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COMMON STOCK
 12 Months Ended
Dec. 31, 2011
Stockholders Equity Note [Abstract]  
COMMON STOCK
NOTE 5 – COMMON STOCK
 
The Company is authorized to issue 50,000,000 shares of common stock, par value $0.01 per share. There were 32,519,433 shares issued and outstanding at December 31, 2011.
 
On May 18, 2010, the Company affected a 1 for 1,000 reverse split of its common stock. In lieu of issuing fractional shares resulting from the split, the Company paid cash equal to $18.50 per share to each shareholder that would have received less than one share as a result of the reverse split, and rounded up all other fractional shares to the next whole number. The Company’s principal purpose in effecting a large reverse split was to eliminate many small shareholders to reduce future administrative costs. As a result of the reverse split, the Company cancelled 32,202 pre-split shares and eliminated 586 shareholders, which left the Company with about 100 total shareholders. The purchase price for the fractional shares was equal to the last trading price of the common stock as the date the Company approved the reverse split, adjusted for the 1 for 1,000 reverse split. All share amounts for 2010 have been adjusted to give effect to the reverse split.
 
On May 6, 2010, the Company’s board of directors passed resolutions to amend its Articles of Incorporation to (1) change the Company’s name to “Next Generation Energy Corp.” and (2) increase the authorized shares of common stock back to 50,000,000 shares from the 50,000 shares that resulted from the reverse split described above. The amendments were effective July 23, 2010.
 
During 2010, the Company issued shares of common stock in the following transactions:
 
 
●
On April 12, 2010, we issued 7,000 shares (post-split) of common stock to Darryl Reed for $35,000, or $0.005 per share, which was the market price on the date of issuance. Mr. Reed is our chairman and chief executive officer. Mr. Reed paid for the shares by crediting the purchase price against amounts owed him for compensation.
 
 
●
On October 22, 2010, we issued 5,000,000 shares of common stock to Darryl Reed for $50,000, or $0.01 per share, which was the agreed value of the services because of the absence of a reliable market price for our common stock on the date of issuance. Mr. Reed is our chairman and chief executive officer. Mr. Reed paid for the shares by crediting the purchase price against amounts owed him for compensation.
 
 
●
On October 22, 2010, we issued 4,900,000 shares of common stock to Joel Sens for $49,000, or $0.01 per share, which was the agreed value of the services because of the absence of a reliable market price for our common stock on the date of issuance. Mr. Sens is a director and officer. The shares issued to Mr. Sens were accounted for as compensation to Mr. Sens.
 
 
●
October 22, 2010, we issued 750,000 shares of common stock to various consultants, which were valued at the market price or agreed value of the services because of the absence of a reliable market price for our common stock on the date of issuance.
 
 
●
In 2010, we issued 300,000 shares of common stock upon the exercise of options with an exercise price of $0.30 per share, and recorded the option consideration as a subscription receivable.
 
During 2011 the Company issued shares of common stock in the following transaction:
 
 
●
In September 2011, we issued 10,000,000 shares of common stock to Darryl Reed, our chief executive officer, in satisfaction of $600,000 of accrued compensation;
 
 
●
In September 2011, we issued 800,000 shares for the exercise of options, of which $47,135 is outstanding as a stock subscription receivable;
 
 
●
In the quarter ended June 30, 2011, we issued 600,000 shares to consultants valued at $172,000;
 
 
 
●
In September 2011, we issued 10,000,000 shares to Seawright Holdings, Inc. in satisfaction of a note payable to Seawright in the original principal amount of $600,000.
 
 
●
During the fourth quarter of 2011, we issued 150,000 shares valued at $12,000 in exchange for an extension of a convertible note payable.
 
Options/Warrants
 
Transactions involving options issued in the years ended December 31, 2011 and 2010 are summarized below:
 
Options/Warrants
Weighted average
Exercise Price
Outstanding as of December 31, 2009
 480 $ 500.00
Issued
 1,100,000 .30
Options exercised
 300,000 .30
Cancelled/Expired
 - --
Outstanding as of December 31, 2010
 800,480 $ 0.30
Issued
 800,000
0.167 to 0.40
Exercised
 800,000
0.167 to 0.40
Cancelled/Expired
 180 $ 500.00
Outstanding as of December 31, 2011
 800,300 $ 0.30
Total stock-based compensation expense recognized by for the years ended December 31, 2011 and 2010 attributable to the issuance of options was $126,590 and $99,165, respectively. The weighted-average significant assumptions used to determine the fair those fair values, using a Black-Scholes option pricing model are as follows:
 
2011
Significant assumptions (weighted-average):
 $0.30
Risk-free interest rate at grant date
 0.72%
Expected stock price volatility
 56.03%
Expected dividend payout
 0%
Expected option life (in years)
4.2 years
 
2010
Significant assumptions (weighted-average):
 $0.37
Risk-free interest rate at grant date
 0.07%
1.928%
Expected stock price volatility
 22.79%
Expected dividend payout
 0%
Expected option life (in years)
4 years 10 months
 
 
 
 
The weighted average remaining contractual life of the options and warrants issued by the Company as of December 31, 2011 is set forth below.
 
Date of Issuance
Number of
Options/Warrants
Exercise Price
Contractual Life
Weighted
Average
Remaining
Contractual Life
(Years)
January 29, 2002
 300 500.00
10 years
 0.1
October 22, 2010
 800,000 0.30
5 years
 4.0
800,300 4.0
 
Stock and Option Plans
 
On October 22, 2010, the Company filed a registration statement on Form S-8 to register up to 2,000,000 shares of common stock for issuance for services rendered or to be rendered the Company under the Company’s 2010 Stock Option Plan (the “Option Plan”). During 2010, the Company issued 1,100,000 options under the Option Plan.
 
On October 22, 2010, the Company filed a registration statement on Form S-8 to register up to 1,500,000 shares of common stock for issuance for services rendered or to be rendered under the Company’s 2010 Employee, Consultant and Advisor Stock Compensation Plan. During 2010, the Company issued 1,250,000 shares of common stock under the Plan, of which 500,000 were issued to officers and directors of the Company.