~012 per share (the “Asher ~~First~~Third Conversion”). Accordingly, the Adjusted Conversion Price of the TJ Fourth Note is reduced to $0.~~0264~~014 per share (the Asher ~~First~~Third Conversion price of $0.~~024~~012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

5056

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On August 1, 2007, the Company executed a convertible note with Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, in the amount of $1,989,066 in satisfaction of unpaid accrued salary, including interest, from January, 2003 through June, 2007 under his employment agreement with the Company (the “LJ First Note”). The LJ First Note had a term of one year and accrued interest at a rate of Eight Percent (8%) per annum (see Note 10). At the election of the holder, the amount due and owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at a per share price of $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price below the Conversion Price, to a price equal to such issue price. On August 14, 2008, the Company executed a convertible promissory note for $2,160,767 due February 15, 2009 plus accrued interest at Eight Percent (8%) per annum with Dr. Lee Johnson (the “LJ Second Note”) in exchange for the unpaid balance owed under the LJ First Note which was cancelled (see Note 10). The terms and conditions of the LJ Second Note are materially the same as the LJ First Note that expired August 1, 2008. At the election of the holder, the amount due and owing pursuant to such note may be converted into restricted shares of the Company’s Common Stock at $1.43 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into common stock) at a price (the “Subsequent Price”) below the Conversion Price, to a price equal to such issue price. On February 15, 2009, the LJ Second Note was amended to extend the due date to March 17, 2009 with no other change to the terms of the note or the conversion feature. On March 17, 2009, the LJ Second Note was further amended to extend the due date to March 31, 2009 with no other change to the terms of the note or the conversion feature. On April 20, 2009, the Company executed a convertible promissory note due October 16, 2009 plus accrued interest at Eight Percent (8%) per annum (the “LJ Third Note”) issued (i) in exchange for the unpaid balance owed under the LJ Second Note ($2,280,631) which was cancelled and (ii) in satisfaction of unpaid accrued salary and interest accruing since July 1, 2007 through January 31, 2009 under his employment agreements with the Company ($604,027) (see Note 10). The terms and conditions of the LJ Third Note are materially the same as the LJ Second Note that expired March 31, 2009 except that in the LJ Third Note the adjusted Conversion Price is established as One Hundred Ten Percent (110%) of the Subsequent Price where previously the Subsequent Price became the adjusted Conversion Price At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). On October 12, 2009, the LJ Third Note was amended to extend the due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On November 17, 2009, the Company agreed to a 50% conversion of the outstanding balance ($1,510,489.50) at $0.30 per share and issued 5,034,965 restricted shares of the Company’s Common Stock and a $1,510,489.41 convertible note due June 30, 2010 plus accrued interest at Eight Percent (8%) per annum (the “LJ Fourth Note”) (see Note 10). The terms and conditions of the LJ Fourth Note are materially the same as the LJ Third Note, except that in the new note the amount due and owing pursuant to such note may be converted in whole or any portion thereof, into restricted shares of the Company’s Common Stock. At the election of the holder, the amount due and owing pursuant to such note, or any portion thereof, may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.30 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). ~~The Company has accrued interest of $9,182 at October 31, 2011.~~ On June 29, 2010, the LJ Fourth Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the TJ Fourth Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the notes or the conversion feature. Additionally, on September 29, 2011, the LJ Fourth Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the notes or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On March 12, 2010, the Company closed an offering of convertible debentures (see Convertible Notes 10 and 11) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $402,104 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the LJ Fourth Note. On March 16, 2011, the Company issued 6,818,182 shares of the Company’s common stock to Dr. Lee Johnson pursuant to the terms of the LJ Fourth Note; Dr. Lee Johnson exercised his right to convert $1,500,000, a portion of the funds owed to him under the LJ Fourth Note, into common stock of the Company at $0.22 per share. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $111,304 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the LJ Fourth Note. AsOn ofDecember ~~October 31~~5, 2011, ~~the~~pursuant ~~unamortized~~to ~~debt~~the ~~discount~~terms ~~was~~of ~~zero. On~~the ~~March~~Asher ~~16,~~First ~~2011,~~Debenture the Company issued 6333,~~818,182~~333 shares of the Company’s ~~common~~Common ~~stock~~Stock toat Dra conversion price of $0.024 ~~Lee~~per ~~Johnson~~share ~~pursuant~~(the to“Asher First Conversion”). Accordingly, the ~~terms~~Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); Drrepresenting a beneficial conversion feature. The ~~Lee~~additional ~~Johnson~~beneficial ~~exercised~~conversion ~~his~~feature ~~right~~was calculated to ~~convert~~be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $113,~~500,000,~~001 aat ~~portion~~January 31, 2012. As of January 31, 2012 the ~~funds~~unamortized ~~owed~~debt todiscount ~~him~~was ~~under~~zero. On January 31, 2012, the Company owes $191,972 on the LJ Fourth Note. On February 1, ~~into~~2012, ~~common~~pursuant ~~stock~~to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.22024 per share (the “Asher Second Conversion”). On ~~December~~February 517, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~833,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~012 per share (the “Asher ~~First~~Third Conversion”). Accordingly, the Adjusted Conversion Price of the LJ Fourth Note is reduced to $0.~~0264~~014 per share (the Asher ~~First~~Third Conversion price of $0.~~024~~012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

5157

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On July 6, 2009, the Company executed a convertible note with Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director, for $113,244 in satisfaction of unpaid accrued salary, including interest, from August 7, 2007 through July 6, 2009 under Mr. Huynh’s employment agreement with the Company (the “Huynh Note”) (see Note 10). The note was due October 16, 2009 and accrues interest monthly at Eight Percent (8%) per annum. The beneficial conversion feature was calculated to be zero at the time of issuance in accordance with Codification topic 470-20. At the election of the holder, the amount due and owing pursuant to such note may be converted in restricted shares of the Company’s Common Stock at a per share price of $0.46 per share (the “Conversion Price”). The Conversion Price shall be adjusted downward in the event Dot VN issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price (the “Subsequent Price”) below the Conversion Price times Ninety Percent (90%), to a price equal to such Subsequent Price times One Hundred Ten Percent (110%) (the “Adjusted Conversion Price”). ~~The Company has accrued interest of $23,048 at October 31, 2011.~~ On October 12, 2009, the Huynh Note was amended to extend the due date to December 31, 2009 with no other change to the terms of the note or the conversion feature. On December 29, 2009, the Huynh Note was amended to extend the due date to June 30, 2010 with no other change to the terms of the note or the conversion feature. On June 29, 2010, the Huynh Note was amended to extend the due date to December 31, 2010 with no other change to the terms of the note or the conversion feature. On December 13, 2010, the Huynh Note was amended to extend the due date to September 30, 2011 with no other change to the terms of the note or the conversion feature. Additionally, on September 29, 2011, the Huynh Note was further amended to extend the due date to March 31, 2012 with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the five extensions. On January 14, 2010, the Company closed an offering of convertible debentures (see Note 10) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.30 per share (the “December Debentures”). Accordingly, the Adjusted Conversion Price of the Huynh ~~Loan~~Note is reduced to $0.33 per share (December Debentures conversion price of $0.30 times 110%). The additional beneficial conversion feature was calculated to be $40,732 on January 14, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the Huynh Note. On March 12, 2010, the Company closed an offering of convertible debentures (see Note 10) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.20 per share (the “March Debentures”). Accordingly, the Conversion Price of the Huynh ~~Loan~~Note is reduced to $0.22 per share (the March Debentures conversion price of $0.20 times 110%). The additional beneficial conversion feature was calculated to be $56,622 on March 12, 2010 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (June 30, 2011) of the Huynh Note. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Adjusted Conversion Price of the Huynh ~~Loan~~Note is reduced to $0.11 per share (the Galaxy 3rd. Loan warrant price of $0.10 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be $15,890 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. The additional beneficial conversion feature was amortized over the remaining term (September 30, 2011) of the Huynh Note. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh Note is reduced to $0.0264 per share (the Asher First Conversion price of $0.024 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $25,815 at January 31, 2012. As of ~~October~~January 31, ~~2011~~2012 the unamortized debt discount was zero. On ~~December~~January 531, ~~2011~~2012, the Company owes $139,059 on the Huynh Note. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~533,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Adjusted Conversion Price of the Huynh ~~Loan~~Note is reduced to $0.~~0264~~014 per share (the Asher ~~First~~Third Conversion price of $0.~~024~~012 times 110%); representing a beneficial conversion feature. The additional beneficial conversion feature was calculated to be zero on ~~December~~February 51 and 17 and March 8, ~~2011~~2012 in accordance with Codification topic 470-20.

5258

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On July 6, 2009, the Company granted, under the newly adopted Dot VN, Inc. 2009 Stock Option Plan, stock options to purchase an aggregate of 11,551,500 shares of the Company’s Common Stock to Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director (5,400,000 shares), Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors (5,400,000 shares), Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director (751,500 shares) and Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia (225,000 shares). The options have an exercise price of $0.46, a Ten Percent (10%) premium to the closing market price, vest one third at the date of grant and one third at the end of the first and second year from the date of grant. An aggregate of 2,181,519 shares are issued as incentive stock options, as defined by U.S. treasury regulations and expire five years (1,304,346 shares) for 510% shareholders and ten years (877,173 shares) for all others from the date of grant for and an aggregate of 9,594,981 shares are issued as non-qualified stock options and expire ten years from the date of grant. The Company has recorded Option bonus expense relating to these options of $~~134~~136,~~771~~974 and $1,095,792 for the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively, in accordance with Codification topic 718 (see Note 16).

On July 8, 2009, each of (i) Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, (ii) Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer, and a Director and iii) Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director entered into a lock-up agreement with the Company pursuant to which each such person agreed that he will not offer, sell, contract to sell, grant an option to purchase, or otherwise dispose of any shares of the Company’s Common Stock owned, acquirable or vested as of the date of the lock-up agreement until July 8, 2010.

