Note 9 - Stockholders' (Deficit) Equity

12 Months Ended

Dec. 31, 2012

Notes

Note 9 - Stockholders' (Deficit) Equity

Note 9 – Stockholders’(Deficit) Equity

The Company has one class of stock, common, which has a par value of $0.001 per share. The Company has authorized up to 50,000,000 shares to be issued. During 2011, the Company implemented a 1 for 3 reverse share split of its shares. This transaction had the effect of reducing the number of outstanding shares from 38,874,291 to 12,958,135. The previous periods were adjusted to reflect the stock split.

Issuance of Founders’ Stock - Shortly after the formation of the Company in 2009, a total of 7,300,667 shares were issued to founders of the Company and others at the direction of the founders.

Sales of Common Stock - During 2009, the Company raised gross proceeds of approximately $460,000 through the sale of 880,000 shares of its common stock to accredited investors at an average price of $0.52 per share. The sale of these shares took place throughout 2009. The Company incurred stock issuance costs in the period that totaled $40,825 of which $30,825 was from the issuance of 33,333 shares to brokers in exchange for services related to the share offering.

During 2010, the Company raised gross proceeds of approximately $653,000 through the sale of 1,282,005 shares of its common stock to accredited investors at an average price of $0.51 per share. The Company incurred stock issuance costs in the year that totaled $12,160.

During 2011, the Company raised gross proceeds of approximately $1.7 million through the sale of 6,857,538 shares of its common stock at an average price of $0.26 per share.  These sales of shares occurred at various times throughout 2011.  The Company incurred stock issuance costs of approximately $111,775 consisting chiefly of commissions paid to broker-dealers who assisted with the offering.  In addition to the cash issuance costs 1,698,318 shares of the Company’s common stock were issued to the lead advisor as per a contractual arrangement.

During 2012, the Company raised gross proceeds of approximately $846,841 through the sale of 2,457,498 shares of its common stock to accredited investors in a private placement at an average price of $.35 per share.  The Company incurred stock issuance costs of approximately $44,360 consisting chiefly of commissions paid to broker-dealers who assisted with the offering.

Shares issued with the conversion of long-term debt in 2011- The Company converted all of its long-term debt to shares of its common stock.  These conversions happened throughout 2011 and are summarized in the table below.

Note Holder	Principal	Accrued Interest	Debt Amounts Converted in 2011	Shares of Common Stock Received	Price per Share
Trunity LLC	$1,800,000	$    0	$1,800,000	7,200,000	$0.25
Note Payable to Founders	855,379	137,621	993,000	3,972,000	0.25
Notes payable -related parties	$2,655,379	$137,621	$2,793,000	$11,172,000	$0.25
8% Convertible Notes	616,500	76,811	693,311	577,759	1.20
9% Convertible Notes	437,500	0	437,500	1,458,333	0.30
Note held by outside investor	100,000	40,000	140,000	560,000	0.25
Notes payable to investors	$1,154,000	$116,811	$1,270,811	$2,596,092	$0.49
Total Notes Payable	$3,809,379	$254,432	$4,063,811	$13,768,092	$0.30

Common stock committed not yet issued – On December 29, 2011, the Company entered into a payment agreement and mutual release with an investment-banking firm that had been hired to provide strategic guidance and secure investors in the Company. The settlement calls for the Company to pay the firm $25,000 upon the Company’s next capital raise, and to issue the firm 100,000 shares of common stock.  The Company valued the shares at $0.25 and has reflected this $50,000 total settlement as an administrative expense in the statement of operations. The Company issued these shares to the investment firm in early 2012.

Reverse Merger Transaction -  Trunity acquired a 90.1% interest in Brain Tree International, Inc., a Utah corporation (“BTI”), pursuant to a Stock Purchase Agreement with the three principal shareholders of Trunity Holdings, Inc., 961,974 of BTI shares were purchased for the price of $325,000 plus 325,000 shares of Trunity common stock. As part of the transaction, on January 24, 2012, immediately prior to the Merger, BTI reincorporated in Delaware and changed its name from Brain Tree International, Inc. to Trunity Holdings, Inc. Pursuant to the reincorporation, 105,064 minority shares of BTI automatically converted into the same number of shares of THI.

Warrants for Services - During the year ended December 31, 2012, in connection with services rendered, the Company issued warrants to purchase 250,000 and 25,000 shares of the Company’s common stock at an exercise price of $0.50 and $0.25 per share, respectively. The Company recognized expense of $37,453 related to warrants granted for services rendered during the period and valued them at the grant date using the Black Scholes valuation model.