STOCKHOLDERS EQUITY (DEFICIT)

12 Months Ended

Dec. 31, 2012

STOCKHOLDERS EQUITY (DEFICIT) [Text Block]

15. 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.

There were no stock options exercised during 2012 or 2011.

During 2011, the Company issued of 82,418 shares (valued at $11,538) of common stock to a current board member and the executive officers for payment for services rendered to the Company.

Deferred Stock Units

During the years ended December 31, 2012 and 2011, 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 2012 and 2011. Accordingly, during 2012 and 2011, the Company credited a total of 2,554,637 and 1,004,694 DSUs, respectively, to its non–executive directors, and recognized compensation expense of $105,000 and $105,000, respectively, related to the issuance of these DSUs. During 2012 and 2011, 310,977 and 280,357 DSUs, respectively, were converted into common shares. As of December 31, 2012 and 2011, there were 4,382,900 and 2,139,240 DSUs outstanding, respectively.

Warrants

During 2012, all of the outstanding warrants expired unexercised. 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 had exercise prices of $.38 and $1.10 per share, respectively. As of December 31, 2012, there were no warrants outstanding.