On September 12, 2009, the Company executed a note with Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, for $18,000; the promissory note was due December 12, 2009 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Thomas First Loan”). Proceeds were used to fund general operations. On December 3, 2009, the Thomas First Loan was amended to extend the December 12, 2009 due date to February 28, 2010 with no other change to the terms. On February 25, 2010, the Thomas First Loan was amended to extend the due date to May 31, 2010 with no other change to the terms. On May 29, 2010, the Thomas First Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas First Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the Thomas First Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On August 10, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied to accrued interest. On October 24, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied to accrued interest. On December 5, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied to accrued interest. On December 9, 2011, the Company made a payment of $1,~~793~~794 on the Thomas First Loan with $~~412~~413 applied to accrued interest and $1,381 applied as a partial repayment of principal. On December 14, 2011, the Company made a partial payment of $1,000 on the Thomas First Loan applied as a partial repayment of principal. On December 16, 2011, the Company made a partial payment of $1,500 on the Thomas First Loan applied as a partial repayment of principal. On December 21, 2011, the Company made a partial payment of $500 on the Thomas First Loan applied as a partial repayment of principal. On December 27, 2011, the Company made a payment of $500 on the Thomas First Loan with $93 applied to accrued interest and $407 applied as a partial repayment of principal. On January 22, 2012, the Company made an aggregate payment of $3,311 on the Thomas First Loan with $94 applied to accrued interest and $3,217 applied as a partial repayment of principal. On January 30, 2012, the Company made a payment of $624 on the Thomas First Loan with $22 applied to accrued interest and $602 applied as a partial repayment of principal. On January 31, 2012, the Company owes $9,396 on the Thomas First Loan. On February 22, 2012, the Company made an aggregate payment of $5,546 on the Thomas First Loan with $59 applied to accrued interest and $5,487 applied as a partial repayment of principal.

53Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On ~~October~~September 2918, 2009, the Company executed a ~~promissory~~ note with Ms. ~~Hue~~Ngoc ~~Tran~~Anh ~~Johnson~~Ung, the Company’s Vice President of Operations and Business Development, Asia, for $10,000; the ~~revolving~~promissory ~~credit~~note ~~agreement~~ was due ~~January~~December 2918, ~~2010~~2009 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Hue~~Ung ~~Revolver~~First Loan”). Proceeds were used to fund general operations. ~~Ms.~~On ~~Johnson~~December ~~is the wife of Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The Company borrowed an additional $5,000, $10,000, $30,000, $~~15,~~000,~~ $52009,~~000,~~ ~~$23,000,~~the ~~$10,000,~~Ung ~~$20,000,~~First ~~$15,000,~~Loan ~~$5,000,~~was ~~$30,000,~~amended ~~$10,000,~~to ~~$10,000,~~extend ~~$10,000, $15,000, $500, $25,000, $10,000, $10,000, $10,000, $10,000, $20,000, $2,500, $2,200, $8,000, $19,000 and $9,000 from Ms. Johnson under~~ the ~~Hue Revolver on November 16, November 17,~~ December 218, 2009, ~~January~~due 8,date ~~January~~to ~~28, April 14, July 19, July 20, July 27, August 9, August 30, September 14, September 16, 2010, January 3, January 4, January 18, January 27, February 9,~~ March ~~4, April12, April~~ 18, ~~June~~2010 1,with ~~August~~no 3,other ~~September~~change ~~20, September 26, September 27 and September 28, 2011, respectively. In addition, the Company borrowed additional funds advanced in Hanoi, Vietnam of 200,000,000đ (equivalent~~ to $10,471), 700,000,000đ (equivalent to $36,083) and 400,000,000đ (equivalent to $19,512) on June 23, August 16, 2010, and April 5, 2011, respectively. On January 27, April 19, and May 16, August 9 and September 22, 2011, the ~~Company repaid $500, $10,000, $22,200, $2,500 and $2,200 on the Hue Revolver~~terms. On ~~January~~February 2112, 2010, the ~~Hue~~Ung ~~Revolver~~First Loan was amended to extend the ~~January 29, 2010~~ due date to ~~April~~June 3018, 2010 with no other change to the terms. On ~~April~~June 2910, 2010, the ~~Hue~~Ung ~~Revolver~~First Loan was ~~further~~ amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the ~~Hue~~Ung ~~Revolver~~First Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the ~~Hue~~Ung ~~Revolver~~First Loan was further amended to extend the ~~September 30, 2011~~ due date to March 31, 2012 with no other change to the terms. ~~Additionally,~~On ~~the~~January ~~Company borrowed an additional $2~~31,~~500~~ ~~and $3~~2012,~~000~~ ~~under~~ the ~~Hue Revolver on November 10 and November 22, 2011, respectively. Further, on November 23, 2011, the~~ Company ~~repaid~~owes $612,~~500~~664 on the ~~Hue~~Ung ~~Revolver~~First Loan.

On ~~November~~October 3029, 2009, the Company executed a promissory note with MrMs. ~~Thomas~~Hue Tran Johnson, ~~the Company’s Chief Executive Officer and Chairman of the Board of Directors,~~ for $3010,000; the ~~promissory~~revolving ~~note~~credit agreement was due ~~February~~January 2829, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Thomas~~Hue ~~Second Loan~~Revolver”). Proceeds were used to fund general operations. OnMs. ~~February~~Johnson is the wife of Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director. The Company borrowed an additional $5,000, $10,000, $30,000, $15,000, $5,000, $23,000, $10,000, $20,000, $15,000, $5,000, $30,000, $10,000, $10,000, $10,000, $15,000, $500, $25,000, ~~2010~~$10,000, $10,000, $10,000, $10,000, $20,000, $2,500, $2,200, $8,000, $19,000, $9,000, $5,000, $2,500, $3,000, $3,400, $300, $1,500, $2,000, $500 and $1,286 from Ms. Johnson under the ~~Thomas~~Hue ~~Second~~Revolver ~~Loan~~on ~~was~~November ~~amended~~16, toNovember ~~extend~~17, December 2, 2009, January 8, January 28, April 14, July 19, July 20, July 27, August 9, August 30, September 14, September 16, 2010, January 3, January 4, January 18, January 27, February 9, March 4, April12, April 18, June 1, August 3, September 20, September 26, September 27, September 28, 2011, October 6, November 10, November 22, December 21, December 22, 2011, January 4, January 5, January 9, and January 12, 2012, respectively. In addition, the ~~due~~Company ~~date~~borrowed additional funds advanced in Hanoi, Vietnam of 200,000,000đ (equivalent to ~~May~~$10,471), 31700,000,000đ ~~2010~~(equivalent ~~with~~to no$36,083) ~~other~~and ~~change~~400,000,000đ (equivalent to ~~the~~$19,512) ~~terms~~on June 23, August 16, 2010, and April 5, 2011, respectively. On January 27, April 19, and May 2916, ~~2010~~August 9, ~~the~~September ~~Thomas~~22, ~~Second~~November ~~Loan~~23, ~~was~~2011 ~~amended~~and toJanuary ~~extend~~17, 2012, the ~~due~~Company ~~date~~repaid to$500, ~~December~~$10,000, 31$22,200, ~~2010~~$2,500, ~~with~~$2,200, no$6,500 ~~other~~and ~~change~~$2,000 toon the ~~terms~~Hue Revolver. On ~~December~~January 1321, 2010, the ~~Thomas~~Hue ~~Second~~Revolver ~~Loan~~ was amended to extend the January 29, 2010 due date to ~~September~~April 30, ~~2011~~2010 with no other change to the terms. ~~Additionally,~~On onApril ~~September~~ 29, ~~2011~~2010, the ~~Thomas~~Hue ~~Second~~Revolver ~~Loan~~ was further amended to extend the due date to ~~March~~December 31, ~~2012~~2010 with no other change to the terms. On ~~November~~December 213, ~~2011~~2010, the ~~Company~~Hue ~~made~~Revolver awas ~~partial~~amended ~~payment~~to ofextend ~~$2,500~~the ondue ~~the~~date ~~Thomas~~to ~~Second~~September ~~Loan~~30, ~~applied~~2011 with no other change to ~~accrued~~the ~~interest~~terms. OnAdditionally, ~~November~~on 4September 29, 2011, the ~~Company~~Hue ~~made~~Revolver awas ~~partial~~further ~~payment~~amended ofto $2extend the September 30,~~000~~ on2011 ~~the~~due ~~Thomas~~date ~~Second~~to ~~Loan~~March ~~applied~~31, 2012 with no other change to ~~accrued~~the ~~interest~~terms. On ~~November~~January 1731, ~~2011~~2012, the Company ~~made~~owes ~~a partial payment of~~ $2446,~~000~~621 on the ~~Thomas~~Hue ~~Second Loan applied to accrued interest~~Revolver. On ~~December~~March 96, ~~2011~~2012, the Company ~~made~~repaid ~~a payment of~~ $~~149~~7,000 on the ~~Thomas~~Hue ~~Second Loan applied to accrued interest~~Revolver.

On ~~January~~November 1930, ~~2010~~2009, the Company executed a note with MsMr. ~~Ngoc~~Thomas ~~Anh Ung~~Johnson, the Company’s ~~Vice~~Chief ~~President~~Executive Officer and Chairman of ~~Operations~~the ~~and~~Board ~~Business~~of ~~Development~~Directors, ~~Asia,~~ for $2430,000; the promissory note iswas due February 1828, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Ung~~Thomas Second Loan”). Proceeds were used to fund general operations. On ~~January~~February 25, 2010, anthe ~~aggregate~~Thomas ofSecond ~~$14~~Loan was amended to extend the due date to May 31,~~000~~ 2010 with no other change to the terms. On May 29, 2010, the Thomas Second Loan was ~~repaid~~amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the Thomas Second Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the ~~Ung~~Thomas Second Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On ~~February~~November 102, ~~2010~~2011, anthe ~~additional~~Company made a partial payment of $102,500 on the Thomas Second Loan applied to accrued interest. On November 4, 2011, the Company made a partial payment of $2,000 ~~was~~on ~~repaid~~the Thomas Second Loan applied to accrued interest. On November 17, 2011, the Company made a partial payment of $2,000 on the ~~Ung~~Thomas Second Loan applied to accrued interest. AtOn ~~October~~December 319, 2011, the Company ~~owes~~made a payment of $99149 on the Thomas Second Loan applied to accrued interest. On January 30, 2012, the Company made a payment of $438 on the Thomas Second Loan applied to accrued interest. On January 31, 2012, the Company owes $30,000 on the ~~Ung~~Thomas Second Loan. On February 22, 2012, the Company made an aggregate payment of $238 on the Thomas Second Loan applied to accrued interest.

5460

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On ~~February~~January 1219, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for $924,000; the promissory note is due ~~March~~February 1218, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “Ung ~~Third~~Second Loan”). Proceeds were used to fund general operations. On ~~March~~January 325, 2010, an aggregate of $914,000 was repaid on the Ung ~~Third~~Second Loan. On February 10, 2010, an additional $10,000 was repaid on the Ung Second Loan. At ~~October~~January 31, ~~2011~~2012, the Company owes $55102 of accrued interest on the Ung ~~Third~~Second Loan.

