Stockholders' Equity (and Non-Controlling Interest) | 12 Months Ended |
Oct. 31, 2013 |
Stockholders' Equity (and Non-Controlling Interest) [Abstract] | ' |
Stockholders' Equity (and Non-Controlling Interest) | ' |
Note 8 - Stockholders’ Equity (and Non-Controlling Interest) |
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Common Stock |
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On August 23, 2013, the Company filed a Schedule 14C Information Statement with the SEC to notify the stockholders of the Company of Management’s plan to increase the number of authorized shares of common stock from two hundred million (200,000,000) to one billion (1,000,000,000) shares with the Secretary of State of Nevada. At a meeting held on July 10, 2013, the Board authorized management to increase the number of shares authorized to one billion shares. The additional eight hundred million (800,000,000) shares of Common Stock so authorized will be available for issuance by the Board for stock splits or stock dividends, acquisitions, raising additional capital, stock options or other corporate purposes. The additional shares of Common Stock could be used for potential strategic transactions, including, among other things, acquisitions, strategic partnerships, joint ventures, restructurings, business combinations and investments, although there are no immediate plans to do so. Assurances cannot be provided that any such transactions will be consummated on favorable terms or at all, that they will enhance stockholder value or that they will not adversely affect the Company's business or the trading price of the Common Stock. The purposes for increasing the authorized shares include providing available shares for (i) the exercise of all outstanding options; (ii) the conversion of outstanding convertible promissory notes and deferred compensation agreements; (iii) the conversion of the Series A, B, C and D Convertible Preferred Stock; (iv) future issuances of stock options pursuant to employees; and (v) issuances to satisfy conversions of future convertible debt or convertible preferred stock. We mailed the Notice of Stockholder Action by Written Consent to the Stockholders on or about September 4, 2013. We filed the Certificate of Amendment to the Amended Certificate of Incorporation of the Company (the "Amendment") with the Secretary of State of the State of Nevada which became effective on September 30, 2013. |
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As of October 31, 2013, the Company has 447,200,000 shares of its authorized common stock on reserve to satisfy outstanding convertible promissory notes to Asher Enterprises and JMJ Financial. |
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On May 13, 2013, the Company issued 260,000 shares of its restricted common stock to a law firm, for settlement of legal fees of $7,800. The shares were valued and issued at $.03 per share based on the prevailing quotation prices for the Company's stock. |
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During the year ended October 31, 2013, the Company issued 5,338,728 shares of its S-8 registered common stock to sales consultants for their fees of $268,603 for the year ended October 31, 2013. The shares were valued and issued based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock. |
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During the year ended October 31, 2013, the Company issued 181,818 shares of its S-8 registered common stock to a consultant for accounting services fees of $8,040. The shares were valued and issued based on the preceding ten (10) day average of the prevailing quotation prices for the Company's stock. |
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During the year ended October 31, 2013, the Company issued 68,180,042 shares of common stock to Asher for settlement of the gross proceeds of $261,490 which includes accrued interest of $13,280 at an annual interest rate of 8% and $$21,250 of penalty interest for late filing of the Company’s Form 10-Q for the Three Months Ended April 30, 2013. |
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On October 14, 2013, the Company issued 7,692,308 shares of its common stock to Southridge Partners II LLP for the settlement of $10,000 of fees associated with the Equity Purchase Agreement. The shares were valued at $.0013 per share representing the approximate trading price of the Company’s common stock at the time of issuance. |
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On September 12, 2013, the Company entered into a stock purchase agreement with Randy McNeil (the “McNeil SPA”). Pursuant to the McNeil SPA, the Company received $5,000 in proceeds in exchange for 1,000,000 shares to be issued of the Company’s restricted common stock. The purchase price per share of the common stock is $.005 which is equal to the closing trading price of the Company’s common stock on September 10, 2013. The 1,000,000 shares of restricted stock were issued on November 21, 2013. |
