Pharmagen, Inc. (OTCBB:PHRX) announced a private placement of a senior secured credit facility evidenced by convertible promissory note for gross proceeds of $2,000,000 on February 28, 2013. The note bears an interest at the rate of 12% per annum, increasing to 18% per annum upon the occurrence of an event of default. The note is convertible into common stock at 85% of the lowest volume weighted average price during the five business days immediately prior to the conversion date, subject to the investor not being able to beneficially own more than 4.99% of outstanding common stock upon any conversion. The transaction will be subscribed by existing accredited investor TCA Global Credit Master Fund, LP, a fund managed by Trafalgar Capital Advisors LTD. Brian A. Lebrecht of The Lebrecht Group, APLC will act as the legal advisor to Pharmagen, Inc. Seth A. Brookman of Lucosky Brookman LLP will act as legal advisor to Trafalgar Capital Advisors LTD. The company also agreed to pay to the investor various fees during the term of the transaction, including a commitment fee of 3% of the loan, and 2% of any increase in the amount thereof, a due diligence fee of $5,000, and document review fees of $12,500 in connection with the closing. The company also agreed to pay to the investor an investment banking fee of $100,000, payable in the form of 6,666,667 shares of common stock.

On March 29, 2013, Pharmagen, Inc. closed the transaction. The company received $600,000 from the investor. The note is due and payable along with interest thereon on June 14, 2014. As a commitment fee in connection with the transaction, the company issued 6,666,667 shares of common stock to the investor. The company paid an aggregate of $66,450 in fees, taxes, expenses and closing costs, and received net proceeds of $528,550 in the execution of the first tranche.