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STOCKHOLDERS' EQUITY
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6 Months Ended | |||||||||||||||||
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Jun. 30, 2012
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| Stockholders' Equity Note [Abstract] | ||||||||||||||||||
| Stockholders' Equity Note Disclosure [Text Block] |
The Company has 20,000,000 shares of its $0.0001 par value common stock authorized, 3,955,511 shares issued and 3,698,896 shares outstanding at June 30, 2012 and had 200,000,000 shares of its $0.0001 par value common stock authorized, 1,506,061 shares issued and 1,249,446 shares outstanding at December 31, 2011.
Effective May 11, 2012, the Company's common stock was reverse split, 1 share for each 2 shares issued, pursuant to approval of a majority of the Company's shareholders. All share references have been adjusted as if the split occurred prior to all periods presented.
2012 Transactions
On May 8, 2012, the Company issued 5,000 shares of its common stock in exchange for services to be performed over a six month period and valued at $32,400. This is being amortized over six months and in the period ending June 30, 2012, $9,406 has been expensed.
EQUITY RAISE
The Company filed a Form S-1 Registration Statement under the Securities Act of 1933 which was declared effective on June 21, 2012. The Registration Statement raised $11 million with the issuance of 2,444,450 units at $4.50 per unit, consisting of one share of Common Stock and one five year redeemable warrant exercisable at $5.00 per share. After conversion of outstanding indebtedness and Hoot SA non-controlling interest of approximately $1.9 million and $1.0 million, respectively, into units and warrants and payment of expenses, the Company received net proceeds of approximately $7.2 million.
2011 Transactions
On March 30, 2011, the Company issued 412,286 shares of its common stock in exchange for convertible notes payable with a balance of $711,500 and accrued interest of $19,588.
On July 28, 2011, the Company issued 10,000 shares of its common stock in exchange for consulting services valued at $21,500.
On September 23, 2011, the Company issued 15,000 shares of its common stock in exchange for consulting services to be performed valued at $44,850.
On September 23, 2011, the Company issued 2,750 shares of its common stock in exchange for services performed and valued at $8,223.
On October 19, 2011, the Company issued 167 shares of its common stock in exchange for cash in the amount of $500.
Warrants
On January 6, 2011, the Company filed a Form S-1 Registration Statement under the Securities Act of 1933. The Registration Statement was declared effective on July 14, 2011 and registers one Class A Warrant and one Class B Warrant for each common share of the Company issued and outstanding. The warrants have a subscription price of $0.08 which entitles our shareholders to acquire one Class A Warrant which would entitle the holder to acquire one share of our common stock for $5.50 and one Class B Warrant which would entitle the holder to acquire one share of our common stock for $7.00. The warrants have a five year life. At June 30, 2012 and December 31, 2011, the Company had issued 1,097,254 Class A and Class B warrants. Net proceeds from the offering are included in additional paid in capital and are summarized as follows.
On August 10, 2011, the Company issued two warrants to the shareholder who collateralized the Company's $2,000,000 line of credit discussed in Note 7. The Class A Warrant is for 100,000 shares exercisable at $5.50 per share for 10 years and the Class B Warrant is for 125,000 shares exercisable at $7.00 per share for 10 years. The warrants were valued using Black-Scholes at $906,351. This amount will be amortized to interest expense over the ten year life of the warrants. At June 30, 2012 and December 31, 2011, additional paid-in capital includes $80,565 and $35,247, respectively, in amortization. Interest expense included $35,247 in the last six months of 2011 and $22,659 and $45,318 for the three and six months ended June 30, 2012, respectively.
On November 1, 2011, the Company entered into an investor relations consulting agreement. In addition to cash compensation, the consultant is entitled to receive warrants for certain performance goals. These warrants will be accounted for when the goals are accomplished.
On March 28, 2012, the Company issued 125,000 and 25,000 five year warrants at $6.50 and $8.00, respectively for consulting services related to the Company’s expansion into Europe. The warrants were valued using Black-Scholes at $518,599. This amount will be amortized to consulting fees (in G&A on consolidated statements of operations) over the five year life of the warrants. At June 30, 2012, additional paid-in capital and consulting expense include $26,745 in amortization for the period since the warrants were issued.
On June 21, 2012, the Company issued 2,444,450 five-year redeemable warrants as noted above in the “Equity Raise” section. |