Capital Stock

6 Months Ended

Jun. 30, 2012

Capital Stock

Capital Stock

Note 15. Capital Stock

Authorized capital stock of the Company consists of 200,000,000 common shares with par value of $0.001 per share and 50,000,000 preferred shares with par value of $0.001 per share. 

On January 10, 2012, the Company issued 100,000 shares, par value $0.001 per share, to a consultant of the Company as payment for consulting fees valued at $10,000. 

On January 20, 2012, the Company issued 83,333 shares, par value $0.001 per share, to an officer of the Company as payment of bonus valued at $2,500. 

On January 20, 2012, the Company issued 130,000 shares, par value $0.001 per share, to two consultants of the Company as payment of consulting fees valued at $32,500. As at June 30, 2012, $1,356 was included in prepayments.  

On February 9, 2012, the Company issued 225,000 shares, par value $0.001 per share, to six consultants of the Company as payment of consulting fees valued at $22,500. 

On February 16, 2012, the Company issued 163,333 shares, par value $0.001 per share, to an officer of the Company as payment of salary and bonus valued at $10,500. 

On March 26, 2012, the Company issued 120,141 shares, par value $0.001 per share, to an officer of the Company as payment of salary and bonus valued at $6,917. 

On April 10, 2012, the Company issued 120,000 shares, par value $0.001 per share, to a consultant of the Company as payment for consulting fees valued at $30,000. As at June 30, 2012, $17,500 was included in prepayments. 

On May 1, 2012, the Company issued 117,001 shares, par value $0.001 per share to an officer of the Company as payment of salary and bonus valued at $10,917. 

On May 17, 2012, the Company issued 28,000 shares, par value $0.001 per share, to a consultant of the Company as payment for consulting fees valued at $7,000. 

On May 30, 2012, the Company issued 125,001 shares, par value $0.001 per share, to an officer of the Company as payment of salary and bonus valued at $12,917. 

On June 1, 2012, the Company issued 300,000 shares, par value $0.001 per share, to two consultants of the Company as payment of consulting fees valued at $39,000. As at June 30, 2012, $23,833 was included in prepayments. 

On June 21, 2012, the Company issued 75,000 shares, par value $0.001 per share, to two consultants of the Company as payment of consulting fees valued at $12,750. As at June 30, 2012, $7,938 was included in prepayments. 

On June 27, 2012, the Company issued 125,001 shares, par value $0.001 per share to an officer of the Company as payment of salary and bonus valued at $12,917. As at June 30, 2012, $12,917 was included in prepayments. 

On November 18, 2011, the Company completed its acquisition of daifu (Note 1). Pursuant to the Share Exchange Agreement, the daifu shareholders transferred all of the daifu ordinary shares outstanding to Rotoblock in exchange for issuance of 73,801,525 common shares of Rotoblock, par value $0.001 per share, to the daifu shareholders. 

As at January 1, 2011, daifu had 96,073,105 common shares issued and outstanding. During the year ended December 31, 2011, daifu issued 283,318 common shares in settlement of certain debt obligations of daifu, and also issued 10,000,000 common shares at $0.01 per share upon exercise of original daifu stock options. The 96,073,105 shares outstanding on January 1, 2011 and 10,283,318 shares issued by daifu during the year ended December 31, 2011 are adjusted for presentation in the consolidated financial statements to 66,665,853 and 7,135,672 respectively to reflect the ratio of shares exchanged between Rotoblock and daifu. 

 As at November 18, 2011, 5,706,977 outstanding shares of the Company were owned by the original Rotoblock shareholders before the Share Exchange Agreement with daifu. 

During the year ended December 31, 2011, daifu redeemed its outstanding preferred stock at a price of $4,310,000. 

As a result of the reverse acquisition of daifu, the Company changed its year end from April 30 to December 31. On April 30, 2011, the Company had 5,710,311 shares outstanding. 

On January 7, 2011, the Company issued 3,334 common shares valued at $nil per common share in error. On July 14, 2011, the Company cancelled these shares and is in the process of obtaining the common shares to be returned to treasury for cancellation. 

On December 15, 2011 the Company filed a Form S-8 Registration Statement with the SEC to register 10 million shares of our common stock for future issuances to consultants, employees, attorneys, officers and directors. As at June 30, 2012,878,000 shares have been issued under the plan. 

Share Purchase Warrants 

On January 20, 2012, the Company granted 1,000,000 warrants to an officer of the Company as part of the officer’s compensation package. The warrants entitle the officer to purchase up to 1,000,000 shares of the Company at a price of $0.25 per share up to January 20, 2017. 

The following share purchase warrants were outstanding at June 30, 2012: 

	Exercise price	Number of warrants	Remaining contractual life (years)
	$
Warrants	12.50	7,600	0.19
Warrants	7.50	20,000	0.75
Warrants	7.50	16,000	0.89
Warrants	12.50	3,333	1.01
Warrants	0.25	25,000	2.04
Warrants	0.25	25,000	2.06
Warrants	0.50	200,000	2.06
Warrants	2.50	57,144	2.06
Warrants	0.25	2,181,750	2.62
Warrants	1.00	50,000	2.62
Warrants	0.25	333,333	2.66
Warrants	1.00	300,000	2.71
Warrants	0.25	12,000	2.79
Warrants	0.25	1,000,000	4.56
Warrants	0.25	6,000,000	7.72
		10,231,160

The following is a summary of warrant activities during the six month period ended June 30, 2012: 

	Number of warrants	Weighted average exercise price
		$
Outstanding and exercisable at December 31, 2011	9,231,160	0.34
Granted	1,000,000	0.25
Outstanding and exercisable at June 30, 2012	10,231,160	0.33
Weighted average fair value of warrants granted during the year		0.04

The weighted average grant date fair value of the 1,000,000 warrants granted on January 20, 2012 was determined using the Black-Scholes Option Pricing Model and the following assumptions:

Risk free interest rate	0.91%
Expected life	5.0 years
Annualized volatility	526.57%
Expected dividends	-

Restricted Common Shares

As at June 30, 2012, a total of 81,220,312 common shares are outstanding. Of these, 74,676,670 were restricted from trading as defined under Rule 144 of the United States Securities Act of 1933.