On ~~March~~February 12, 2010, the Company ~~converted~~executed ana ~~aggregate~~note of $668,667 of unpaid salaries and accrued interest owed to its three officers into convertible debentures due in three years offered by the Company, which offering closed on March 12, 2010 (see Note 10). The set of three (3) convertible debentures, with ~~the same terms and conditions as the March Debentures, were issued in satisfaction of unpaid accrued salary and interest for (i) Mr~~Ms. ~~Thomas~~Ngoc ~~Johnson,~~Anh ~~the Company’s Chief Executive Officer and Chairman of the Board of Directors from February 1~~Ung, ~~2009 through December 12, 2009 ($329,510.48), (ii) Dr. Lee Johnson,~~ the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, from February 1, 2009 through December 12, 2009 ($329,510.48), and (iii) Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, ~~Corporate Secretary and a Director from July 8~~Asia, ~~2009~~for ~~to January 9, 2010 (~~$9,~~645.97)~~000; ~~under~~the ~~their~~promissory ~~respective~~note ~~employment~~is ~~agreements~~due ~~with~~March ~~the~~12, ~~Company~~2010 (~~the~~see ~~“March~~Note ~~Officer Debentures”~~11). ~~The~~Interest ~~convertible~~accrues ~~debentures~~monthly ~~have~~at a ~~three~~rate ~~year~~of ~~term and are due March 12, 2013. Interest accrues at~~ Ten Percent (10%) per annum ~~and is due quarterly. The debentures convert, in whole or in part, at the option of each individual noteholder~~ (the “~~March~~Ung ~~Officer~~Third ~~Investors~~Loan”) ~~into restricted shares of the Company’s Common Stock at $0~~.20 Proceeds ~~per~~were ~~share;~~used ~~representing~~to afund ~~beneficial~~general ~~conversion feature~~operations. InOn ~~addition, the~~ March Officer Investor received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 100% of the number of shares issuable pursuant to conversion of the debenture for an aggregate of 3,~~346,336~~ ~~restricted shares. The detachable warrants have an exercise price of $0.30 per share~~2010, a term of three years from the date of issuance, and vest upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. In the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price below the Conversion Price then the Conversion Price shall be subject to a BBWA adjustment, as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $~~300~~9,900; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the March Officer Debentures (three years). On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.19 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was ~~calculated~~repaid ~~to be $35,193~~ on ~~August 18, 2011 in accordance with Codification topic 470-20;~~ the ~~Company~~Ung ~~recorded~~Third ~~this amount as debt discount with a corresponding credit to additional paid-in capital~~Loan. ~~The~~At ~~Company~~January ~~has accrued interest, from inception, of $109,551 at October~~ 31, ~~2011. As of October 31~~2012, ~~2011~~ the ~~unamortized debt discount was $168,566. On December 5, 2011, pursuant to the terms of the Asher First Debenture the~~ Company ~~issued~~owes ~~333,333 shares of the Company’s Common Stock at a conversion price of~~ $~~0.024~~57 ~~per share (the “Asher First Conversion”). Accordingly, the Conversion Price~~ of ~~the~~accrued ~~March~~interest ~~Debentures~~on ~~is reduced to $0.18 per share consistent with~~ the ~~BBWA,~~Ung asThird ~~defined~~Loan. ~~The additional beneficial conversion feature was calculated to be $37,148 on December 5, 2011 in accordance with Codification topic 470-20.~~

On ~~April~~March 1612, 2010, inthe aCompany ~~private~~converted ~~assignment~~an aggregate of a $50668,~~000~~667 ~~March~~of ~~Debenture~~unpaid ~~(see~~salaries ~~Convertible~~and ~~Notes~~accrued ~~10)~~interest anowed ~~aggregate~~to ofits ~~$10~~three officers into convertible debentures due in three years offered by the Company,~~000~~ ~~was~~which ~~assigned~~offering toclosed ~~Ms.~~on ~~Tran~~March ~~Lee~~12, ~~Johnson~~2010 (~~$5,000)~~see ~~and~~Note Ms10). The ~~Lee~~set ~~Tran~~of ~~Johnson~~three (~~$5,000~~3) convertible debentures, ~~both~~with athe ~~related~~same ~~party. Ms.~~terms ~~Tran~~and ~~Lee~~conditions ~~Johnson~~as the March Debentures, were issued in satisfaction of unpaid accrued salary and ~~Ms.~~interest ~~Lee~~for ~~Tran~~(i) Mr. Thomas Johnson, ~~are~~the Company’s Chief Executive Officer and Chairman of the ~~daughters~~Board of Directors from February 1, 2009 through December 12, 2009 ($329,510.48), (ii) Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, from February 1, 2009 through December 12, 2009 ($329,510. ~~The~~48), ~~two~~and (iii) Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director from July 8, 2009 to January 9, 2010 ($59,~~000~~645.97) ~~assigned~~under their respective employment agreements with the Company (the “March Officer Debentures”). The convertible debentures have a three year term and are due March 12, ~~unamortized~~2013. Interest ~~debt~~accrues ~~discount~~at Ten Percent (10%) per annum and ~~accrued~~is ~~interest~~due quarterly. The debentures convert, in whole or in part, at the option of each individual noteholder (the “March Officer Investors”) into restricted shares of the Company’s Common Stock at $0.20 per share; representing a beneficial conversion feature. In addition, the March Officer Investor received a detachable warrant for restricted shares of the Company’s Common Stock; the number of shares of each warrant is equal to 100% of the number of shares issuable pursuant to conversion of the debenture for an aggregate of 3,346,336 restricted shares. The detachable warrants have ~~been~~an ~~reclassified~~exercise asprice of $0.30 per share, a ~~related~~term ~~party~~of ~~obligation~~three years from ~~Convertible~~the ~~Notes~~date 10of issuance, and ~~are~~vest ~~included~~upon inthe ~~Convertible~~conversion ~~Notes~~of 11the debenture with a partial debenture conversion vesting a proportional number of warrant shares. In the event the Company issues common stock (or securities exercisable for or convertible into or exchangeable for common stock) at a price below the “Conversion Price then the Conversion Price shall be subject to a BBWA adjustment, as defined. The fair value of the beneficial conversion feature, calculated in accordance with Codification topic 470-20, is $300,900; excluding the unvested detachable warrants. The beneficial conversion feature is recorded as debt discount with a corresponding credit to additional paid-in capital and is amortized over the life of the March Officer Debentures” (three years). On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.19 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $~~526~~35,193 on August 18, 2011 in accordance with Codification topic 470-20; the Company recorded this amount as debt discount with a corresponding credit to additional paid-in capital. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.18 per share consistent with the BBWA, as defined. On January 24, 2012, the Company issued a convertible debentures (see Convertible Note15) which at the option of the holder converts into restricted shares of the Company’s Common Stock at $0.05 per share (the “Galaxy Debenture”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.178 per share, consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $37,148 and $7,513 on December 5, 2011 and January 24, 2012, respectively, in accordance with Codification topic 470-20. The Company has accrued interest, from inception, of $1126,~~543~~406 at ~~October~~January 31, ~~2011~~2012. As of ~~October~~January 31, ~~2011~~2012 the unamortized debt discount was $2180,~~606~~119. On ~~December~~January 531, ~~2011~~2012, the Company owes $614,954 on the March Officer Debentures. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~533,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the March Officer Debentures is reduced to $0.18174 per share consistent with the BBWA, as defined. The additional beneficial conversion feature was calculated to be $~~556~~7,598 and $7,686 on ~~December~~February 51 and 17, ~~2011~~2012, respectively, in accordance with Codification topic 470-20.

5561

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On ~~May~~April 1916, 2010, ~~the~~in ~~Hi-Tek~~a ~~Trademark~~private ~~Loan~~assignment ~~was~~of ~~amended~~a to$50,000 ~~extend~~March ~~the~~Debenture ~~due~~(see ~~date~~Convertible toNotes ~~December~~10) ~~31,~~an ~~2010~~aggregate ~~and~~of ~~split~~$10,000 ~~the~~was ~~note~~assigned into ~~two~~Ms. ~~separate~~Tran ~~convertible~~Lee ~~notes~~Johnson (~~see~~$5,000) ~~Note~~and ~~10)~~Ms. ~~The~~ ~~first~~Lee ~~note~~Tran ~~for~~Johnson ($~~200~~5,000), ~~includes~~both a ~~new~~related ~~provision~~party. Ms. ~~for~~Tran ~~the~~Lee ~~monthly~~Johnson ~~payment~~and ofMs. ~~interest~~Lee ~~effective~~Tran ~~July~~Johnson 1,are ~~2010~~the indaughters ~~arrears,~~of ~~there~~Dr. ~~were~~Lee noJohnson, ~~other change to~~ the ~~terms~~Company’s ofPresident, ~~the~~Chief ~~original~~Technology ~~note~~Officer, orChief ~~the~~Financial ~~conversion~~Officer ~~feature~~and ~~(“Hi-Tek~~a ~~Trademark Loan One”)~~Director. The ~~second~~two ~~note~~$5,000 ~~for~~assigned ~~$314~~March Debentures,~~968~~ ~~did~~unamortized ~~not~~debt ~~change~~discount ~~the~~and accrued interest ~~accrual~~have orbeen ~~payment~~reclassified ~~terms;~~as ~~there~~a ~~were~~related noparty ~~other~~obligation ~~change~~from toConvertible ~~the~~Notes ~~terms~~10 ofand ~~the~~are ~~original~~included ~~note~~in orConvertible ~~the~~Notes ~~conversion~~11 ~~feature~~ (the “~~Hi-Tek~~March ~~Trademark~~Officer ~~Loan Two~~Debentures”). ~~Also~~On onAugust ~~May 19~~18, ~~2010~~2011, ~~Hi-Tek~~the ~~Private~~Company ~~assigned~~issued ~~the~~a ~~Hi-Tek~~promissory ~~Trademark~~note ~~Loan~~(see ~~One~~Term toNote ~~Mr.~~34) ~~Howard~~which ~~Johnson,~~included a ~~related~~warrant ~~party. Mr.~~for ~~Johnson~~1,300,000 isrestricted ~~the~~shares ~~father~~ of ~~Mr. Thomas Johnson,~~ the Company’s ~~Chief~~Common ~~Executive~~Stock ~~Officer~~exercisable ~~and~~at ~~Chairman~~$0.10 ofper share (the ~~Board~~“Galaxy ~~of Directors and Dr~~3rd. ~~Lee Johnson~~Loan”). Accordingly, the ~~Company’s~~Conversion ~~President,~~Price ~~Chief~~of ~~Technology~~the March Officer, ~~Chief~~Debentures ~~Financial~~is ~~Officer~~reduced ~~and~~to ~~a Director~~$0. On19 ~~December~~per 28share, ~~2010,~~consistent with the ~~Hi-Tek~~BBWA, ~~Trademark~~as ~~Loan~~defined. The ~~One~~additional ~~was~~beneficial ~~amended~~conversion tofeature ~~extend~~was ~~the~~calculated ~~due~~to ~~date~~be to$526 ~~June~~on 30August 18, 2011, ~~with~~in noaccordance ~~other~~with ~~change~~Codification totopic 470-20; the ~~terms~~Company ofrecorded ~~the~~this ~~note~~amount oras ~~the~~debt ~~conversion~~discount ~~feature~~with a corresponding credit to additional paid-in capital. ~~Additionally,~~On onDecember ~~June 29~~5, 2011, ~~the~~pursuant ~~Hi-Tek~~to ~~Trademark~~the ~~Loan~~terms ~~One~~of ~~was~~the ~~further~~Asher ~~amended~~First toDebenture ~~extend~~ the ~~due~~Company ~~date~~issued to333,333 ~~December~~shares ~~31,~~of ~~2011,~~the ~~with~~Company’s noCommon ~~other~~Stock ~~change~~at toa ~~the~~conversion ~~terms~~price of ~~the~~$0.024 ~~note~~per orshare (the ~~conversion~~“Asher ~~feature~~First Conversion”). InAccordingly, ~~accordance~~the ~~with~~Conversion ~~Codification~~Price ~~topic~~of ~~470-20,~~the ~~there~~March isOfficer noDebentures ~~beneficial~~is ~~conversion~~reduced ~~feature~~to at$0.18 ~~the~~per ~~time~~share ofconsistent with the ~~extensions~~BBWA, as defined. On ~~August~~January 1824, ~~2011~~2012, the Company issued a ~~promissory~~convertible ~~note~~debentures (see ~~Term~~Convertible ~~Note 34~~Note15) which ~~included~~at athe ~~warrant~~option ~~for~~of ~~1,300,000~~the holder converts into restricted shares of the Company’s Common Stock ~~exercisable~~ at $0.1005 per share (the “Galaxy ~~3rd. Loan~~Debenture”). Accordingly, the Conversion Price of the ~~Hi-Tek~~March ~~Trademark~~Officer ~~Loan~~Debentures ~~One~~ is reduced to $0.10178 per share, consistent with the ~~Galaxy~~BBWA, ~~3rd.~~as ~~Loan~~defined. The additional beneficial conversion feature was calculated to be ~~zero~~$556 and $1113 on ~~August~~December 185, 2011 and January 24, 2012, respectively, in accordance with Codification topic 470-20. The Company has accrued interest, from inception, of $1,~~713~~795 ~~and~~at January 31, 2012. As of January 31, 2012 the unamortized debt discount was ~~zero~~$2,696. On onJanuary ~~the~~31, ~~Hi-Tek~~2012, ~~Trademark~~the ~~Loan~~Company ~~One~~owes $9,099 ~~held~~on bythese Mrtwo assigned debentures. On ~~Howard~~February ~~Johnson~~1, as2012, pursuant to the terms of ~~October~~the 31Asher First Debenture the Company issued 533,333 ~~2011~~shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On ~~December~~February 517, ~~2011~~2012, pursuant to the terms of the Asher First Debenture the Company issued ~~333~~833,333 shares of the Company’s Common Stock at a conversion price of $0.~~024~~012 per share (the “Asher ~~First~~Third Conversion”). Accordingly, the Conversion Price of the ~~Hi-Tek~~March ~~Trademark~~Officer ~~Loan~~Debentures ~~One~~ is reduced to $0.~~024~~174 per share consistent with the ~~Asher~~BBWA, ~~First~~as ~~Conversion~~defined. The additional beneficial conversion feature was calculated to be ~~zero~~$114 onand ~~December~~$115on 5February 1 and 17, ~~2011~~2012, respectively, in accordance with Codification topic 470-20.

