XML 52 R18.htm IDEA: XBRL DOCUMENT v2.4.0.6
11. COMMON STOCK
 12 Months Ended
Dec. 31, 2012
Equity [Abstract]  
NOTE 11. COMMON STOCK
11. COMMON STOCK

 

Shares Issued

 

Issuances of the Company’s common stock during the years ended December 31, 2012 and 2011, respectively, are as follows:

 

2012

 

Stock Issued in Cash Sales

 

During the year ended December 31, 2012 pursuant to private placements, the Company issued 4,200,000 shares of common stock for cash with a per share price of $0.25 per share or $1,050,000 and the Company incurred $84,000 of capital raising fees that were paid in cash and charged to additional paid-in capital.

 

Stock Issued for Services

 

In May 2012, the Company issued 31,786 shares of common stock with a per share value of $0.22 (based on market price at the time of the transaction) or $6,993, for professional services rendered. The shares were fully vested and expensed during the three months ended June 30, 2012.

 

In October 2012, the Company issued 562,500 vested shares of common stock with a per share value of $0.12 (based on market price at the time of the transaction) or $67,500, for professional services to be rendered. The value of this contract was recorded as a prepaid asset and will be amortized over the nine month term of the agreement.

 

Stock Issued for Conversion of Convertible Debt

 

On March 22, 2012, a lender provided notice to the Company to convert the entire principal and accrued interest of his outstanding convertible note into common stock of the Company. As such, the Company issued 3,448,276 shares of common stock at $0.29 (based on contractual terms of the note) related to the $1,000,000 of principal and 199,315 shares of common stock at $0.24 (based on market price at time of transaction) for the $47,836 of accrued interest or a total of 3,647,591 shares of common stock in retirement of all outstanding obligations related to this convertible note. (See note 9)

 

Stock Issued in Settlement of Note Payable

 

In April 2012, the Company issued 100,000 shares of common stock with a per share value of $0.29 (based on market price at time of transaction) or $29,000 as a partial payment of outstanding debt. The Company recorded a reduction of notes payable of $22,114, a reduction of accrued interest of $10,886 and a gain on debt settlement of $4,000 related to this transaction. (See Note 8)

 

In October 2012, the Company issued 150,000 shares of common stock with a per share value of $0.13 (based on market price at time of transaction) or $19,500 as a partial payment of outstanding debt. The Company recorded a reduction of notes payable of $43,372, a reduction of accrued interest of $6,128 and a gain on debt settlement of $30,000 related to this transaction. (See Note 8)

 

2011

 

Stock Issued in Cash Sales

 

During the year ended December 31, 2011 pursuant to private placements, the Company issued 4,906,430 shares of common stock for cash with a per share price of $0.35 per share or $1,717,251, and the Company incurred $254,513 of capital raising fees that were paid in cash and charged to additional paid-in capital.

 

Stock Issued for Services

 

In May 2011, the Company issued 4,167 shares of common stock with a per share value of $0.35 (based on contemporaneous cash sales prices) or $1,458, for professional services rendered. The shares were fully vested and expensed during the three months ended June 30, 2011.

 

In August 2011, the Company issued 1,000,000 shares of common stock with a per share value of $0.27 (based on market price at time of transaction) or $270,000, for professional consulting services. The value of these services was recorded as prepaid expense and is being expensed over the five month service period of the contract.

 

Stock Issued in Conversion of Convertible Note

 

In September 2011, the Company issued a convertible note for $16,140 in a dollar for dollar exchange of an accounts payable balance. The convertible note called for a conversion to common stock at a price of $0.30 per share. There was no beneficial conversion value at the note date. Immediately after issuance of the note, the note was converted to 53,800 shares of common stock with a per share value of $0.30 (based on the contractual terms of the note) or $16,140. There was no gain or loss recorded in this transaction.

 

Stock Issued in Settlement of Note Payable

 

In May 2011, the Company issued 100,000 shares of common stock with a per share value of $0.35 (based on contemporaneous cash sales prices) or $35,000 as a partial payment of outstanding debt. The Company recorded a reduction of notes payable of $15,616, a reduction of accrued interest of $17,384 and a loss on debt settlement of $2,000 related to this transaction. (See note 8)

 

Stock Issued for Debt Settlement

 

On March 24, 2011 the Company agreed to settle the lawsuit filed in July 2009 by a company owned by one of its shareholders primarily related to past due obligations. The settlement calls for a payment of $50,000 upon signing the settlement agreement and future payments in each of the subsequent five months of either 1) $35,000 in cash or 2) stock equivalent to $35,000 based on the end of day closing price of the Company’s stock on the first trading day of said month, at the Company’s option. The Company paid the initial $50,000 payment and recorded an additional $58,841 of expense in the three month period ended March 31, 2011 related to this liability. Further, during 2011, the Company issued 413,564 shares of common stock as payment of this obligation consistent with the settlement agreement. The per share values of these 413,564 shares issued consisted of: 198,279 shares at $0.35 (based on contemporaneous cash sales prices), 94,595 shares at $0.37 (based on market price), and 120,690 shares at $0.29 (based on market price). The Company reduced the outstanding debt by $175,000 and recorded a gain on settlement of debt of $35,602 related to these transactions. (See note 11)

 

In December of 2011, the Company issued 86,957 shares of common stock with a per share price of $0.23 (based on market price at time of transaction) or $20,000 as full payment of amounts owed to a former employee. There was no gain or loss recorded in this transaction.

 

Return of Stock in Settlement

 

In September 2011, the Company agreed to the return of 30,000 shares of common stock with a per share value of $0.29 (based on market price) or $8,700 as settlement of a dispute with a vendor for services previously paid and expensed but never rendered to the satisfaction of the Company. A gain on debt settlement of $8,700 was recorded in this transaction.

 

Other

 

In August 2011, the Company signed an agreement which it pledged newly issued shares of common stock to be valued at market prices as collateral for any claims made against a performance bond issued on behalf of the Company. The project for which the bond was issued is complete as of December 31, 2011 and there were no claims that would cause such collateral to be called. As of December 31, 2012, this bond has been cancelled.