Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
3 Months Ended
Sep. 30, 2012
Notes to Financial Statements  
NOTE 8 - STOCKHOLDERS' EQUITY

In September 2012, the board authorized additional share issuances to three investors who previously converted convertible debentures at $1.50 per share per the terms of the debentures.  The additional share issuance was to ratchet the prior conversions from $1.50 per share, down to $0.65 per share.  As a result, the Company issued 147,052 additional shares of common stock valued at $0.65, based on contemporaneous cash offering prices, and recorded an expense of $95,611 as the original agreement didn't call for price protection.

 

In September 2012, a $75,000 convertible debenture was converted into shares of common stock pursuant to a conversion notice.  $76,896 of principal and interest was converted at $1.50 into 51,264 shares.  The original agreement stipulated a conversion price of $1.50 however, as the Company voluntary ratcheted down the conversion to $0.65, the Company recorded an additional expense of $43,547 (based on contemporaneous cash sales prices of $0.65) related to the additional 67,037 shares issued.

 

In September 2012, the Company entered into an agreement to issue 300,000 shares of common stock for services rendered during the three months ended September 30, 2012.  The shares were valued at $0.65 based on contemporaneous cash offering prices and accordingly, the Company recognized an expense of $195,000.

 

In September 2012, the Company issued 30,000 shares of common stock for past services to a consultant.  The shares were valued at $0.65 based on contemporaneous cash offering prices and accordingly, the Company recognized an expense of $19,500 related to the transaction.