Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS DEFICIT

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STOCKHOLDERS DEFICIT
 9 Months Ended
Sep. 30, 2011
STOCKHOLDERS DEFICIT  
STOCKHOLDERS DEFICIT

NOTE 12 - STOCKHOLDERS’ DEFICIT

 

During the quarter ended March 31, 2011, the Company issued 1,866,667 shares of common stock and received proceeds of $180,000 for the exercise of warrants.  In addition, the Company issued 400,000 shares of common stock and received proceeds of $50,000 from investors.  Pursuant to a private placement, convertible debentures were issued during the quarter ended March 31, 2011, for which a discount of $62,500 was recorded, and warrants to purchase 1,240,000 shares of common stock were repriced, resulting in deferred finance costs of $57,706.   Finally, the Company issued 100,000 shares of common stock for services, valued at $25,000.

 

During the quarter ended June 30, 2011, the Company issued 740,000 shares of common stock and received $92,500 in proceeds from investors.  The Company issued 500,000 shares of common stock and received $50,000 in proceeds upon the exercise of warrants.  Pursuant to a private placement, convertible debentures were issued during the quarter ended June 30, 2011, for which a discount of $52,000 was recorded. The Company issued warrants to purchase 75,000 shares of common stock valued at $8,584 for services, and issued 333,334 shares of common stock in satisfaction of an obligation to issue common stock valued at $50,000.

 

During the quarter ended September 30, 2011, the Company issued 1,100,000 shares of common stock and received $130,000 in proceeds from investors.  The Company issued 16,000 shares of common stock upon the cashless exercise of 24,000 common stock warrants.  Pursuant to a private placement, convertible debentures were issued during the quarter ended September 30, 2011, for which a discount of $15,921 was recorded. In addition, in July, 2011, the Company issued a significant shareholder, Chris. Maggiore, warrants to purchase 3,000,000 shares at an exercise price of $.25 per share for a term of three years.  These warrants were issued to Mr. Maggiore in consideration Mr. Maggiore providing financing to the Company which prevented him from being able to avail himself of a company offer to certain warrant holders to exercise their warrants on a reduced exercise price basis.  The Company recognized finance costs of $203,069 in connection with the grant.

 

A summary of the status of the Company’s warrants is presented below.

 

 

September 30, 2011

December 31, 2010

 

 Number of

 Weighted Average

 Number of

 Weighted Average

 

 Warrants

 Exercise Price

 Warrants

 Exercise Price

Outstanding, beginning of year

      15,856,999

 $                   0.17

    22,723,401

 $                 0.50

Issued

        7,799,000

                      0.17

      3,880,000

                    0.21

Exercised

       (2,740,000)

                      0.10

     (9,951,402)

                    0.13

Repriced $.15 warrants

        1,240,000

                      0.15

 

 

Repriced $.25 warrants

       (1,240,000)

                    (0.25)

 

 

Expired

       (3,258,666)

                      0.09

       (795,000)

                    0.50

 

 

 

 

 

Outstanding, end of period

      17,657,333

 $                   0.20

    15,856,999

 $                 0.17

 

 

Warrants outstanding and exercisable by price range as of September 30, 2011 were as follows:

 

 

 Outstanding Warrants

 Exercisable Warrants

 

 

 

 

 

 

 

 

 Average  

 

 

 

 

 

 Weighted

 

 

 

 

 

 Remaining

 

 

 Weighted

 

 

 Contractual

 Exercise

 

 Average

 Range of

 Number

 Life in Years

 Price

 Number

 Exercise Price

 

 

 

 

 

 

0.10

1,170,000

.79

0.10

1,170,000

$              0.10

0.125

4,724,000

2.61

0.125

4,724,000

0.125

0.15

3,323,333

1.29

0.15

3,223,333

0.15

0.225

600,000

2.32

0.225

600,000

0.225

0.25

6,825,000

1.59

0.25

6,825,000

0.25

0.50

1,015,000

1.24

0.50

1,015,000

0.50

 

 

 

 

 

 

 

17,657,333

1.76

 

17,657,333

$              0.12