On January 28, 2012, Varca Ventures, Inc. and its wholly-owned subsidiary, Wildcat Mining Corp. entered into a Loan Agreement with Sarasota Varca Associates, LLC pursuant to which Lender agreed to lend an aggregate minimum amount of $400,000.00 up to a maximum amount of $500,000.00. In connection with execution of the Loan Agreement, the company received proceeds under the Loan of $400,000 and executed a Subordinated Secured Promissory Note for that amount dated January 28, 2012. The Note accrues interest at the rate of 12% per annum. Accrued interest is to be paid monthly beginning with the monthly period ending February 29, 2012. The entire principal amount of the Note and all accrued and unpaid interest thereon is due and payable in full on or before July 31, 2013. The company has the option to repay the entire principal amount of the Note and all accrued and unpaid interest at anytime prior to the Maturity Date upon payment of a penalty of 5% of the principal amount of the Note.