On ~~August~~May 3019, 2010, the ~~Company~~Hi-Tek ~~executed~~Trademark aLoan was amended to extend the due date to December 31, 2010 and split the note ~~with~~in ~~Mr.~~two ~~Louis~~separate Pconvertible notes (see Note 10). The ~~Huynh~~first note for $200,000 ~~formerly~~includes a new provision for the ~~Company’s~~monthly ~~General~~payment ~~Counsel~~of interest effective July 1, ~~Executive~~2010 ~~Vice~~in ~~President~~arrears, there were no other change to the terms of ~~Operations~~the ~~and~~original ~~Business~~note ~~Development,~~or ~~Corporate~~the ~~Secretary~~conversion ~~and~~feature a(“Hi-Tek ~~Director,~~Trademark Loan One”). The second note for $20314,~~500~~968 did not change the interest accrual or payment terms; there were no other change to the ~~promissory~~terms ~~note~~of ~~was~~the ~~due~~original ~~September~~note ~~30,~~or ~~2010~~the conversion feature (~~see~~“Hi-Tek ~~Note~~Trademark 11Loan Two”). ~~Interest~~Also ~~accrues~~on ~~monthly~~May at19, 2010, Hi-Tek Private assigned the Hi-Tek Trademark Loan One to Mr. Howard Johnson, a ~~rate~~related party. Mr. Johnson is the father of ~~Ten~~Mr. ~~Percent~~Thomas ~~(10%)~~Johnson, ~~per~~the ~~annum~~Company’s (Chief Executive Officer and Chairman of the ~~“Huynh~~Board ~~Loan”)~~of Directors and Dr. ~~Proceeds~~ ~~were~~Lee ~~used~~Johnson, tothe ~~fund~~Company’s ~~general~~President, ~~operations~~Chief Technology Officer, Chief Financial Officer and a Director. On ~~September~~December 3028, 2010, the ~~Huynh~~Hi-Tek Trademark Loan One was amended to extend the due date to ~~December~~June 3130, ~~2010~~2011, with no other change to the terms of the note or the conversion feature. On ~~December~~June 1329, ~~2010~~2011, the ~~Huynh~~Hi-Tek Trademark Loan One was further amended to extend the due date to ~~September~~December 3031, 2011, with no other change to the terms of the note or the conversion feature. Additionally, on ~~September~~December 29, 2011, the ~~Huynh~~Hi-Tek Trademark Loan One was further amended to extend the due date to ~~March~~July 3120, 2012, with no other change to the terms of the note or the conversion feature. In accordance with Codification topic 470-20, there is no beneficial conversion feature at the time of the three extensions. On August 18, 2011, the Company issued a promissory note (see Term Note 34) which included a warrant for 1,300,000 restricted shares of the Company’s Common Stock exercisable at $0.10 per share (the “Galaxy 3rd. Loan”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.10 per share consistent with the Galaxy 3rd. Loan. On December 5, 2011, pursuant to the terms of the Asher First Debenture the Company issued 333,333 shares of the Company’s Common Stock at a conversion price of $0.024 per share (the “Asher First Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.024 per share consistent with the Asher First Conversion. The additional beneficial conversion feature was calculated to be zero on August 18 and December 5, 2011 in accordance with Codification topic 470-20. The Company has accrued interest of $1,713 and unamortized debt discount was zero on the Hi-Tek Trademark Loan One, held by Mr. Howard Johnson, as of January 31, 2012. On January 31, 2012, the Company owes $201,713 to Mr. Howard Johnson. On February 1, 2012, pursuant to the terms of the Asher First Debenture the Company issued 533,333 shares of the Company’s Common Stock at a conversion price of $0.015 per share (the “Asher Second Conversion”). On February 17, 2012, pursuant to the terms of the Asher First Debenture the Company issued 833,333 shares of the Company’s Common Stock at a conversion price of $0.012 per share (the “Asher Third Conversion”). Accordingly, the Conversion Price of the Hi-Tek Trademark Loan One is reduced to $0.012 per share consistent with the Asher Third Conversion. The additional beneficial conversion feature was calculated to be zero on February 1 and 17 and March 8, 2012 in accordance with Codification topic 470-20.

56Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On ~~September~~August 1730, 2010, the Company executed a note with MsMr. ~~Ngoc~~Louis ~~Anh~~P. ~~Ung~~Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, ~~Asia~~Corporate Secretary and a Director, for $1520,~~000~~500; the promissory note was due ~~December~~September 1730, 2010 (see Note 11). Interest accrues monthly at a rate of Ten Percent (10%) per annum (the “~~Ung~~Huynh ~~Fourth~~ Loan”). Proceeds were used to fund general operations. On September 30, 2010, the Huynh Loan was amended to extend the due date to December 31, 2010 with no other change to the terms. On December 13, 2010, the ~~Ung~~Huynh ~~Fourth~~ Loan was amended to extend the due date to September 30, 2011 with no other change to the terms. Additionally, on September 29, 2011, the ~~Ung~~Huynh ~~Fourth~~ Loan was further amended to extend the due date to March 31, 2012 with no other change to the terms. On January 31, 2012, the Company owes $23,618 on the Huynh Loan.

