COMMON STOCK

6 Months Ended

Dec. 31, 2011

Notes to Financial Statements

COMMON STOCK

The Company has authorized 100,000,000 shares of $0.001 par value per share Common Stock, of which 33,570,770 were issued outstanding as of December 31, 2011. The activity surrounding the issuances of the Common Stock is as follows: 

For the Six Months Ended December 31, 2011

The Company issued 635,335 shares of Common Stock for net cash proceeds of $371,664. The Company paid $41,266 in cash offering costs. Offering costs have been recorded as reductions to additional paid-in capital from Common Stock proceeds.

The Company issued 625,103 shares of Common Stock valued at $371,664 to non-employees in advance of services. The shares of common stock were valued based on the quoted market price on the date of issuance. The Company also issued 500,856 shares of Common Stock to convert $100,000 in convertible notes payable and $167,003 in accrued liabilities. The difference between the fair market value of the stock on the date of conversion of the accrued liabilities resulted in a gain on conversion of these liabilities of $191. An additional 136,000 shares of Common Stock were issued to convert 66,000 shares of Convertible Preferred Stock and accrued dividends of $2,296.

As share-based compensation to employees and non-employees, the Company issued 585,626 shares of Common Stock valued at $358,859, based on the market price of the stock on the date of issuance.   As interest expense on outstanding notes payable, the Company issued 171,668 shares of Common Stock valued at $142,922 based on the market price on the date of issuance.