12. Subsequent events
|
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2011
|
|||
Subsequent Events [Text Block] |
2011
Fall#3 Offering
From
December 19, 2011 through January 15, 2012, the
Company conducted a private offering (the
“Fall#3 2011 Offering”) of up to $3,000,000
aggregate face amount of its convertible notes (the
“Fall#3 2011 Notes”). A total of
$1,020,734 aggregate face amount of the Fall#3
2011 Notes were sold for an aggregate purchase
price of $927,940. While the stated interest
rate on the Fall#3 2011 Notes is 0%, the actual interest
rate on the Fall#3 2011 Notes is 10% per annum. The Fall#3
2011 Notes mature on the first anniversary of their date of
issuance. The Fall#3 2011 Notes are convertible, at the
option of the noteholder, into 4,082,936 shares of common
stock of the Company (the “Conversion Shares”)
at an initial conversion price of $0.25 per share (the
“Conversion Price”).
Each
of the investors in the Fall#3 2011 Offering received, for
no additional consideration, a warrant (the “Fall#3
2011 Warrants”), entitling the holder to purchase a
number of shares of the Company’s common stock equal
to 100% of the number of shares of common stock into which
the Fall#3 2011 Notes are convertible (the “Warrant
Shares”). Each Fall#3 2011 Warrant is
exercisable on a cash basis only at an initial price of
$0.30 per share, and is exercisable immediately upon
issuance and for a period of two (2) years from the date of
issuance. Up to 4,082,936 Warrant Shares are initially
issuable to date on exercise of the Fall#3 2011
Warrants.
2012
Winter Offering
From
January 24, 2012 through February 3, 2012, the
Company conducted a private offering (the
“Winter 2012 Offering”) of up to $2,000,000
aggregate face amount of its convertible notes (the
“Winter 2012 Notes”). A total of $451,550
aggregate face amount of the Winter 2012 Notes
were sold for an aggregate purchase price of
$410,500. While the stated interest rate on the
Winter 2012 Notes is 0%, the actual interest rate on the
Winter 2012 Notes is 10% per annum. The Winter 2012 Notes
mature on the first anniversary of their date of issuance.
The Winter 2012 Notes are convertible, at the option of the
noteholder, into 1,806,200 shares of common stock of the
Company (the “Conversion Shares”) at an initial
conversion price of $0.25 per share (the “Conversion
Price”).
Each
of the investors in the Winter 2012 Offering received, for
no additional consideration, a warrant (the “Winter
2012 Warrants”), entitling the holder to purchase a
number of shares of the Company’s common stock equal
to 100% of the number of shares of common stock into which
the Winter 2012 Notes are convertible (the “Warrant
Shares”). Each Winter 2012 Warrant is
exercisable on a cash basis only at an initial price of
$0.30 per share, and is exercisable immediately upon
issuance and for a period of two (2) years from the date of
issuance. Up to 1,806,200 Warrant Shares are initially
issuable to date on exercise of the Winter 2012
Warrants.
Increase
in Outstanding Shares
During
the period from January 1, 2012 through March 15, 2012, the
Company issued 6,436,764 shares of its common
stock. This was comprised of the
following:
The
Company issued 5,936,764 shares of its common stock upon
conversion of $1,484,191 of debt to its existing
convertible note holders.
The
Company issued 500,000 shares of its common stock per
consulting agreement with Integra Consulting Group, LLC,
valued at $150,000. The shares were valued at
the trading price at the date of the agreement.
Employment
Agreement Chief Financial Officer
On
February 1, 2012, the Company entered into a five
year employment agreement with Greggory M.
Bigger as the Company’s Chief Financial
Officer. Pursuant to the agreement, Mr. Bigger
will receive an annual salary of $120,000 and options to
purchase 4,000,000 shares of common stock at $0.25 per
share. The options valued at $1,207,193 using
the Black-Scholes Option Pricing model vest over five years
and will expire on February 1, 2022.
|