On ~~November~~August 330, 2010, the Company executed a note with MsMr. ~~Ngoc~~Thomas ~~Anh Ung~~Johnson, the Company’s ~~Vice~~Chief ~~President~~Executive ofOfficer ~~Operations~~ and ~~Business~~Chairman ~~Development,~~of ~~Asia,~~the ~~for~~Board ~~288~~of Directors,~~008,000đ~~ ~~(equivalent~~for to $1430,~~800)~~000; the ~~revolving~~promissory ~~credit~~note ~~agreement~~was is due ~~August~~November 330, ~~2011~~2010 (see Note 11). Interest accrues monthly at a rate of ~~Twelve~~Ten Percent (1210%) per annum (the “~~Ung~~Thomas ~~Revolver~~Fourth Loan”). Proceeds were used to fund general operations ~~in Vietnam~~. ~~The~~On ~~Company~~November ~~borrowed an additional 389~~10,~~200,000đ~~ ~~(equivalent to $20~~2010,~~000),~~ ~~583,800,000đ~~the ~~(equivalent~~Thomas toFourth ~~$30,000),~~Loan ~~194,800,000đ~~was ~~(equivalent~~amended to ~~$10,000),~~extend ~~194,800,000đ~~the ~~(equivalent~~due todate ~~$10,000), 116,940,000đ (equivalent~~ to ~~$6,000),~~December ~~200~~31,~~000,000đ~~ ~~(equivalent~~2010 towith ~~$10,257),~~no ~~50,000,000đ~~other ~~(equivalent~~change to ~~$2,439),~~the ~~100,000,000đ~~terms. On ~~(equivalent~~December ~~to $4~~13,~~878),~~ 502010,~~000,000đ~~ ~~(equivalent~~the toThomas ~~$2,439),~~Fourth ~~100,000,000đ~~Loan ~~(equivalent~~was amended to ~~$4,878),~~extend ~~100,000,000đ~~the ~~(equivalent~~due date to ~~$4,878),~~September ~~200~~30,~~00,000đ~~ ~~(equivalent~~2011 towith ~~$9,756),~~no ~~200,00,000đ~~other ~~(equivalent~~change to ~~$9,756),~~the ~~100~~terms. Additionally,~~00,000đ~~ ~~(equivalent~~on toSeptember $429,~~878),~~ 732011,~~00,000đ~~ ~~(equivalent~~the toThomas ~~$3,561)~~Fourth ~~and~~Loan ~~30,000,000đ~~was ~~(equivalent~~further amended to ~~$1,422)~~extend ~~from Ms. Ung under~~ the ~~Ung~~due ~~Revolver~~date onto ~~November~~March 1831, ~~December~~2012 2,with ~~and~~no ~~December~~other ~~22,~~change ~~2010,~~to ~~January~~the 7,terms. On ~~January~~November 1723, ~~January 27~~2011, ~~March~~the 7,Company ~~April~~made 7,a ~~April~~partial 9,payment ~~April~~of 14$1,500 ~~April~~on ~~19,~~the ~~April~~Thomas ~~20,~~Fourth ~~June~~Loan ~~27,~~applied ~~July~~to 5,accrued ~~July~~interest. On 14November ~~and October 25~~28, 2011 ~~respectively. In addition~~, the Company ~~borrowed~~made ~~additional~~a ~~funds~~partial ~~advanced~~payment ~~in U.S. currency~~ of $~~10,000, $~~1,~~000,~~500 ~~$9,000,~~on ~~$9,000,~~the ~~$9,000~~Thomas ~~and~~Fourth ~~$15,000~~Loan onapplied ~~January~~to 4,accrued ~~January~~interest. On ~~18,~~December ~~January 26~~5, ~~May 10~~2011, ~~July~~the 15Company ~~and~~made ~~August~~a ~~16,~~partial ~~2011,~~payment ~~respectively. An aggregate~~ of $311,~~173~~000 ~~and~~on ~~$48,086~~the ~~was~~Thomas ~~repaid~~Fourth onLoan ~~the~~applied ~~Ung~~to ~~Revolver~~accrued ininterest. On ~~San~~December ~~Diego~~9, ~~California~~2011, ~~during~~ the ~~six~~Company ~~months~~made ~~ended~~a ~~October~~payment ~~31,~~of ~~2011~~$57 ~~and~~on the ~~year~~Thomas ~~ended~~Fourth ~~April~~Loan ~~30,~~applied ~~2011,~~to ~~respectively~~accrued interest. ~~Additionally,~~On ~~the~~January ~~Company borrowed an additional $5~~30,~~000,~~ ~~130~~2012,~~000,000đ~~ ~~(equivalent~~the toCompany ~~$6,100),~~made ~~$9,000~~a ~~and~~payment ~~63,000,000đ~~of ~~(equivalent to~~ $~~3,000)~~438 ~~under~~on the ~~Ung~~Thomas ~~Revolver~~Second onLoan ~~November~~applied 1,to ~~November~~accrued 4,interest. On ~~December~~January 1431, ~~and~~2012, ~~December~~the ~~15,~~Company ~~2011,~~owes ~~respectively. Further~~$30,000 on ~~November~~the ~~23,~~Thomas ~~December~~Fourth 12Loan. On ~~and~~February ~~December 13~~22, ~~2011~~2012, the Company ~~repaid~~made ~~$5,000,~~an ~~$3,045~~aggregate ~~and~~payment of $~~3,000~~238 on the ~~Ung~~Thomas ~~Revolver,~~Fourth ~~respectively~~Loan applied to accrued interest.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

15. Related party transactions (continued)

Other Agreements (continued)

On November 3, 2010, the Company executed a note with Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, for 288,008,000đ (equivalent to $14,800); the revolving credit agreement is due August 3, 2011 (see Note 11). Interest accrues monthly at a rate of Twelve Percent (12%) per annum (the “Ung Revolver”). Proceeds were used to fund general operations in Vietnam. The Company borrowed an additional 389,200,000đ (equivalent to $20,000), 583,800,000đ (equivalent to $30,000), 194,800,000đ (equivalent to $10,000), 194,800,000đ (equivalent to $10,000), 116,940,000đ (equivalent to $6,000), 200,000,000đ (equivalent to $10,257), 50,000,000đ (equivalent to $2,439), 100,000,000đ (equivalent to $4,878), 50,000,000đ (equivalent to $2,439), 100,000,000đ (equivalent to $4,878), 100,000,000đ (equivalent to $4,878), 200,00,000đ (equivalent to $9,756), 200,00,000đ (equivalent to $9,756), 100,00,000đ (equivalent to $4,878), 73,00,000đ (equivalent to $3,561), 30,000,000đ (equivalent to $1,422), 120,600,000đ (equivalent to $5,660), 130,000,000đ (equivalent to $6,119), 63,000,000đ (equivalent to $3,100) and 42,000,000đ (equivalent to $1,980) from Ms. Ung under the Ung Revolver on November 18, December 2, and December 22, 2010, January 7, January 17, January 27, March 7, April 7, April 9, April 14, April 19, April 20, June 27, July 5, July 14, October 25, November 1, November 4, December 15, December 23, 2011 respectively. In addition, the Company borrowed additional funds advanced in U.S. currency of $10,000, $1,000, $9,000, $9,000, $9,000, $15,000, $9,000, $3,000 and $5,000 on January 4, January 18, January 26, May 10, July 15, August 16, December 14, 2011, January 4 and January 12, 2012, respectively. An aggregate of $48,677 and $48,086 was repaid on the Ung Revolver in San Diego, California during the nine months ended January 31, 2012 and the year ended April 30, 2011, respectively. On January 31, 2012, the Company owes $157,027 on the Ung Revolver. Additionally, the Company borrowed an additional $5,000 under the Ung Revolver on February 22, 2012. Further, on February 13 and March 6, 2012, the Company repaid $1,077 and $8,000 on the Ung Revolver, respectively.

On December 15, 2010, the Company issued to Mr. Louis P. Huynh, formerly the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director, and to Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia, 15,000 shares and 15,000 shares of the Company’s restricted common stock as a compensation for past services with a fair value of approximately $2,550 and $2,550, respectively.

On March 16, 2011, the Company issued 4,545,455 shares of the Company’s common stock to Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors, pursuant to the terms of the TJ Fourth Note; Mr. Thomas Johnson exercised his right to convert $1,000,000, a portion of the funds owed to him under the TJ Fourth Note, into common stock of the Company at $0.22 per share.

Also on March 16, 2011, the Company issued 6,818,182 shares of the Company’s common stock to Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director, pursuant to the terms of the LJ Fourth Note; Dr. Lee Johnson exercised his right to convert $1,500,000, a portion of the funds owed to him under the LJ Fourth Note, into common stock of the Company at $0.22 per share.

57On October 4, 2011, Mr. Huynh, the Company’s General Counsel, Executive Vice President of Operations and Business Development, Corporate Secretary and a Director notified management and the Board of Directors that he is resigning as the Company’s General Counsel, Executive Vice President of Operations and Business Development and Corporate Secretary to become a consultant for Dot VN providing Operations and Business Development Services. On October 4, 2011, Mr. Huynh and the Company executed a consulting agreement (the “Huynh Consulting Agreement”) pursuant to which Mr. Huynh (the “Consultant”) will be entitled to a fee of $8,500 per month as well as any performance bonuses in cash and stock as may be approved by the Company from time to time. Additionally, Company affirms and (to the extent necessary) extends the term of all vested stock options held by Consultant through the original expiration dates of such options. The Huynh Consulting Agreement has a term of three (3) years. On January 13, 2012, Mr. Louis P. Huynh a director of the Company tendered his resignation as a director of the Company effective immediately. Mr. Huynh will continue to provide part-time services to the Company under his October 4, 2011consulting agreement.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

15. Related party transactions (continued)

Other Agreements (continued)

On ~~October~~January 4, ~~2011~~2012, Mrthe Company and 100% of those individuals holding outstanding stock options agreed to cancel all such outstanding stock options in exchange for a new grant of a like number of stock options. New ~~Huynh~~incentive stock options, as defined by U.S. treasury regulations, were granted under the Dot VN, Inc. 2009 Stock Option Plan (the “Option Plan”) to purchase an aggregate of 12,375,000 shares of the Company’s ~~General~~Common ~~Counsel,~~Stock ~~Executive~~(the ~~Vice~~“ISO ~~President~~Options”) ofto ~~Operations~~Dr. ~~and~~Lee ~~Business~~Johnson, ~~Development~~the Company’s President, ~~Corporate~~Chief ~~Secretary~~Technology Officer, Chief Financial Officer and a Director ~~notified~~(6,000,000 ~~management~~shares), Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors ~~that~~(6,000,000 heshares) isand ~~resigning~~Ms. asNgoc Anh Ung, the Company’s ~~General Counsel, Executive~~ Vice President of Operations and Business Development, ~~and~~Asia ~~Corporate~~(375,000 ~~Secretary~~shares). The toISO ~~become~~Options ahave ~~consultant~~an ~~for~~exercise ~~Dot~~price VNof ~~providing~~$0.05, ~~Operations~~a ~~and~~Twenty-Five ~~Business~~Percent ~~Development~~(25%) ~~Services. On~~premium ~~October~~to 4,the ~~2011~~closing market price, ~~Mr.~~vest ~~Huynh~~one third at the date of grant and one third at the ~~Company~~end ~~executed~~of athe ~~consulting~~first ~~agreement~~and (second year from the ~~“Huynh~~date ~~Consulting~~of ~~Agreement”~~grant and expire five years (12,000,000 shares) ~~pursuant~~for to10% ~~which~~shareholders ~~Mr.~~and ~~Huynh~~ten years (~~the~~375,000 ~~“Consultant”~~shares) ~~will~~for beMs. ~~entitled~~Ung tofrom athe ~~fee~~date of ~~$8,500~~grant. The ~~per~~remaining ~~month~~exchange asoptions ~~well~~issued as ~~any~~non-qualified ~~performance~~stock ~~bonuses~~options inwere ~~cash~~granted ~~and~~outside ~~stock~~of asthe ~~may~~Option bePlan ~~approved~~for byan aggregate of 6,000,000 shares of the Company’s ~~from~~Common ~~time~~Stock (the “Non-Qualified Options”) to ~~time~~Dr. Lee Johnson (3,000,000 shares) and Mr. Thomas Johnson (3,000,000 shares). ~~Additionally~~The Non-Qualified Options have an exercise price of $0.05, ~~Company~~a ~~affirms~~Twenty-Five ~~and~~Percent (25%) premium to the ~~extent~~closing ~~necessary)~~market ~~extends~~price, vest one third at the ~~term~~date of ~~all~~grant ~~vested~~and ~~stock~~one ~~options~~third ~~held~~at bythe ~~Consultant~~end ~~through~~of the ~~original~~first ~~expiration~~and ~~dates~~second year from the date of ~~such~~grant ~~options~~and expire ten years from the date of grant. The ~~Huynh~~Company ~~Consulting~~has ~~Agreement~~recorded ~~has~~Option abonus ~~term~~expense relating to these options of ~~three~~$15,545 ~~(3)~~for ~~years. Mr.~~the ~~Huynh~~nine ~~will~~months ~~continue~~ended toJanuary ~~serve~~31, on2012, ~~our~~in ~~Board~~accordance ofwith ~~Directors~~Codification topic 718 (see Note 16).

