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Note 11 - Shareholders' Equity
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3 Months Ended | ||||||||||||||||||||
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Nov. 30, 2011
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| Stockholders' Equity Note Disclosure [Text Block] |
11.
SHAREHOLDERS’
EQUITY
Preferred
Stock Issuances
During the quarter ended August 31, 2011, several private
investors made an equity investment of $430,250 for which
these investors received 430,250 shares of the
Company’s redeemable convertible preferred stock.
The proceeds were used for operating capital.
During the quarter ended August 31, 2011, a secured
lender agreed to accept payment of the outstanding
interest owed on its note through May 25,
2011, totaling approximately $277,544 into
277,544 shares of the Company’s preferred stock.
In August 2011, the Company issued 50,000 shares of
preferred stock to a lender in connection with a loan to
the Company of $200,000. The company recorded
total debt discount of $50,000 and interest expense of
$2,778 in connection with these shares.
During
the quarter ended November 30, 2011, one private investor
made an investment of $370,000 for which he received
370,000 shares of the Company’s redeemable
convertible preferred stock. The proceeds were used for
operating capital.
During
the quarter ended November 30, 2011, two preferred
shareholders converted a total of 263,300 shares of
preferred stock at the conversion rate of $.30 per share
for which they received a total of 877,666 shares of common
stock.
Common
Stock Issuances
In
September 2011, two preferred shareholders converted a
total of 263,300 shares of preferred stock at the
conversion rate of $.30 per share for which they received a
total of 877,666 shares of common stock.
In October,
2011, the Company issued a total of 155,000 shares of
common stock to three employees. The company has record an
expense of $75,950 in connection with
these shares over a one year amortization period.
Stock
Option Issuances
On
or about February 11, 2011, the Company entered a marketing
and distribution agreement with KeHE Distributors pursuant
to which the Company is obligated to issue stock options
subject to KeHE achieving the purchase thresholds as set
forth below:
The
total number of shares represents 9.99% of the
Company’s common stock outstanding on a
fully-diluted basis. The respective stock options which
will have an exercise period of three years from the date
of issuance at an exercise price of $.30 per
share. During May 2011, the Company amended
the vesting terms of these options, whereby 440,000 of
such options were vested and the remainder of the options
vested as of August 31, 2011.
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