COMMITMENTS

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

NOTE 11-

COMMITMENTS

Office Lease

The Company leases office space in Sterling, Virginia pursuant to a lease with a related party through common ownership related to the former President & CEO, which is currently month to month. The lease provides for an annual rental of approximately $78,000.

Rent expense for the nine months ended September 30, 2012 and 2011 was $19,500 and $58,500.

Board of Advisors Agreements

The Company’s board of directors approved the addition of two members to its Board of Advisors. Each of these members will provide assistance to the Company with respect to their healthcare solution and predictive technology to prospective banking, insurance and healthcare customers. As consideration for the placement on the Board of Advisors, the Company has, in addition to quarterly cash payments, granted those Advisors options under their 2007 Stock Incentive Plan that vest over a two-year period of time commencing in May 2010. Per agreement with one of the Board of Advisors members, the Company has not made the quarterly cash payments owing to that Advisor due to cash flow and liquidity issues. The Company has included these fees in their condensed consolidated statements of operations for the nine months ended September 30, 2012 and 2011.

Consulting Agreements

The Company has entered into consulting agreements with marketing and strategic consulting groups with terms that do not exceed one year. These companies are to be paid fees for the services they perform. The Company has included these fees in their condensed consolidated statements of operations for the nine months ended September 30, 2012 and 2011.

On January 26, 2010, the Company entered into an agreement with Coady Diemar Partners, LLC, an investment banker in connection with investment banking services. Pursuant to the agreement, Coady Diemar Partners, LLC received a retainer of $30,000 payable in two tranches of $15,000, and received 150,000 warrants as well as an 8% fee on amounts raised. The term of the agreement was for one-year. The warrants did not vest until June 2010.

In June 2010, the Company entered into a consulting agreement with a company to provide financial services and locate potential investment opportunities. The term of the agreement was for one-year, and the consultant was to receive monthly payments of $7,500, 300,000 shares of restricted common stock, and 900,000 warrants that vest over the one-year period and upon certain financing criteria being met. 300,000 of the warrants vested and the fees are included in the condensed consolidated statements of operations. The agreement terminated in February 2011, and the remaining 600,000 unvested warrants were cancelled.

In December 2010, the Company entered into an agreement with Strategic Global Advisors, LLC, a firm that provides investment and public relations consulting firm services. Pursuant to the agreement, Strategic Global Advisors, LLC will receive a retainer of $30,000 payable in four monthly payments of $7,500 and receive 500,000 options to purchase the Company's common stock that vest on the date of grant. The options were valued at $34,994. The Company has included these fees in their condensed consolidated statements of operations.

On March 2, 2011, The Board of Directors entered into an agreement with Assured Value Advisors, Inc., a merchant and investment banking services consultant in connection with investment banking services. Pursuant to the agreement, Assured Value Advisors, Inc. received 500,000 options to purchase shares of the Company's common stock; 300,000 vested during 2011(valued at $122,082 and included in 2011stock based compensation), and the remaining 200,000 vested in the first quarter of 2012 (valued at $66,000 and included in 2012 stock based compensation).

On March 28, 2011, The Board of Directors granted two employees 45,000 options to purchase shares of the Company's common stock; all of which vested upon grant. Employees’ grant of options was based on achievement of performance milestones. The vested options were valued at $13,370. The Company has included these fees in their condensed consolidated statements of operations.

On May 2, 2011, the Board authorized a consulting agreement with a consultant to provide comprehensive technical strategy assessment. The consulting contract was executed for a two-month period for a consulting fee of $8,000 and the issuance of 8,000 shares.

On January 5, 2012, the Company entered in an agreement with Dave Stocking to convert $2,400 of interest owed on a convertible note issued by the Company to 40,000 shares of the Company's common stock and to extend the maturity date of the convertible note to December 16, 2012.

On February 24, 2012, the Company entered into a consulting agreement with Manish Nandy to provide marketing assistance, primarily in the healthcare area, and proposal development services to support several Company customer initiatives. The term of the agreement was for three months, in exchange for $6,500 and 37,500 common shares valued at $15,000.

On February 24, 2012, the Company entered into Advisory Board agreement with Michael P. Harden under which Michael P. Harden received a total of 100,000 shares of the Company's common stock to vest as follows: 20,000 shares following the execution of the Advisory Board agreement, 20,000 shares of the Company's common stock 365 days after the date of the Agreement and 20,000 shares every 180 days thereafter in equal amounts.

On February 24, 2012, the Company entered into Forbearance Agreement with Prem K. Dadlani and extended the date of repayment of the unpaid principal and accrued interest of the Dadlani Note to June 30, 2012 and to issue 100,000 shares of its common stock to him as forbearance consideration. The agreement is in default and settlement agreement is being negotiated.

On December 22, 2011 and February 24, 2012 the Company entered into a promissory note agreement with Sanjeev Kohli and Pyush Kumar, respectively, in the principal amount of $20,000 each pursuant to which Mr. Kohli shall receive 20,000 shares of the Company's common stock and an additional 40,000 shares of the Company's common stock in the event that the unpaid principal and accrued interest is not paid within six months of the date of the promissory note. No payment was made, and these shares have been accrued for in the condensed consolidated statement of operations for the nine months ended September 30, 2012.

On February 24, 2012, the Company entered into an agreement with a consultant for various services, including assistance with financings, in exchange for a common stock grant of 150,000 shares of the Company's common stock.

On March 13, 2012, the Company entered into Consulting Agreement with Amrit Chase to provide assistance with the timely filing of the Company's Form 10-K for the year ended December 31, 2011. Under the terms of the Consulting Agreement, Amrit Chase received 150,000 shares of the Company's common stock and a payment of $10,000.

On March 13, 2012, the Company entered into Consulting Agreement with Ray Piluso to provide assistance with the timely filing of the Company's Form 10-K for the year ended December 31, 2011. Under the terms of the Consulting Agreement Ray Piluso received 100,000 shares of the Company's common stock.

Employment Agreements

During the year ended December 31, 2009, the Company entered into four separate employment agreements with their key executives. The employment agreements range from three to five years , and require the Company to compensate the key executives for a base salary, as well as provide for incentive compensation. In addition, the executives were granted in total 3,250,000 stock options that vest through December 2011. The Company also entered into another employment agreement in January 2010 which granted an additional 20,000 options to an employee. This agreement was for a period of two years. In August and September 2011 the Company hired two employees who were to receive 200,000 options that vest equally over the next eight quarters and 60,000 options that vest equally over the next four quarters, respectively. As of September 30, 2012 a total of 160,000 options from these two employment agreements have vested and were valued at a total of $41,238. The Company has included these fees in their condensed consolidated statements of operations.

- Definition

The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.

+ References+ Details

INFERX CORP 10-Q