Additionally, on January 4, 2012, the Company granted new stock options to purchase an aggregate of 4,800,000 shares of the Company’s Common Stock to Dr. Lee Johnson, the Company’s President, Chief Technology Officer, Chief Financial Officer and a Director (3,000,000 shares), Mr. Thomas Johnson, the Company’s Chief Executive Officer and Chairman of the Board of Directors (1,200,000 shares) and Ms. Ngoc Anh Ung, the Company’s Vice President of Operations and Business Development, Asia (600,000 shares). The options have an exercise price of $0.05, a Twenty-Five Percent (25%) premium to the closing market price, vest one third at the date of grant and one third at the end of the first and second year from the date of grant. The Ms. Ung option for 600,000 shares was issued under the Option Plan as incentive stock options, as defined by U.S. treasury regulations, and expire ten years from the date of grant. An aggregate of 4,200,000 shares are issued as non-qualified stock options outside of the Option Plan and expire ten years from the date of grant. The Company has recorded Option bonus expense relating to these options of $80,634 for the nine months ended January 31, 2012, in accordance with Codification topic 718 (see Note 16).

16. Warrants, options and stock based compensation

On October 9, 2006, the Company issued options to purchase an aggregate of 7,650,000 restricted shares of the Company’s Common Stock with an estimated fair value of $19,886,786 to three officers (see Note 15) and an employee. The options ~~have~~had an exercise price of $0.50 per share, vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years the date of vesting. ~~As of October 31, 2011, 7,650,000 options have vested and no options were exercised.~~ Compensation cost, using the graded vesting attribute method in accordance with Codification topic 718, is recognized over the requisite service period during which each tranche (one third) of shares is earned (zero, one, and two years). The value of each tranche is amortized on a straight-line basis; zero was expensed during the quarter ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011. On January 4, 2012, the Company and 100% of those individuals holding outstanding stock options agreed to cancel all such outstanding stock options in exchange for a new grant of a like number of stock options.

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 212.1%; risk-free interest rate of 4.70%; contractual life of ten years; and a closing market price of $2.60. Expected volatility is calculated based on the historic Friday stock market closing price from the first week the Company was publically traded over the counter on the Pink Sheets to the date of grant, a seventy-three week period, in accordance with Codification topic 718 implementation guidance.65

OnDot ~~January 31 and February 9~~VN, 2007, in connection with the February Financing (see Note 10), the Company issued detachable warrants to the investors exercisable into an aggregate of 344,465 restricted shares of the Company’s Common Stock at a per share price of $2INC.~~00,~~ ~~with~~AND an estimated fair value of $901,632. The warrants have a term of five years from the date of issuance. The combined fair value of the warrants and the associated beneficial conversation feature of the Convertible Debentures are limited to the proceeds of the debt; $259,954 was allocated to the warrants. These warrants have been recorded as a discount against the Convertible Debentures and will be amortized to interest expense over the term of the debt (generally two years) or upon the earlier conversion of the debt; there is no unamortized balance at October 31, 2011. As of October 31, 2011, no warrants were exercised.SUBSIDIARIES

Additionally, pursuant to its engagement of Pali Capital, Inc., the Company’s placement agent in the February Financing, the Company issued three series of warrants: (i) retainer warrants on January 31, 2007 totaling in the aggregate 250,000 restricted shares exercisable at a per share price of $0.001, with an estimated fair value of $712,404; (ii) placement warrants A on February 9, 2007 totaling in the aggregate 229,600 restricted shares exercisable at a per share price of $1.00, with an estimated fair value of $563,640; and (iii) placement warrants B on February 9, 2007 totaling in the aggregate 68,880 restricted shares exercisable at a per share price of $2.00, with an estimated fair value of $167,700 (collectively the “Placement Agent Warrants”). The Placement Agent Warrants have a term of five years from the date of issuance. The retainer warrants were expensed over the one year engagement term and the two placement warrants were expensed over the two year term of the February Financing or upon the earlier election to exercise; there is no unamortized balance of the retainer warrants or the two placement warrants at October 31, 2011. As of October 31, 2011, an aggregate of 73,750 $0.001 Pali Retainer Warrants and 42,180 $1.00 Pali Placement Warrants A have been exercised. In addition, the Company agreed to register the shares associated with the Placement Agent Warrants in the registration statement required in connection with the February Financing (see Notes 9 and 10).

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

16. Warrants, options and stock based compensation (continued)

On January 31 and February 9, 2007, in connection with the February Financing (see Note 10), the Company issued detachable warrants to the investors exercisable into an aggregate of 344,465 restricted shares of the Company’s Common Stock at a per share price of $2.00, with an estimated fair value of $901,632. The warrants have a term of five years from the date of issuance. The combined fair value of the warrants and the associated beneficial conversation feature of the Convertible Debentures are limited to the proceeds of the debt; $259,954 was allocated to the warrants. These warrants have been recorded as a discount against the Convertible Debentures and will be amortized to interest expense over the term of the debt (generally two years) or upon the earlier conversion of the debt; there is no unamortized balance at January 31, 2012. As of January 31, 2012, no warrants were exercised. On January 31, 2012, an aggregate of 180,000 warrant shares expired unexercised and on February 7, 2012 the remaining (164,465) warrant shares expired unexercised.

Additionally, pursuant to its engagement of Pali Capital, Inc., the Company’s placement agent in the February Financing, the Company issued three series of warrants: (i) retainer warrants on January 31, 2007 totaling in the aggregate 250,000 restricted shares exercisable at a per share price of $0.001, with an estimated fair value of $712,404; (ii) placement warrants A on February 9, 2007 totaling in the aggregate 229,600 restricted shares exercisable at a per share price of $1.00, with an estimated fair value of $563,640; and (iii) placement warrants B on February 9, 2007 totaling in the aggregate 68,880 restricted shares exercisable at a per share price of $2.00, with an estimated fair value of $167,700 for an aggregate of 548,480 warrant shares (collectively the “Placement Agent Warrants”). The Placement Agent Warrants have a term of five years from the date of issuance. The retainer warrants were expensed over the one year engagement term and the two placement warrants were expensed over the two year term of the February Financing or upon the earlier election to exercise; there is no unamortized balance of the retainer warrants or the two placement warrants at January 31, 2012. As of January 31, 2012, an aggregate of 209,100 $0.001 Pali Retainer Warrants and 42,180 $1.00 Pali Placement Warrants A have been exercised. On January 31, 2012, the remaining retainer warrants shares (40,900) expired unexercised and on February 7, 2012 the remaining two placement warrants shares (256,300) expired unexercised In addition, the Company agreed to register the shares associated with the Placement Agent Warrants in the registration statement required in connection with the February Financing (see Notes 9 and 10).

The fair value of these options was estimated at January 31 and February 9, 2007 (the dates of grant) using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 192.8% and 190.7%; risk-free interest rate of 4.82% and 4.78%; contractual life of five years; and a closing market price of $2.85 and $2.50; respectively. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding eighty-nine and ninety-one week periods (from Pink Sheet inception).

The Company issued a series of six monthly warrants exercisable into 40,000 restricted shares of the Company’s Common Stock on July 5, August 5, September 5, October 5, November 5, and December 5, 2007 for an aggregate of 240,000 restricted shares to Double Barrel, LLC for monthly performance of services, with an estimated fair value of $73,086, $58,021, $66,771, $77,954, $67,900, and $63,845 respectively. Each warrant is exercisable at $1.50 per share and expires three years from the date of grant. The warrants are earned in the month of grant and the fair value is expensed in the month. The series of six warrants expired unexercised on July 5, August 5, September 5, and October 5, November 5, and December 5, 2010, respectively. As of October 31, 2011, there are no warrants outstanding.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

16. Warrants, options and stock based compensation (continued)

The Company issued a series of six monthly warrants exercisable into 40,000 restricted shares of the Company’s Common Stock on July 5, August 5, September 5, October 5, November 5, and December 5, 2007 for an aggregate of 240,000 restricted shares to Double Barrel, LLC for monthly performance of services, with an estimated fair value of $73,086, $58,021, $66,771, $77,954, $67,900, and $63,845 respectively. Each warrant is exercisable at $1.50 per share and expires three years from the date of grant. The warrants are earned in the month of grant and the fair value is expensed in the month. The series of six warrants expired unexercised on July 5, August 5, September 5, and October 5, November 5, and December 5, 2010, respectively. As of January 31, 2012, there are no warrants outstanding.

The fair value of these warrants were estimated at the dates of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 188.7%, 184.7%, 181.7%, 179.5%; 176.1%, and 174.9%, risk-free interest rate of 5.00%, 4.45%, 4.05%, 4.16%, 3.71%, and 2.91%; contractual life of three years; and a closing market price of $1.99, $1.61, $1.85, $2.15, $1.90, and $1.80; respectively. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 111 week, 116 week, 120 week, 125 week, 130 week, 133 week periods (from Pink Sheet inception).

On August 7, 2007, the Company issued options to purchase an aggregate of 350,000 restricted shares of the Company’s Common Stock with an estimated fair value of $628,847 to an officer (Louis P. Huynh) and an employee. The options ~~have~~had an exercise price of $1.80 per share, vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years the date of vesting. On January 15, 2009, 150,000 options expired unexercised upon the employee’s termination. ~~As of October 31, 2011, 200,000 options have vested and no options were exercised.~~ Compensation cost, using the graded vesting attribute method in accordance with Codification topic 718, is recognized over the requisite service period during which each tranche (one third) of shares is earned (zero, one, and two years). The value of each tranche is amortized on a straight-line basis; zero was expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011. On January 4, 2012, the Company and Mr. Huynh, the holder of the outstanding stock options, agreed to cancel all such outstanding stock options in exchange for a new grant of a like number of stock options.

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 184.7%; risk-free interest rate of 4.77%; contractual life of ten years; and a closing market price of $1.80. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 116 week period (from Pink Sheet inception).

On September 7, 2007, the Company issued options to purchase 10,000 restricted shares of the Company’s Common Stock with an estimated fair value of $16,400 to an employee. The options ~~have~~had an exercise price of $2.00 per share, vest at the date of grant and expired September 7, 2010, three years the grant date, unexercised. Compensation cost, in accordance with Codification topic 718, was recognized over the requisite service period (date of grant).