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On August 16, 2013, the Company entered into a stock purchase agreement with Bernie Casamento (the “Casamento SPA”). Pursuant to the Casamento SPA, the Company received $10,000 in proceeds in exchange for 1,466,276 shares to be issued of the Company’s restricted common stock. The purchase price per share of the common stock is $.0068 which is equal to the average closing trading price of the Company’s common stock for the five (5) preceding days of the closing on August 16, 2013. The 1,466,276 shares of restricted stock were issued on November 21, 2013. |
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On August 16, 2013, the Company entered into a stock purchase agreement with Bob Rutherford (the “Rutherford SPA”). Pursuant to the Rutherford SPA, the Company received $10,000 in proceeds in exchange for 1,466,276 shares to be issued of the Company’s restricted common stock. The purchase price per share of the common stock is $.0068 which is equal to the average closing trading price of the Company’s common stock for the five (5) preceding days of the closing on August 16, 2013. The 1,466,276 shares of restricted stock were issued on November 21, 2013. |
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During the year ended October 31, 2013, the Company issued 41,000,000 shares of its common stock to JMJ Financial for conversion of principal and unpaid interest of $53,041. |
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Preferred Stock |
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On August 15, 2013 the Company entered into a Series F preferred stock agreement (the “Agreement”) with the Company’s President and Chief Executive Officer, Mark Lowenthal (the “Series F Holder”), pursuant to which the Series F Holder was issued all of the fifty one (51) authorized shares of Series F Preferred Stock, with a stated value of $0.001 per share (the “Series F Preferred Stock”). The Series F Holder was issued fifty-one (51) shares of Series F Preferred Stock as partial consideration for past and future services rendered. The Series F Preferred Stock has the rights, privileges, preferences and restrictions set for in the Certificate of Designation filed by the Corporation with the Nevada Department of State on August 19, 2013. The Series F Preferred Stock has no rights to dividends, no liquidation rights and is not convertible into common stock of the Company. Each one (1) share of the Series F Preferred shall have voting rights equal to (x) 0.019607 multiplied by the total issued and outstanding shares of Common Stock eligible to vote at the time of the respective vote (the “Numerator”), divided by (y) 0.49, minus (z) the Numerator. The Series F Preferred Stock effectively gives Mr. Lowenthal the ability to control the outcome of any matters submitted to the Company’s shareholders. |
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On October 31, 2011, the Board of Directors of the Company approved the designation of the following Series of Preferred Stock: |
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| 1 | Two hundred thirteen thousand five hundred (213,500) shares of Series B Preferred Stock. Each share of Series B Preferred Stock is convertible into 125 shares of the Company's common stock. The basis for the shares is $.08 per share based on the conversion formula of 125 shares of common stock per share of Series B Preferred Stock with a stated value of $10.00 per share. | | |
| 2 | One hundred thousand (100,000) shares of Series C Preferred Stock. Each share of Series C Preferred Stock is convertible into 125 shares of the Company's common stock. The basis for the shares is $.08 per share based on the conversion formula of 125 shares of common stock per share of Series B Preferred Stock with a stated value of $10.00 per share. | | |
| 3 | Two hundred thirty one thousand one hundred (231,100) shares of Series D Preferred Stock. Each share of Series D Preferred Stock is convertible into 125 shares of the Company's common stock. The basis for the shares is $.08 per share based on the conversion formula of 125 shares of common stock per share of Series B Preferred Stock with a stated value of $10.00 per share. | | |
| 4 | One hundred forty thousand (140,000) shares of Series E Preferred Stock. Each share of Series E Preferred Stock is convertible into the Company's common stock at a conversion price equal to seventy five percent (75%) of the average closing bid price of the Company's common stock, based on the prior 10-day closing price, subject to a floor of $0.08 per share. | | |
