Quarterly report pursuant to sections 13 or 15(d)

COMMON STOCK

v2.3.0.11
COMMON STOCK
6 Months Ended
Jun. 30, 2012
Equity [Abstract]  
COMMON STOCK

 

The Company’s Certificate of Incorporation, as amended, authorizes the Company to issue 250,000,000 shares of $0.001 par value common stock. Common stockholders are entitled to dividends when and if declared by the Board of Directors. The holder of each share of common stock is entitled to one vote. As of June 30, 2012, no dividends had been declared.

 

Common stock that the Company had reserved for issuance at June 30, 2012, is as follows:

 

Exercise and conversion of common stock warrants   1,743,056  
Stock options outstanding   1,829,030  
Stock options available for future grants under the 2008 Stock Plan   1,535,876  
       
Total shares of common stock reserved   5,107,962  

 

 

As of June 30, 2012 the Company had outstanding $1,305,488 of convertible note principal. These convertible notes, along with related accrued interest, convert upon the Next Equity Financing or at the option of the note holder as follows:

 

$17,000 of convertible debt principal have interest at 5% and warrants equivalent to 20% of the principal balance, respectively, and convert upon the next equity financing.

 

$500,000 and $230,000 of convertible note principal and related accrued interest convert at two-thirds the price per share of the Next Equity Financing and the $500,000 of convertible note principal have warrants equivalent to 100% of the principal balance and the $230,000 of convertible note principal have no warrants attached.

 

$211,750 of convertible note principal having interest at 6%, can convert at prices ranging from $0.02 to $0.10 per share at anytime at the option of the note holder, and have no warrants. As of June 30, 2012, $83,750 of the principal of this $211,750 convertible debt has converted to common shares.

 

$90,000 of convertible note principal having interest at 6%, can convert at $0.10 or $0.20 per share at anytime at the option of the note holder and warrants equivalent to 100%. As of June 30, 2012, $57,000 of the principal of this $90,000 convertible debt has converted to common shares.

 

$244,988 of convertible note principal, having an interest rate of 8.5%. no warrants, can convert at $0.11 per share at anytime at the option of the note holder.

 

$91,500 of convertible note principal, having and interest rate of 8%, no warrants, can convert at 50-55% of the average of the two-three lowest trading days of the prior 10-60 trading days, there is a 180 day waiting period before the holder has the option to convert to common shares.

 

$9,500 of convertible note principle was issued as part of a unit debt instrument which consisted of a return on investment (“ROI”) agreement and a convertible promissory note in return for $10,000. The ROI has a redemption value of $10,500 due on demand and the convertible promissory note is for $9,500, non-interest bearing, due September 20, 2012, and is convertible to common shares after six months from the date of the note at a conversion price that is 50% of the lowest trading price over the 20 prior trading dates from the date of conversion notice. The common share effect of the convertible debt is not included in the above schedule since the number of shares will not be determinable until the Next Equity Financing. (See Note 8)

 

$30,000 of convertible note principal, having interest of 12% per annum, compounded monthly, can convert any time at the option of the note holder, conversion at 55% of the lowest trading price over the prior three trading days from the date of conversion.

 

$21,500 of convertible note principal, having interest of 12% per annum, can convert anytime at the option of the note holder, can convert at 55% of the average of the three lowest trading prices over the prior ten trading days from the date of conversion.

 

The common share effect of the warrants related to the following convertible debt has been included in the above schedule.

 

During the six months ended June 30, 2012 the Company issued $1,258,412 worth of common stock to various consultants for services and it paid $54,442 of trade accounts payable with shares of common stock in settlement of the trade debt.