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 181.2%; risk-free interest rate of 4.38%; contractual life of three years; and a closing market price of $1.85. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 121 week period (from Pink Sheet inception).

On September 18, 2007, the Company issued a 200,000 share warrant pursuant to the terms of a consulting agreement exercisable into restricted shares of the Company’s Common Stock with an estimated fair value of $275,312 to IR.VN LLC with a three year term and an exercise price of $2.00 per share. The value of the warrants was expensed over the one year term of service. On September 18, 2010 the warrants expired unexercised.

5967

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

16. Warrants, options and stock based compensation (continued)

The fair value of these warrants was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 181.5%; risk-free interest rate of 4.04%; contractual life of three years; and a closing market price of $1.57. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 122 week period (from Pink Sheet inception).

On August 5, 2008, the Company issued options to purchase 75,000 restricted shares of the Company’s Common Stock with an estimated fair value of $75,561 to an employee. The options ~~have~~had an exercise price of $1.80 per share, vest one third at the date of grant and one third on February 14, 2009 and 2010 and expire ten years from the date of vesting. As ~~of October 31, 2011, 75,000 options have vested and no options were exercised.~~ Compensation cost, using the graded vesting attribute method in accordance with Codification topic 718, is recognized over the requisite service period during which each tranche (one third) of shares is earned (zero, seven, and nineteen months). The value of each tranche is amortized on a straight-line basis; zero was expensed during the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011. On January 4, 2012, the Company and the holder of the outstanding stock options agreed to cancel all such outstanding stock options in exchange for a new grant of a like number of stock options.

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 185.1%; risk-free interest rate of 4.04%; contractual life of ten years; and a closing market price of $1.01. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding one hundred and sixty-seven week period (from Pink Sheet inception).

Following the January 31, 2009 maturity of the February Debentures (see Note 10) the Company proposed an extension of the due date and a modification of the terms. Thirteen (13) February Investors (the “Extended Notes”) have agreed to the Company’s proposal (see Note 10) regarding their (i) February Debentures and (ii) accrued, but unpaid, liquidated damages in exchange, in part, for a warrant equal to Twenty Percent (20%) of the combined amount due and owing on the same terms as the detachable warrants issued with the original February Debentures. The series of thirteen (13) warrants ~~expire~~were ~~January 31, 2012 and are~~ exercisable into an aggregate of 36,623 restricted shares of the Company’s Common Stock at a per share price of $2.00, with an estimated fair value of $10,754 capitalized as a deferred charge associated with the issuance of these debt instruments (see Note 9). The deferred charge is amortized on a straight-line basis over the approximate thirty-six month term of the term debt with $12,~~636~~454 and $3,272 expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively. On January 31, 2012, the warrants expired unexercised.

The fair value of these warrants was estimated at March 10, March 13, March 15, March 16, March 18, March 25, April 13,May 4, May 7,and August 25 2009 (the dates of acceptance) using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 188.4%, 187.9%, 187.9%, 187.9%, 187.9%, 204.1%, 210.7%, 209.7%, 209.7%% and 204.5%; risk-free interest rate of 1.46%, 1.36%, 1.39%, 1.39%, 1.14%, 1.35%, 1.27%, 1.40%, 1.46% and 1.56%; contractual life of approximately three years; and a closing market price of $0.50, $0.50, $0.50, $0.50, $1.12, $0.24, $0.25, $0.35, $0.40 and $0.47; respectively. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding one hundred eighty-nine to two hundred twenty two week periods (from Pink Sheet inception).

On April 20 and April 21, 2009, pursuant to the terms of two stock subscription agreements, the Company issued two warrants exercisable into an aggregate of 166,668 restricted shares of the Company’s Common Stock at a per share price of $1.00 expiring two years from the date of issuance. The warrants expired April 20 and April 21, 2011 unexercised.

On April 29, 2009, pursuant to the terms of a stock subscription agreement, the Company issued a warrant exercisable into 110,716 restricted shares of the Company’s Common Stock at a per share price of $1.50 expiring two years from the date of issuance. The warrant expired April 29, 2011 unexercised.

On May 4 and May 15, 2009, pursuant to the terms of four stock subscription agreements, the Company issued four warrants exercisable into an aggregate of 173,278 restricted shares of the Company’s Common Stock at a per share price of $1.50 expiring two years from the date of issuance. The warrants expired May 4 and May 15, 2011 unexercised.68

60Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

16. Warrants, options and stock based compensation (continued)

On June 5 and June 18, 2009, pursuant to the terms of two stock subscription agreements, the Company issued two warrants exercisable into an aggregate of 150,000 restricted shares of the Company’s Common Stock at a per share price of $1.00 expiring two years from the date of issuance. The warrants expired June 5 and June 18, 2011 unexercised.

On July 6, 2009, the Company’s Board of Directors approved the Company’s 2009 Stock Option Plan (the “Option Plan”). The Option Plan is administered by a two (2) or more persons committee appointed by the Board of Directors or the Board of Directors (the “Plan Administrator”) and provides for the issuance of up to twenty-five million shares of the Company’s Common Stock. Under the Option Plan incentive stock options (“ISO”) may be granted to employees of the Company or its subsidiary companies and non-qualified stock options may be granted to employees and non-employees of the Company or its subsidiary companies. Options are exercisable at such times and subject to such terms and conditions as the Plan Administrator determines at the time of grant, except in the case of an ISO for which the exercise price shall not be less than 100% of the fair market value per share at the date of grant or for options granted to a greater-than-ten percent shareholder 110% of the fair market value per share at the date of grant and for a term not to exceed five years. Generally, options vest one third at the date of grant and one third at the end of the first and second year from the date of grant, expire ten years from the date of issue or upon the option holders termination of employment or contractual relationship with the Company or its subsidiary for unvested options and ninety-days for vested options except in the case of death or disability then vested options expire one year from termination. Shares of common stock allocated to outstanding options unexercised which expire or are terminated may again be subject to an option grant. On July 9, 2009, the Company filed a registration statement on form S-8 for the twenty-five million shares of the Company’s Common Stock allocated to the Option Plan.

On July 6, 2009, the Company granted under the newly adopted Option Plan stock options to purchase an aggregate of 12,460,500 shares of the Company’s Common Stock with an estimated fair value of $5,218,093 to four officers (11,776,500 shares with an estimated fair value of $4,931,065) and twelve employees (684,000 shares with an estimated fair value of $287,028). The employee options, granted as incentive stock options (“ISO”), have an exercise price of $0.42 per share, generally vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire ten years the date of issue. The officers options, granted as ISO (2,181,519 shares) and non-qualified stock options (9,594,981 shares), have an exercise price of $0.46 per share, a Ten Percent (10%) premium on the market closing price, vest one third at the date of grant and one third at the end of the first and second year from the date of grant and expire in ten years from the date of issue except for ISO grants to Mr. Johnson and Dr. Johnson which expire in five years from the date of issue (see Note 15). Unvested options generally expire upon termination of employment and vested options expire 90 days after termination. ~~As of October 31, 2011, 12,216,500 options have vested and no options were exercised.~~ Compensation cost, using the graded vesting attribute method in accordance with Codification topic 718, is recognized over the requisite service period during which each tranche (one third) of shares is earned (zero, one, and two years). The value of each tranche is amortized on a straight-line basis; $141,660 and $1,150,694 were expensed during the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively. Amortization for the year ending April 30, 2012 is $141,660. Upon termination of employment 156,000 and 84,000 options have terminated during the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively. Prior to termination of employment and the option agreement, $210 and $1115,~~260~~736 were expensed in the ~~six~~nine months ended ~~October~~January 31, ~~2011~~2012 and the year ended April 30, 2011, respectively. An aggregate of 300,000 options ~~have~~were terminated upon termination of employment as of ~~October~~January 31, ~~2011~~2012. On January 4, 2012, the Company and 100% of those individuals holding outstanding stock options (representing 12,160,500 shares) agreed to cancel all such outstanding stock options in exchange for a new grant of a like number of stock options.

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 207.3%; risk-free interest rate of 3.52%; contractual life of ten years; and a closing market price of $0.42 except for the five year ISO grants which used a risk-free interest rate of 2.4%; contractual life of five years. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 215 week period (from Pink Sheet inception).69

OnDot ~~July 8~~VN, ~~2009, pursuant to the terms of a stock subscription agreement, the Company issued a warrant exercisable into 100,000 restricted shares of the Company’s Common Stock at a per share price of $1~~INC.50 ~~expiring~~AND ~~July 8, 2011. The warrants expired July 8, 2011 unexercised.~~SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

16. Warrants, options and stock based compensation (continued)

The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 207.3%; risk-free interest rate of 3.52%; contractual life of ten years; and a closing market price of $0.42 except for the five year ISO grants which used a risk-free interest rate of 2.40% and a contractual life of five years. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 215 week period (from Pink Sheet inception).

On July 8, 2009, pursuant to the terms of a stock subscription agreement, the Company issued a warrant exercisable into 100,000 restricted shares of the Company’s Common Stock at a per share price of $1.50 expiring July 8, 2011. The warrants expired July 8, 2011 unexercised.

On August 5, August 14, and August 24, 2009, pursuant to the terms of four stock subscription agreements, the Company issued four warrants exercisable into an aggregate of 260,000 restricted shares of the Company’s Common Stock at a per share price of $1.50 expiring August 5, August 14, and August 24, 2011. The warrants expired August 5, August 14, and August 24, 2011 unexercised.

On August 20, 2009, the Company issued a 10,000 share warrant pursuant to the terms of a consulting agreement exercisable into restricted shares of the Company’s Common Stock with an estimated fair value of $3,721 with a two year term and an exercise price of $1.00 per share. The value of the warrant was expensed in the month of grant. The warrant expired August 20, 2011 unexercised.

The fair value of the warrant was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 204.9%; risk-free interest rate of 1.03%; contractual life of two years; and a closing market price of $0.47. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 221 week period (from Pink Sheet inception).

On September 25, 2009, pursuant to the terms of a stock subscription agreement, the Company issued a warrant exercisable into 100,000 restricted shares of the Company’s Common Stock at a per share price of $1.50 expiring September 25, 2011. The warrant expired September 25, 2011 unexercised.

On October 7, 2009, pursuant to the terms of a stock subscription agreement, the Company issued a warrant exercisable into 110,000 restricted shares of the Company’s Common Stock at a per share price of $1.50 expiring October 7, 2011. The warrant expired October 7, 2011 unexercised.

On December 1, 2009, the Company issued a 200,000 share warrant pursuant to the terms of a consulting agreement exercisable into restricted shares of the Company’s Common Stock with an estimated fair value of $57,119 with a two year term and an exercise price of $1.00 per share. The value of the warrant was expensed in the month of grant; there is no unamortized balance at ~~October~~January 31, ~~2011~~2012. AsThe ofwarrant ~~October~~expired 31December 1, 2011, ~~no warrants were exercised~~unexercised.

