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Note 14 - Subsequent Events
12 Months Ended
Jun. 30, 2013
Subsequent Events [Abstract]  
Note 14 - Subsequent Events

NOTE 14 – SUBSEQUENT EVENTS

 

On August 12, 2013, the Company entered into a Placement Agent Agreement with Palladium Capital Advisors, LLC (“Palladium”) whereby Palladium agreed to act as the Company’s non-exclusive agent in a private placement or similar unregistered transaction of equity or equity-linked securities of the Company.   The Agreement is for a period of twelve months from the date of execution.   The Company shall pay to Palladium, upon the closing of each transaction with investors, (i) seven  percent (7%) of the aggregate consideration raised in each closing in cash; (ii) three percent (3%) of the aggregate consideration in shares of the Company’s common stock, calculated based upon the price of the common stock as offered in each transaction; and (iii) warrants to purchase seven (7%) of the Company’s common stock at each closing, identical to any warrants issued to investors.  The foregoing fees are payable for any sale of securities during the twelve month term or within twenty-four months thereafter with respect to investors identified by Palladium.  The Company is further required to pay expenses incurred by Palladium, including the fees and expenses of its legal counsel and any advisor retained by Palladium.  Fees and expenses in excess of $15,000 require prior written authorization from the Company.    On September 9, 2013, the Company closed a financing with five subscribers as described below and paid to Palladium cash consideration of $42,000, share consideration by way of the issuance of 120,000 shares of common stock of the Company and issued a total of 280,000 stock purchase warrants, each warrant exercisable at $0.30 per share for a period of five years from the date of issuance.


On July 11, 2013 we issued total of 188,888 units at a price of $0.45 per unit. The private placement was undertaken pursuant to certain private placement agreements (see Note 6 (2) above).

 

On September 9, 2013, the Company entered  into securities purchase agreements (the “SPA”) to raise a total $600,000 with five accredited investors introduced by Palladium to the Company.   Under the terms of the SPA, the purchasers subscribed for a total of 4,000,000 shares of the common stock of the Company at $0.15 per share and an equal number of warrants exercisable at $0.30 per share for a period of five years.    Under the SPA the purchasers have the option to purchase up to an equal number of shares and warrants as those purchased on the initial closing for a period of nine months from the initial closing date.  Each purchaser shall be entitled to one closing on the exercise of the subsequent closing option warrants have piggy back registration rights.   Subject to no  effective registration statement registering the warrants within 180 days after the initial exercise date of the warrants, then the warrants shall have a cashless exercise provision. The warrants further have exercise limitations of 4.99% as a beneficial ownership limitation which the holder may increase or decrease upon 61 days prior notice to the Company, however, the beneficial ownership limitation shall not exceed 9.99% of the number of shares held by the holder.

 

Under the terms of the SPA, the purchasers that hold outstanding stock or warrants  at the time of any subsequent funding have the right to participate in any subsequent financing up to 100% of the subsequent financing on the terms negotiated with any funders for a period of eighteen months from the date of the SPA.   Further, the shares of common stock issued under the SPA have a purchase price reset until the sooner of (i) the purchaser no longer holds and securities, and (ii) five years after the initial closing date whereby should the Company issue or sell any shares of common stock or any common stock equivalent at a price less than the per share purchase price(the Dilutive Financing”), then the Company shall issue additional shares of common stock to the purchasers who hold outstanding shares on the date of such Dilutive Financing for no additional consideration.  The warrants also have a warrant dilution adjustment which requires the issuance of additional warrant shares to reflect any dilutive financing undertaken by the Company whereby the holders of any outstanding warrants shall receive additional warrants based on the price of the Dilutive Financing.


On September 9, 2013, the Company entered into a unit subscription agreement with Big North Graphite Corp., whereby the Company acquired a total of 2,666,667 units at $0.075 per unit, each unit consisting of one shares and one half of one warrant.  Each one warrant entitles the holder to purchase one warrant share for a period of twenty-four months (24) from closing at a price of $0.12 per warrant share.  On September 19, 2013, the Company and Big North Graphite Corp. (“Big North”) agreed to rescind and cancel the above described previously announced expedited private placement (the “Offering”) of 2,666,667 units for gross proceeds of $200,000 (see Form 8-K filed with the Securities and Exchange Commission on September 16, 2013).  The proceeds paid by the Company in connection with the Offering have been returned by Big North to the Company.  No shares were issued to the Company by Big North and no shares will be issued as the Offering will not be finalized.


On September 12, 2013 the Company entered into an agreement with an Investor Relations consulting firm whereby in consideration for management consulting, business advisory, shareholder information and public relations services, the Company agreed to pay $40,000 and issue 250,000 shares of restricted common stock.