STOCKHOLDERS EQUITY (DEFICIT)

12 Months Ended

Dec. 31, 2011

STOCKHOLDERS EQUITY (DEFICIT) [Text Block]

16. STOCKHOLDERS’ EQUITY (DEFICIT)

Authorized Shares

In June 2011, the stockholders adopted a resolution approving an amendment to the Company’s Amended Certificate of Incorporation to increase the number of authorized shares of common stock from 200,000,000 to 400,000,000. Accordingly, on August 1, 2011, the Company increased the number of authorized shares of Common Stock from 200,000,000 to 400,000,000.

Common Stock

On November 5, 2009, the Company completed an unregistered brokered private placement of 40 million units (the “Units”) for total gross proceeds to the Company of $12,000,000. In connection with the offering, the Company paid the agents of the offering a commission equal to $600,000, or 5% of the gross proceeds of the offering. After deducting additional offering expenses of $162,191, the Company received net proceeds of $11,237,809. Each Unit, priced at $0.30 per Unit, consists of one common share (each a “Share”) and one common share purchase warrant (each a “Warrant”). Each Warrant entitles the holder to purchase one additional common share of the Company at a price of $0.38 per share until June 5, 2012. The Warrants provide for adjustments in the event of stock dividends, subdivisions, consolidations, and other forms of capital reorganization. As of December 31, 2011, the total 40,000,000 warrants are still outstanding.

There were no stock options exercised during 2011. During 2010, 451,667 stock options were exercised resulting in net proceeds of $40,650.

During 2011 and 2010, the Company issued a total of 82,418 and 621,398 shares, respectively, of common stock to a current board member and the executive officers for payment for services rendered to the Company. The total value of these shares was for the years ended December 31, 2011 and 2010 is $11,538 and $67,590, respectively.

Deferred Stock Units

During the years ended December 31, 2011 and 2010, certain equity–based fees were paid to the Company’s non–executive directors in the form of awards issued pursuant to the Company’s 2006 Stock Incentive Plan. The non–executive directors have limited rights, exercisable within applicable time limits, to elect to have any percentage of such awards, and any percentage of cash fees, payable in deferred stock units (“DSUs”). Each of the Company’s non–executive directors exercised such rights in respect of the equity–based fees payable to them for 2011 and 2010. Accordingly, during 2011 and 2010, the Company credited a total of 1,004,694 and 987,500 DSUs, respectively, to its non–executive directors, and recognized compensation expense of $105,000 and $117,500, respectively, related to the issuance of these DSUs. During 2011 and 2010, 280,357 and 306,201 DSUs, respectively, were converted into common shares. As of December 31, 2011 and 2010, there were 2,139,240 and 1,414,900 DSUs outstanding, respectively.

Warrants

As of December 31, 2011, there were a total of 55,333,350 warrants, to purchase common shares of the Company at an average exercise price of $0.58 per share; 40,000,000 and 15,333,350 warrants have exercise prices of $.38 and $1.10 per share, respectively. As of December 31, 2010, there were a total of 56,064,830 warrants, to purchase common shares of the Company at an average exercise price of $0.58 per share; 731,480, 40,000,000 and 15,333,350 warrants have exercise prices of $.30, $.38 and $1.10 per share, respectively. As of December 31, 2011, 55,333,350 warrants expire in June 2012.