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12. Subsequent events | 12 Months Ended
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Dec. 31, 2011
Subsequent Events [Text Block] |
12. | Subsequent events
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.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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