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Equity
 9 Months Ended
Sep. 30, 2013
Equity  
3. Equity

Diluted Earnings per Share (“EPS”) gives effect to all dilutive potential common shares outstanding during the period. The computation of Diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on losses.  As a result, if there is a loss from continuing operations, Diluted EPS is computed in the same manner as Basic EPS.  At September 30, 2013 and 2012, the Company had, respectively, 87,083 and 103,750 post-split options outstanding, that were not included in the calculation of earnings per share for the periods then ended.  Such financial instruments may become dilutive and would then need to be included in future calculations of Diluted EPS.  At September 30, 2013 and 2012, the outstanding options were considered anti-dilutive since the strike prices were above the market price and since the Company has incurred losses year to date.

 

On August 24, 2011, Albert E. Whitehead, the Company’s Chief Executive Officer, was issued 166,667 shares (2,000,000 pre-split shares) of the Company’s common stock for a purchase price of $.60 per share (post-split) for a total investment of $100,000.

 

On May 31, 2012, at an Annual Meeting of Stockholders, the stockholders approved an increase of the Company’s authorized shares of common stock by 50,000,000 to 150,000,000.

 

On December 11, 2012, the Company entered in a note conversion agreement with the Albert E. Whitehead Living Trust (the “Whitehead Trust”).  Pursuant to the note conversion agreement, on December 11, 2012, the Company converted $300,013 in debt owed by the Company to the Whitehead Trust into shares of Common Stock at a conversion rate of $0.60 per share (post-split), resulting in the issuance of 500,021 shares (6,000,250 pre-split shares) of Common Stock to the Whitehead Trust.  Upon the issuance of such shares, such debt owed by the Company to the Whitehead Trust was deemed paid in full and certain notes issued by the Company and the other obligations relating to such debt were terminated.  Albert E. Whitehead, the Chief Executive Officer of the Company and Chairman of its Board of Directors, is the trustee of the Whitehead Trust.

 

At the Company’s annual shareholders meeting on July 10, 2013, shareholders approved a proposal to allow the Company’s Board of Directors to authorize a one-for-twelve reverse stock split.  The Board of Directors approved the reverse stock split on July 29, 2013 which became effective August 12, 2013.  The reverse split did not change the authorized number of shares of Common Stock of the Company or the par value of the Common Stock.