5. Capital Stock | 9 Months Ended |
Sep. 30, 2014 |
Notes to Financial Statements | ' |
5. Capital Stock | ' |
5. Capital Stock |
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In February 2014, the Company issued 565,615 shares of its common stock at $0.50 for conversion of convertible debenture of $254,000 and $28,282 of accrued interest. |
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In March 2014, the Company issued 601,000 shares of its common stock at $0.50 through a private placement for total cash consideration of $300,500. Also, Company issued 601,000 warrants to purchase to purchase 601,000 shares of common stock exercisable at $1.00 per share. |
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On April 3, 2014, the Company entered stock subscription agreement of 5,000 shares at $1.00 per share with 5,000 warrants to purchase 5,000 shares of common stock with an exercise price of $2.00 per share. These warrants expire 180 days after stock issuance date. |
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On April 16, 2014, the Company entered stock subscription agreement of 20,000 shares at $0.50 per share with 20,000 warrants to purchase 20,000 shares of common stock with an exercise price of $1.00 per share. These warrants expire 180 days after stock issuance date. |
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On July 7, and July 31, 2014, the Company entered stock subscription agreements of 50,000 shares and 20,000 shares at $1.00 per share with 50,000 and 20,000 warrants to purchase 50,000 and 20,000 shares of common stock with an exercise price of $2.00 per share. These warrants expire 360 days after stock issuance date. |
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On August 22, 2014, the Company entered a stock subscription agreement of 99,963 shares at $1.00 per share with 99,963 warrants to purchase 99,963 shares of common stock with an exercise price of $2.00 per share. These warrants expire 1 year from the date the restricted common shares become free trading. |
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On August 28, 2014, the Board authorized the Company to exchange or repurchase 68,666,619 shares of common stock in privately negotiated transactions with three shareholders, including the current CEO of the Company. As a result of the exchange or repurchase the Company’s total shares issued and outstanding will be reduced to Fifty Million (50,118,493) shares of common stock. The repurchase was made pursuant to a privately negotiated stock repurchase agreement. The per share repurchase price for the shares repurchased was determined through arms-length negotiations with the private investors. The exchange of shares was consummated at the price that the shares were issued for originally. The repurchase price was paid through cash on hand from the Company’s available surplus and through the issuance of unsecured promissory notes that accrue simple interest at 6% per annum. Other than this private transaction as described in this report, our board of directors has not authorized any stock repurchase program or plan, and we have no current plans to effect any open-market purchases of our common stock or other repurchases of our common stock. |
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On September 9, 2014, a Warrant holder exercised 34,000 warrants to purchase 34,000 restricted common shares at a price of $1.00 per share. |
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Due to a ratchet provision, the warrants issued during the year were accounted for as a derivative and fair valued using the Black Scholes valuation model. The initial valuation was $525,603, which was immediately expensed as derivative expense. |
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Stock Purchase Warrants |
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In conjunction with the Private Placement Memorandum dated February 13, 2013, the Company is offering up to 3,000,000 units. Each unit consists of 1 share of common stock priced at $1.00 and one Class A Warrant to purchase 1 share of common stock with an exercise price of $1.50 per share. These warrants expire on the earlier of (i) 180 days after the common stock commences quotation on the OTC Bulletin Board or (ii) one year after the date of issuance. No issuances have been sold from this offering as of December 31, 2013. |
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In December 2013, the Noteholder elected to convert $50,000 into 100,000 shares of the Company’s Common Stock at $0.50 per share. The Company issued 100,000 warrants to purchase 100,000 shares of common stock exercisable at $1.00 per share. The warrants were expired in September 2014. |
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In February and April 2014, the Noteholder elected to convert $304,049 (including accrued interest of $30,049) into 607,119 shares of the Company’s Common Stock at $0.50 per share. The Company issued 607,119 warrants to purchase 607,119 shares of common stock exercisable at $1.00 per share. The warrants were expired in September 2014. |
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In March 2014, the Company issued 601,000 shares of its common stock at $0.50 through a private placement for total cash consideration of $300,500. Also, the Company issued 601,000 warrants to purchase 601,000 shares of common stock exercisable at $1.00 per share. 34,000 warrants were exercised in September 2014 and 567,000 warrants were expired in September 2014. |
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On April 3, 2014, the Company entered stock subscription agreement of 5,000 shares at $1.00 per share with 5,000 warrants to purchase 5,000 shares of common stock with an exercise price of $2.00 per share. These warrants expire 180 days after stock issuance date. The warrants were expired in September 2014. |
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On April 16, 2014, the Company entered stock subscription agreement of 20,000 shares at $0.50 per share with 20,000 warrants to purchase 20,000 shares of common stock with an exercise price of $1.00 per share. These warrants expire 180 days after stock issuance date. As of September 30, 2014, 20,000 warrants are not exercised or expired. |
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On July 7, and July 31, 2014, the Company entered stock subscription agreements of 50,000 shares and 20,000 shares at $1.00 per share with 50,000 and 20,000 warrants to purchase 50,000 and 20,000 shares of common stock with an exercise price of $2.00 per share. These warrants expire 360 days after stock issuance date. |
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On August 22, 2014, the Company entered stock subscription agreement of 99,963shares at $1.00 per share with 99,963 warrants to purchase 99,963 shares of common stock with an exercise price of $2.00 per share. These warrants expire 1 year from the date the restricted common shares become free trading. |
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On September 9, 2014, a Warrant holder exercised 34,000 warrants to purchase 34,000 restricted common shares at a price of $1.00 per share. |
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The following table summarizes all warrant activity for the periods ended September 30, 2014: |
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| | Shares | | Weighted-Average Exercise Price Per Share |
Exercisable at December 31, 2013 | | 100,000 | | 1 |
Granted | | 1,403,112 | | 1.12 |
Exercised | | (34,000 | ) | 1 |
Expired | | (1,237,615 | ) | 1 |
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Exercisable at September 30, 2014 | | 231,497 | | 1.6 |
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