Pharmagen, Inc. (OTCPK:PHRX) announced a private placement of an original issue discount promissory note for gross proceeds of $150,000 on February 24, 2014. The transaction included participation from a new accredited investor, Network Ventures, LLC. The note has a principal value of $180,000 and was issued at a 20% discount. The note will mature on October 1, 2015. The note will not accrue any interest until December 31, 2014 and will carry 8% interest rate after that. The company will repay the notes by repaying, $5,000 on April 1 and May 1, 2014, which will be applied against the outstanding principal amount, in the event the company, between the date of the note and the maturity date close on debt or equity financing that, in the aggregate, exceeds $15,000,000, then it will repay the entire unpaid principal amount no later than the date which is 120 days after the closing of said financing, in the event any of the principal amount remains unpaid as of June 1, 2014, then it will pay to the holder on the first of each month beginning on June 1, 2014, and continuing until December 31, 2014, an amount equal to 7.5% of the gross profit from pharmaceutical sales by its wholly-owned subsidiary, Pharmagen Distribution, LLC for the month prior to the immediately preceding month, with a maximum monthly payment of $15,000, until the entire principal amount, plus accrued interest, is repaid in full, in the event any of the principal amount remains unpaid as of the interest start date, then in addition to any other payments, including principal or interest, it will pay to the holder an amount equal to 20% of the gross profit from pharmaceutical sales by its wholly-owned subsidiary, Pharmagen Distribution, LLC, for a period beginning on the interest start date and ending on the later of; six months, or until the entire principal amount, plus accrued interest, is repaid in full, and notwithstanding the above, the entire unpaid principal amount and all accrued but unpaid interest shall be due on the maturity date. The company also issued 2,000,000 common shares as consideration. The company issued securities pursuant to exemption provided under Regulation D. Brian A. Lebrecht of Clyde Snow & Sessions, P.C. acted as a legal advisor to the company.


On February 24, 2014, Pharmagen, Inc. closed the transaction.