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In November 2011, the Company initiated a plan to restructure most aspects of management and operations. Pursuant to the plan, the Company retained new management and board of director’s representatives with experience in acute care hospitals, long-term health care and consumer oriented hygiene products. In addition, on November 2, 2011 the Company entered into definitive financing and strategic distribution agreements with Vinfluence Pty Ltd ("Vinfluence"), New South Wales, Australia. The agreements provide for the assumption of, and indemnification for, $2,374,932 of accounts payable and accrued compensation and the assumption of, and indemnification for, $2,070,271 of convertible loans and $2,400,000 of equity capital. In exchange for cash and future royalties, the Company has also signed a 10-year licensing and distribution agreement with Vinfluence for exclusive manufacturing and distribution in Asia and non-exclusive manufacturing and distribution rights in Europe and sales to the US Military. |
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In connection with the Vinfluence Agreements, on November 7, 2011, the Company issued 213,491 shares of Series B Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,134,914 of accounts payable and certain convertible notes payable. In addition, on November 7, 2011, the Company issued 231,029 shares of Series D Preferred Stock to Vinfluence in exchange for their purchase and assumption of $2,310,289 of certain accounts payable, accrued compensation and convertible notes payable. At October 31, 2012, the Company has received confirmed settlements and releases from debt holders of debt associated with Series B Preferred Stock and Series D Preferred Stock of $1,384,876 and $1,533,654, respectively. |
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During the year ended October 31, 2012, the Company received conversion notices from Vinfluence in aggregate for 298,897 shares of Series B Preferred Stock and Series D Preferred Stock which are convertible into 125 shares of common stock for each share of the Preferred Stock. In satisfaction of the conversion notices, the Company issued 37,362,125 shares of common stock to Vinfluence. |
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During the year ended October 31, 2012, the Company issued 100,000 shares of the Company’s Series C Preferred Stock for gross proceeds of $1,000,000 to Vinfluence. |
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On April 12, 2013, the Company entered into a Settlement Agreement, Global Release Cancellation of Preferred Stock Purchase Agreement, Preferred Stock Drawdown Agreement, The Agreement to Assign and Settle Notes and Agreement to License Invention by and between the Company and Vinfluence Pty Ltd (the "Global Agreement"). The Global Agreement settles the claims of each of the Company and Vinfluence which had been the subject of litigation. The Agreement also terminates the Preferred Stock Purchase Agreement, the Preferred Stock Drawdown Agreement, the Agreement to Assign and Settle Debt, the Agreement to Assign and Settle Notes Agreement and the Vinfluence License Agreement (collectively, the "Vinfluence Agreements"). As a result of the Global Agreement, the Company will cancel an aggregate of 178,042 shares of Series B and Series D Preferred Stock that had been issued to Vinfluence. The only Series B and Series D Preferred Stock that remains outstanding (an aggregate of 67,581 shares) represents debt or notes that were actually settled by Vinfluence. Each share of Preferred Stock cancelled was convertible into 125 shares of the Company's common stock thus the cancellation of the Vinfluence Agreements results in significantly less dilution than if the Preferred Stock had been converted. As part of the Global Agreement, the Company will issue Vinfluence an aggregate of 2,000,000 shares of Common Stock. Further, pursuant the Global Agreement, $136,848 of debt remains to be settled and released associated with the Series D Preferred Stock. As of October 31, 2013 the preferred shares have not been cancelled or common shares issued. |
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Included in stockholder’s equity is Series A Preferred Stock that is convertible into common stock of BioLabs at a rate of 10 shares of common stock for each share of preferred stock. |
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BioLabs is authorized to issue 5,000,000 shares of preferred stock, $0.001 par value, of which 800,000 shares are designated as Convertible Series A Preferred Stock. The BioLabs’ Certificate of Incorporation authorizes the Board of Directors to determine the preferences, limitations and relative rights of any class or series of preferred stock prior to issuance. Each such class or series must be given distinguishable designated rights prior to issuance. As of October 31, 2013 and 2012, 59,484 shares of the Company’s Series A Preferred Stock were issued and outstanding, respectively. |
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Through the date of this report, the rights and preferences of the outstanding preferred stock are identified below: |
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Convertible Series A Preferred Stock: |
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| 1. | 800,000 Authorized shares. | | |
