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STOCK ISSUANCE LIABILITY
9 Months Ended
Feb. 29, 2012
Stock Issuance Liability [Abstract]  
Stock Issuance Liability [Text Block]

NOTE 7.   STOCK ISSUANCE LIABILITY

 

Three promissory notes totaling $2,450,000 issued on May 24, 2011 contained provisions that required Black Rock to deliver to the note holders an aggregate of 600,000 shares of Red Mountain common stock as an inducement to the note holders to make the loans. The Company recorded a liability in the amount of $600,000 as the reverse merger had yet to be consummated. The Company has treated the amount as a debt discount, and is amortizing the amount over the life of the loans. During the quarter ended November 30, 2011, the remaining unamortized cost of $129,235 was amortized to interest expense. The Company believes that $1.00 per share represented the fair value per share of the common stock of Red Mountain at the time of issuance.

 

The Company’s four non-employee directors are entitled to receive $50,000 worth of shares of the Company’s common stock at a price equal to the last sales price of the Company’s common stock on the date of issuance, of which, $67,945 was accrued as of February 29, 2012.