• Filing Date: 2013-04-12
  • Form Type: 10-K
  • Description: Annual report
v2.4.0.6
STOCKHOLDERS EQUITY
12 Months Ended
Dec. 31, 2012
STOCKHOLDERS EQUITY  
STOCKHOLDERS EQUITY

NOTE 12 - STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

As of May 2008, all shares of Series A preferred stock were converted into common stock. There are currently 5,000,000 shares of Preferred Stock authorized, with no shares of Series A Preferred Stock currently issued or outstanding.

 

Effective June 24, 2010, the Company filed a Certificate of Designations, Number, Voting Power, Preferences and Rights of Series B Convertible Redeemable Preferred Stock (the “Certificate”) with the Texas Secretary of State, designating 75,000 shares of Series B Preferred Stock, par value $10.00 per share (the “Series B Shares”). The Series B Shares rank senior to shares of all other common and preferred stock with respect to dividends, distributions, and payments upon dissolution.  Each of the Series B Shares is convertible at the option of the holder into shares of common stock as provided in the Certificate.  There are currently no Series B Shares issued or outstanding.

 

Common Stock

 

The Company is authorized to issue 100,000,000 common shares at a par value of $0.001 per share.  At December 31, 2011, there were 58,754,110 shares issued and 58,750,021 shares outstanding.  At December 31, 2012, there were 68,782,470 shares issued and 68,778,381 shares outstanding. Of these shares, 4,089 shares are held by the Company as treasury stock as of December 31, 2011 and December 31, 2012, respectively.

 

Warrants

In October 2009, warrants issued with debt to an unrelated party were increased from 500,000 A warrants to 1,000,000 A warrants.  The exercise price of $3.50 per share for the A warrants was reduced to $2.00 per share.  The B warrants issued to the same unrelated party were 1,000,000 warrants at an exercise price of $0.001 per share and, of this amount, 700,233 warrants have been exercised leaving 299,767 B warrants remaining.  Both the A and B warrants expire in 2013.

 

 

During 2010, the Company entered into various Subscription Agreements with unrelated parties to purchase units (“Units”) with each Unit consisting of:   (i) one share of the Company’s common stock and (ii) a warrant to purchase one share of the Company’s common stock (the “Warrants”). 

 

During 2011 and 2012, the Company entered into various Subscription Agreements and Note Payable Agreements which included the issuance of stock purchase warrants in the agreements.  Additionally, in the third quarter of 2012 the Company issued 850,000 stock purchase warrants to employees and contractors as well as 3,193,500 warrants to board members.  The warrants are exercisable over a 5 year period at $0.15 per share. The warrants issued to employees and contractors vest over a three year period based upon continued employment with the Company.

 

At December 31, 2011, there were 8,938,668 warrants outstanding with a weighted average exercise price of $0.82.

At December 31, 2012, there were 17,143,468 warrants outstanding with a weighted average exercise price of $0.53.

 

A summary of the status of the warrants granted at December 31, 2012 and 2011 and changes during the years then ended is presented below:

 

 

For the Year Ended December 31, 2011

 

 

Shares

 

 

Weighted Average

Exercise Price

 

Outstanding at beginning of period

 

 

3,230,369

 

 

$

1.07

 

Granted

 

 

5,708,299

 

 

$

0.68

 

Exercised

 

 

-

 

 

 

-

 

Forfeited

 

 

-

 

 

 

-

 

Expired

 

 

-

 

 

 

-

 

Outstanding at end of period

 

 

8,938,668

 

 

$

0.82

 

 

 

For the Year Ended December 31, 2012

 

 

Shares

 

 

Weighted Average

Exercise Price

 

Outstanding at beginning of period

 

 

8,938,668

 

 

$

0.82

 

Granted

 

 

7,364,800

 

 

$

0.18

 

Exercised

 

 

160,000

 

 

$

0.10

 

Forfeited

 

 

-

 

 

 

-

 

Expired

 

 

-

 

 

 

-

 

Outstanding at end of period

 

 

17,143,468

 

 

$

0.50

 

 

 





   

 

As of December 31, 2012

As of December 31, 2012

 

Warrants Outstanding

Warrants Exercisable

 

Number

Outstanding

Weighted-

Average

Remaining

Contract Life

Weighted-

Average

Exercise Price

Number

Exercisable

 

Weighted-

Average

Exercise Price

Range of

Exercise Prices

 

$

0.001

299,769

0.0

$

0.001

299,769

$

0.001

 

$

0.075

350,000

5.0

$

0.075

350,000

$

0.075

 

$

0.09

600,000

5.0

$

0.09

225,000

$

0.09

 

$

0.15

6,614,800

4.7

$

0.15

4,764,800

$

0.15

 

$

0.25

200,000

2.8

$

0.25

200,000

$

0.25

 

$

0.40

1,299,999

2.2

$

0.40

1,299,999

$

0.40

 

$

0.50

2,694,450

1.5

$

0.50

2,694,450

$

0.50

 

$

0.60

975,000

4.0

$

0.60

975,000

$

0.60

 

$

0.75

200,000

2.8

$

0.75

200,000

$

0.75

 

$

1.00

2,909,450

1.3

$

1.00

2,909,450

$

1.00

 

$

2.00

1,000,000

1.0

$

2.00

1,000,000

$

2.00

 

$

0.001  - 2.00

17,143,468

3.0

$

0.53

14,918,468

$

0.56