| 2. | Holders of shares of Series A Preferred Stock have the right to vote and shall be entitled to the number of votes equal to the largest number of full shares of Common Stock into which such shares of Series A Preferred could be converted. | | |
| 3. | Each share of Convertible Series A Preferred Stock is convertible into 10 shares of common stock of BioNeutral Laboratories Corp, which can be exchanged on a 1 for 1 basis with BioNeutral Group, Inc.’s common stock. | | |
| 4 | Liquidation preference equal to 250% of the stated value of $7.21 of the shares. | | |
| 5 | No dividends are issuable to any shareholders who rank junior to the preferred shares. | | |
| 6 | Upon an initial public offering or if a significant trading market develops and other parameters occur in relation to the Company's common stock, each preferred share shall be mandatorily converted into 10 shares of common stock. | | |
| 7. | Par value of $0.001. | | |
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Convertible Series B,C,D Preferred Stock: |
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| 1. | Authorized shares of 213,491, 100,000 and 231,029 of Series B, C and D, respectively. | | |
| 2. | Non voting. | | |
| 3. | Each share of Convertible Series B, C, D Preferred Stock is convertible into 125 shares of common stock of BioNeutral Group, Inc. | | |
| 4 | Liquidation preference equal to 250% of the stated value of $10.00 of the shares. | | |
| 5 | No dividends are issuable. | | |
| 7. | Par value of $0.001. | | |
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During fiscal year ended October 31, 2010 the Company exchanged shares with several of the BioLabs preferred and common stockholders, all of whom exchanged their shares at a ratio of 1 share of preferred stock for 10 shares of common stock and 1 to 1 common exchange, except for four preferred stockholders and common stockholders of BioLabs who were issued an aggregate of 3,598,800 shares of common stock. These four shareholders exchanged their shares at a ratio of 200 shares of common stock for 1 share of preferred stock and a 1 to 1 common share exchange. Although all of the exchanged shares are reflected in the financial statements as issued and outstanding, the issuance of shares to the four holders who exchanged at the higher exchange ratio is subject to dispute. As a result of the above transaction, the Company is disputing the issuance of 2,634,730 shares of common stock. A resolution of this dispute is currently being pursued by the Company. However the exact nature and effect of such a resolution on the financial statements of the Company is not currently known. In this regard, a prospective resolution could ultimately produce various financial statement effects including, but not limited to a reduction in the Company’s issued and outstanding common stock and an increase to earnings per share or no effect at all. |
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During the years ended October 31, 2013 and 2012, no holders of our preferred shares exchanged Series A Preferred shares into shares of common stock. |
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Non-Controlling Interest |
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In connection with the reverse acquisition disclosed in Note 1, initially approximately 14% of BioLabs’ common shareholders did not participate in the exchange of their shares of BioLabs common stock for shares of common stock of the Company. Those shareholders are recognized as a non-controlling interest in the Company’s consolidated financial statements in accordance with FASB ACS 805-40-25-2. The assets, liabilities and operations underlying the shares of BioLabs and the Company are identical. However, the shares representing ownership of the Company reflect the combined entity after the Share Exchange transaction, while BioLabs shares included in the non-controlling interest held by the non-controlling interest represent ownership of that legal entity. |
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Non-Controlling Interest at October 31, 2010 | | $ | 570,301 | |
Non-Controlling Interest Converted | | | (25 | ) |
Non-Controlling interest Share of Net Loss for the Year ended October 31, 2011 | | | (241,693 | ) |
Non-Controlling Interest at October 31, 2011 | | | 328,583 | |
Non-Controlling interest Share of Net Loss for the Year ended October 31, 2012 | | | (219,981 | ) |
Non-Controlling Interest at October 31, 2012 | | | 108,602 | |
Non-Controlling interest Share of Net Loss for the nine months ended October 31, 2013 | | | (269,303 | ) |
Non-Controlling Interest at October 31, 2013 | | $ | (160,701 | ) |
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The Series A Preferred Stock is recognized in the Non-Controlling Interest. If the 59,484 shares of preferred stock were fully converted into shares of BioLabs common stock and Preferred Shareholders did not elect to exchange those shares for Company common stock, the Non-Controlling interest would be 8.44% as of October 31, 2013 and 2012. |