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SUBSEQUENT EVENTS
12 Months Ended
Dec. 31, 2011
SUBSEQUENT EVENTS  
SUBSEQUENT EVENTS

Note 18 - Subsequent Events


The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued.  The Management of the Company determined that there were certain reportable subsequent events to be disclosed as follows:


Convertible Notes Payable


The Company executed convertible notes in January 2012 (two notes) and March 2012 (one note) for $75,000 each, bearing interest at 4% per annum, maturing on January 3, 2013, January 31, 2013 and March 2, 2013, respectively, per a term sheet executed in November 2011 with an investor firm. A broker fee of 12% was deducted from each tranche and the notes include a 15% prepayment penalty (see Note 13). In March 2012, the investor firm notified the Company that it has elected to terminate the term sheet and no further closings will occur.  


Sale of Shares of Common Stock


In January 2012, the Company sold to one individual certain units which contained common stock and warrants. The Company issued 3,418,804 shares of its common stock at $0.014625 per share and warrants to purchase 1,709,402 shares of the Company's common stock, exercisable at $0.03 per share that expire in January 2015.


In February 2012, the Company sold to two individuals certain units which contained common stock and warrants. The Company issued 4,444,444 shares of its common stock at $0.01125 per share and 2,717,391 shares if its common stock at $0.0184 per share, and warrants to purchase 2,222,222 shares and 1,358,696 shares of the Company's common stock, respectively, exercisable at $0.03 per share that expire in February 2015.


In March 2012, the Company issued 1,000,000 shares of its common stock at $0.025 per share and warrants to purchase 500,000 shares of the Company's common stock, exercisable at $0.04 per share that expire three years from the date of issuance per the October 2011 sale of certain units that contained common stock and warrants (see Note 14).  


Issuance of Common Stock for Services


Per the terms of a consulting agreement the Company executed with a consulting firm whereby the consultant will receive a success fee, in the form of restricted shares of the Company's common stock, of 6% of all monies invested in the Company as a result of a term sheet the Company executed with an investor firm in November 2011, the consultant received 264,705 shares in January 2012, 276,073 shares in February 2012 and 321,428 shares in March 2012, valued at $4,500 per issuance, as a result of the second, third and fourth investor tranches of $75,000 each (see Notes 13 and 14).


In January 2012, the Company issued 2,000,000 restricted shares of its common stock, valued at market, to a consultant in consideration of the consultant's continual support of the Company through several areas of assistance.


Issuance of Common Stock for Settlement of Trade Payables


In March 2012, the Company issued 1,800,000 shares of its common stock, valued at $0.015 per share, to a vendor for settlement of trade payables (see Notes 13 and 14).


Issuance of Common Stock for the Settlement of Aged Debt


In January 2012, the Company and its former President agreed to settle the remaining balance due to him of $20,975 in exchange for the issuance of 1,498,214 restricted shares of the Company's common stock, valued at $0.014 per share (see Note 13).


Per the terms of a settlement agreement that the Company executed with a note holder in January 2012, the Company issued 5,058,060 unrestricted shares of its common stock, valued at $0.0165 per share, to the note holder for the settlement of a $70,000 promissory note with an original maturity date of April 23, 2010 (see Note 8).


Issuance of Warrants for Services


In January 2012, the Company executed a development agreement with a consultant, whereby the consultant will receive a monthly payment of $5,000 and warrants to purchase 150,000 shares of the Company's restricted common stock. The warrants are exercisable at $0.03 per share and expire three years from issuance. The term of the agreement is month-to-month, with automatic monthly renewals unless terminated in writing by either party. The agreement was amended in February 2012 whereby the exercise price of the warrants was lowered to $0.02 per share. The consultant received 150,000 warrants in January 2012, exercisable at $0.03 per share, and 150,000 warrants in February and March 2012, respectively, exercisable at $0.02 per share.


Commitments and Contingencies


In February 2012, the Company executed a marketing agreement with a consultant whereby the consultant will receive up to a 50% commission on contracted revenue commitments. The consultant may elect to receive up to 50% of its earned commissions in the form of restricted shares of the Company's common stock valued at the trailing five day average market stock price as of the end of the day of the contracted revenue commitment, providing the maximum number of shares issued in any one year does not exceed 5,000,000 shares. The consultant is eligible to receive an annual performance incentive in the form of additional restricted shares of the Company's common stock as follows: 1,000,000 shares if revenue commitments exceed $1,000,000, 2,000,000 shares if revenue commitments exceed $2,000,000, 3,000,000 shares if revenue commitments exceed $3,000,000 and 4,000,000 shares if revenue commitments exceed $4,000,000. As of March 22, 2012, no commissions have been paid relating to the agreement.