Changes in Stockholder's Equity (Deficit)

6 Months Ended

Jun. 30, 2012

Changes in Stockholder's Equity (Deficit) [Abstract]

Changes in Stockholder's Equity (Deficit)

Note 13 - Changes in Stockholder's Equity (Deficit)

On June 15, 2012, the Company's CEO, holding more than two-thirds voting power of the Company's voting stock, voted to amend the Company's Articles of Incorporation and increase the number of authorized shares of the Company's Class A Common Stock from 60 million shares to 300 million shares, along with the establishment of 40 million shares of "blank check" preferred stock, which was designated into 1,000 shares of Series A and 1,000 Series B Preferred Stock. The amendment did not have any effect on the 60 million authorized shares of Class B Common stock. Accordingly, the Articles of Incorporation were subsequently amended on June 25, 2012, and 1,000 shares of series A convertible stock were designated, along with 1,000 shares of series B convertible stock.

Convertible Preferred Stock, Series A

The Company has 1,000 authorized shares of $0.01 par value Series A Convertible Preferred Stock ("Series A Preferred Stock"). The Series A Preferred Stock accrues dividends equal to 1.5% of the Company's revenues per quarter, beginning on January 1st of any calendar year in which the Company has generated revenue over $1 million, and an additional 6% of the Company's net income beginning on January 1st of any calendar year in which the Company has generated net income over $2 million. The dividends are payable at the discretion of the Company, provided that any unpaid dividends accrue until paid. The Series A Preferred Stock includes a liquidation preference equal to $0.01 per share, plus any accrued and unpaid dividends. The Series A Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 60% of the total number of then issued and outstanding shares of Class A Common Stock. The Series A Preferred Stock has limited voting rights, relating solely to matters which adversely affect the rights of the Series A Preferred Stock holders.

Convertible Preferred Stock, Series B

The Company has 1,000 authorized shares of $0.01 par value Series B Convertible Preferred Stock ("Series B Preferred Stock"). The Series B Preferred Stock accrues dividends equal to 1.5% of the Company's revenues per quarter, beginning on January 1st of any calendar year in which the Company has generated revenue over $1 million, and an additional 6% of the Company's net income beginning on January 1st of any calendar year in which the Company has generated net income over $2 million. The dividends are payable at the discretion of the Company, provided that any unpaid dividends accrue until paid. The Series B Preferred Stock includes a liquidation preference equal to $0.01 per share, plus any accrued and unpaid dividends. The Series B Preferred Stock is convertible, at the option of the holder into shares of the Company's Class A Common Stock, with five business days' notice into 10% of the total number of then issued and outstanding shares of Class A Common Stock, provided that no conversion will take place until all holders of the Series B Preferred Stock consent to such conversion. The Series B Preferred Stock has limited voting rights, relating solely to matters which adversely affect the rights of the Series B Preferred Stock holders.

Common Stock, Class A

The Company has 300,000,000 authorized shares of $0.01 par value class A common stock.

Common Stock, Class B

The Company has 60,000,000 authorized shares of $0.01 par value class B common stock. The class B common stock carries preferential voting rights of 100 votes to each series A vote (100:1).

Series A Common Stock Issuances

On March 13, 2012, the Company issued 1,075,269 shares of its $0.01 par value class A common stock pursuant to the partial conversion in the amount of $10,000 of a $50,000 convertible debt, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

On June 26, 2012, the Company issued 1,538,462 shares of its $0.01 par value class A common stock pursuant to the partial conversion in the amount of $10,000 of a $50,000 convertible debt, which consisted entirely of principal. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.