NOTE 9 - Stockholders' equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity Note Disclosure [Text Block]

NOTE 9 – Stockholders’ equity

Common stock

The Company is authorized toissue 100,000,000 shares of Common Stock, $0.001 par value per share. Holders of shares of common stock are entitled to one vote for each share on all matters to be voted on by the stockholders, are without cumulative voting rights, and are entitled to share ratably in dividends. In the event of a liquidation, dissolution, or winding up of the Company, the holders of shares of Common Stock are entitled to share pro rata all assets remaining after payment in full of all liabilities. Holders of Common Stock have no preemptive rights to purchase the Company’s Common Stock. There are no conversion rights or redemption or sinking fund provisions with respect to the common stock.

Preferred Stock

The Company is authorized to issue 10,000,000 shares of $0.001 par value preferred stock; of which 1,000,000 shares are designated as 8% Series A Convertible Preferred Stock. The preferred stock may be issued from time to time by the board of directors as shares of one or more classes or series.

8% Series A Convertible Preferred Stock

Holders of 8% Series A Convertible Preferred Stock shall not have the right to vote on matters that come before the stockholders. The Series A Convertible Preferred Stock is redeemable at the Company’s option, in whole or in part, at a redemption price of $2.00 per share. Series A Convertible Preferred Stock may be converted at a rate of four shares of common stock for each share of Series A Convertible Preferred stock. Series A Convertible Preferred Stock ranks senior to common stock in the event of liquidation.

As of December 31, 2010, there were 62,500 preferred shares issued and outstanding, 14,048,023 common shares issued and outstanding, and 1,000,000 common shares owed but not issued.

Year Ended December 31, 2011

In March of 2011, 850,000 shares owed as of December 31, 2010 were issued and 150,000 were canceled.

In February of 2011, 250,000 shares were granted to a new employee as a signing bonus. As of December 31, 2011, the shares had not been issued and are therefore shown as owed but not issued on these financial statements. The shares were valued at market value on the day they were granted and $110,000 was expensed.

In September of 2011, 184,000 shares were surrendered to the Company and canceled in settlement of a note receivable. See note 6 for further details.

In December of 2011, 275,000 shares were granted to employees for services rendered. As of December 31, 2011, the shares had not been issued and are therefore shown as owed but not issued on these financial statements. The shares were valued at market value on the day they were granted and $41,250 was expensed. 225,000 of these shares were issued in January of 2012.

As of December 31, 2011, there were 62,500 preferred shares issued and outstanding, 14,714,023 common shares issued and outstanding, and 525,000 common shares owed but not issued.

Three-months Ended March 31, 2012

In January of 2012, 225,000 shares of common stock that were owed but not issued at December 31, 2011 were issued.

In March of 2012, 50,000 shares of common stock that were owed but not issued at December 31, 2011 were issued.

As of March 31, 2012, there were 62,500 preferred shares issued and outstanding, 14,989,023 common shares issued and outstanding, and 250,000 common shares owed but not issued.