The fair value of the warrant was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 198.7%; risk-free interest rate of 0.67%; contractual life of two years; and a closing market price of $0.38. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 236 week period (from Pink Sheet inception).

On December 30, 2009, in connection with the December Debentures (see Note 10), the Company issued detachable warrants to the investors exercisable into an aggregate of 100,001 restricted shares of the Company’s Common Stock at a per share price of $0.80. The warrants have a term of two years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $26,669. On June 10, 2010 one (1) December Investor exercised the conversion option on a $5,000 debenture thereby vesting the 16,667 share detachable warrant. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $4,167 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. On June 30, 2010, the remaining 83,334 warrant shares expired when the underlying debentures were not converted prior to their maturity. As of October 31, 2011, 16,667 warrants were vested and unexercised.70

~~The~~Dot ~~fair value of these warrants was estimated at December 30~~VN, ~~2009, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 197~~INC.~~1%;~~ ~~risk-free~~AND interest rate of 1.08%; contractual life of two years; and a closing market price of $0.35. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 240 week period (from Pink Sheet inception).SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

16. Warrants, options and stock based compensation (continued)

On ~~February~~December 1230, ~~2010~~2009, in connection with the ~~March~~December Debentures (see Note 10), the Company issued detachable warrants to the investors exercisable into an aggregate of 1100,~~531,666~~001 restricted shares of the Company’s Common Stock at a per share price of $0.3080. The warrants have a term of ~~three~~two years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $~~418~~26,~~064~~669. On ~~December~~June 1310, 2010, one ~~March~~(1) December Investor exercised the conversion option on ana $855,000 debenture thereby vesting the ~~425~~16,~~000~~667 share detachable warrant. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $424,~~500~~167 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. On June 30, 2010, the remaining 83,334 warrant shares expired when the underlying debentures were not converted prior to their maturity. As of ~~October~~January 31, ~~2011~~2012, ~~425~~16,~~000~~667 warrants ~~are~~were vested and ~~no warrants were exercised~~unexercised.

The fair value of these warrants was estimated at December 30, 2009, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 197.1%; risk-free interest rate of 1.08%; contractual life of two years; and a closing market price of $0.35. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 240 week period (from Pink Sheet inception).

On February 12, 2010, in connection with the March Debentures (see Note 10), the Company issued detachable warrants to the investors exercisable into an aggregate of 1,531,666 restricted shares of the Company’s Common Stock at a per share price of $0.30. The warrants have a term of three years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $418,064. On December 13, 2010, one March Investor exercised the conversion option on an $85,000 debenture vesting the 425,000 share detachable warrant. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $42,500 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. As of January 31, 2012, 425,000 warrants are vested and no warrants were exercised.

The fair value of these warrants was estimated at February 12, 2010, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 194.5%; risk-free interest rate of 1.38%; contractual life of three years; and a closing market price of $0.30. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 247 week period (from Pink Sheet inception).

On February 26, 2010, in connection with the March Debentures (see Note 10), the Company issued detachable warrants to the investor exercisable into an aggregate of 2,500,000 restricted shares of the Company’s Common Stock at a per share price of $0.30. The warrants have a term of three years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $681,212. On March 22, 2010, one (1) March Investor exercised the conversion option on $150,000 of principal, a portion of their March Debenture, vesting 750,000 share of the detachable warrant. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $71,395 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. On May 28, 2010 the same March Investor exercised the conversion option on $250,000 of principal, a portion of their March Debenture, vesting 1,250,000 share of the detachable warrant. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $128,605 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. As of ~~October~~January 31, ~~2011~~2012, 2,000,000 warrant shares are vested and no warrants were exercised.

The fair value of these warrants was estimated at February 26, 2010, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 193.6%; risk-free interest rate of 1.36%; contractual life of three years; and a closing market price of $0.30. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 249 week period (from Pink Sheet inception).71

OnDot ~~March 12~~VN, 2010, in connection with the March Debentures (see Note 10), the Company issued detachable warrants to the investor exercisable into 2,625,000 restricted shares of the Company’s Common Stock at a per share price of $0INC.~~30. The~~ ~~warrants~~AND have a term of three years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $689,384. On August 31, 2011 one (1) March Investor exercised the conversion option on two March Debentures aggregating $275,000 of principal vesting the detachable warrants aggregate 1,375,000 share. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $136,776 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. As of October 31, 2011, 1,375,000 warrants were vested. On November 23, 2011 one (1) March Investor exercised the conversion option on a March Debentures ($25,000 of principal) vesting the detachable warrants aggregate 125,000 share. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $12,434 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital.SUBSIDIARIES

Also on March 12, 2010, in connection with the March Debentures (see Note 10), the Company issued detachable warrants to the three Company officers (see Notes 10 and 15) exercisable into 3,343,336 restricted shares of the Company’s Common Stock at a per share price of $0.30. The warrants have a term of three years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $878,035. As of October 31, 2011, no warrants were vested.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of ~~October~~January 31, ~~2011~~2012

16. Warrants, options and stock based compensation (continued)

On March 12, 2010, in connection with the March Debentures (see Note 10), the Company issued detachable warrants to the investor exercisable into 2,625,000 restricted shares of the Company’s Common Stock at a per share price of $0.30. The warrants have a term of three years from the date of issuance and vests upon the conversion of the debenture with a partial debenture conversion vesting a proportional number of warrant shares. The estimated gross fair value, contingent upon vesting of the warrant shares, allocated to the warrants at the date of grant is $689,384. On August 31, 2011 one (1) March Investor exercised the conversion option on two March Debentures aggregating $275,000 vesting the detachable warrants aggregate 1,375,000 share. The fair value of the vested detachable warrants, calculated in accordance with Codification topic 470-20, is $136,776 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. On November 23, 2011, one March Investor exercised the conversion option on a $25,000 debenture vesting the 125,000 share detachable warrant. The fair value of the vested detachable warrant, calculated in accordance with Codification topic 470-20, is $12,434 and was recorded as debt discount, fully expensed when recorded, with a corresponding credit to additional paid-in capital. As of January 31, 2012, 1,500,000 warrants were vested and no warrants were exercised.

The fair value of these warrants was estimated at March 12, 2010, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 192.8%; risk-free interest rate of 1.50%; contractual life of three years; and a closing market price of $0.29. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 251 week period (from Pink Sheet inception).

On July 31, 2010, pursuant to the terms of two stock subscription agreements, the Company issued two warrants exercisable into an aggregate 303,715 restricted shares of the Company’s Common Stock at a per share price of $0.35 expiring July 31, 2013. As of ~~October~~January 31, ~~2011~~2012, no warrants were exercised.

On December 10, 2010, pursuant to the terms of three promissory note extension agreements, the Company issued a series of three warrants exercisable into an aggregate 1,000,000 restricted shares of the Company’s Common Stock at a per share price of $0.25 expiring December 10, 2013 to IDCG SA de CV, a corporation established under the laws of the Country of Mexico (“IDCG SA”) as consideration to extend the individual note due dates from December 31, 2010 to September 30, 2011 (see Note 11). The estimated aggregate fair value of $157,229 was capitalized as a deferred charge associated with the loan extensions and will be amortized on a straight-line basis over a nine month period (see Note 9). As of January 31, 2012, no warrants were exercised.

Dot VN, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of January 31, 2012

16. Warrants, options and stock based compensation (continued)

The fair value of these options was estimated at December 10, 2010, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 184.9%; risk-free interest rate of 1.03%; contractual life of three years; and a closing market price of $0.18. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 290 week period (from Pink Sheet inception).

On January 18, 2011, pursuant to the terms of a new six month promissory note, the Company issued a warrant for the purchase of 200,000 shares of the Company’s restricted common stock at $0.25 valid for a term of two years to G.F. Galaxy Corporation. The estimated fair value of $26,064 was capitalized as a deferred charge associated with the new promissory note and will be amortized on a straight-line basis over a six month period (see Note 9). As of January 31, 2012, no warrants were exercised.

The fair value of these options was estimated at January 18, 2011, the date of grant, using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 183.3%; risk-free interest rate of 0.60%; contractual life of two years; and a closing market price of $0.17. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 295 week period (from Pink Sheet inception).

On January 26, 2011, pursuant to the terms of two stock subscription agreements, the Company issued two warrants exercisable into an aggregate 1,000,000 restricted shares of the Company’s Common Stock at a per share price of $0.25 expiring January 26, 2013. As of ~~October~~January 31, ~~2011~~2012, no warrants were exercised.

On February 28, 2011, the Company issued two 150,000 share warrants pursuant to the terms of two consulting agreements exercisable into restricted shares of the Company’s Common Stock with an estimated fair value of $33,250 with a three year term and an exercise price of $1.00 per share. The value of the warrants was expensed in the month of grant; there is no unamortized balance at ~~October~~January 31, ~~2011~~2012. As of ~~October~~January 31, ~~2011~~2012, no warrants were exercised.

The fair value of these warrants was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 181.6%; risk-free interest rate of 1.18%; contractual life of two years; and a closing market price of $0.15. Expected volatility is calculated based on the historic Friday stock market closing price of the preceding 301 week period (from Pink Sheet inception).

64On March 31, 2011, pursuant to the terms of a stock subscription agreement, the Company issued a warrant exercisable into 2,583,948 restricted shares of the Company’s Common Stock at a per share price of $0.25 expiring March 31, 2013. As of January 31, 2012, no warrants were exercised.

During April 2011, pursuant to the terms of four stock subscription agreements, the Company issued four warrants exercisable into an aggregate of 1,525,000 restricted shares of the Company’s Common Stock at a per share price of $0.25 expiring in April 2013. As of January 31, 2012, no warrants were exercised.

On April 30, 2011, the Company issued a 100,000 share warrant pursuant to the terms of a strategic advisory board (“SAB”) agreement exercisable into restricted shares of the Company’s Common Stock with an estimated fair value of $30,693 with a three year term and an exercise price of $0.25 per share. The value of the warrant is expensed over the SAB one year service period ending November 30, 2011 with $17,904 and $12,789 expensed in the nine months ended January 31, 2012 and the year ended April 30, 2011, respectively. The unamortized balance at January 31, 2012 is zero and no warrants were exercised.

The fair value of these warrants was estimated at the date of grant using the Black-Scholes option-pricing model with dividend yield of 0%; expected volatility of 181.7%; risk-free interest rate of 1.01%; contractual life of three years; and a closing market price of $0.34. Expected volatility is calculated based on the historic Friday stock market closing p

Filing Compare · Dot VN, Inc.