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Equity Transactions, Warrants And Options
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Dec. 31, 2011
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| Equity Transactions Warrants And Options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY TRANSACTIONS, WARRANTS AND OPTIONS |
NOTE 18 – EQUITY TRANSACTIONS, WARRANTS AND OPTIONS On December 31, 2011, the Company issued 500,000 shares of common stock at $0.05 per share or $25,000 to its Chief Operating Officer in payment for services for the three months ended December 31, 2011. The shares were valued based on the quoted market price. On July 14, 2011, the Company issued 250,000 shares of common stock to one accredited investor in exchange for $25,000. On July 1, 2011, the Company issued 500,000 shares of common stock valued at $0.10 per share or $50,000 to its Chief Operating Officer in payment for services for the three months ended September 30, 2011. The shares were valued based on contemporaneous sales to unrelated third party investors. In June 7, 2011, the Company issued 200,000 shares of common stock to its two independent directors in payment of director fees for the coming year. The shares were value at $0.10 per share based upon the market value of the Company’s common stock on the date of the grant. In May 16, 2011, the Company issued 500,000 shares of common stock to three accredited investors in exchange for $50,000. In May 27, 2011, the Company issued 100,000 shares of common stock in connection with a one year financial communications agreement. The shares were valued at $0.10 per share based upon the market value of the Company’s common stock on the date of the grant. On April 2, 2011, the Company issued 300,000 shares of common stock in connection with a one year investor relations agreement. The shares were valued at $0.10 per share based upon the market value of the Company’s common stock on the date of the grant. On April 1, 2011, the Company issued 500,000 shares of common stock valued at $0.10 per share or $50,000 to its Chief Operating Officer in payment for services for the three months ended September 30, 2011. The shares were valued based on contemporaneous sales to unrelated third party investors. In January 7, 2011, the Company issued 50,000 shares of common stock in exchange for $5,000 in a private placement with an accredited investor. In January 7, 2011, the Company issued 3,000,000 shares of common stock for cash at $0.05 per share in exchange for $150,000 in a private placement with its new director and Chief Operating Officer. Since the fair value of the shares was $0.10 per share based on contemporaneous sales to third parties, the difference of $.05 per share was recorded as compensation expense of $150,000. In addition, the Chief Operating Officer was granted 500,000 shares of common stock valued at $0.10 per share or $50,000 in lieu of salary for the three months ended March 31, 2011. The shares were valued based on contemporaneous sales to unrelated third party investors. In May 14, 2010, the Company issued 200,000 shares of restricted common stock to two directors. The stock will vest in May 2011. Shares were valued at the current market price of $.20 per share. On May 1, 2010 the Company entered into an agreement to receive website design and development, internet marketing and search engine optimization for one year. The consultants received 100,000 shares of company common stock. Shares were valued at a current market price of $0.20 per share. On April 29, 2010 the Company entered into an agreement to receive assistance in the development of new data center management technologies. The consultants will also investigate a variety of associated topics regarding data center management. This agreement will run for one year. The consultants received 1,000,000 shares of company common stock. Shares were valued at a current market price of $0.23 per share. On April 27, 2010, the Company issued 700,000 shares of common stock to a consultant for investor relations services through December 31, 2011. The Company recognized professional fees of $126,000, based upon the market price of common stock on the date of issuance of $0.18, during the year ended December 31, 2011. On April 15, 2010 the Company entered into an agreement to receive marketing strategies, digital media and social media strategies to expand the Company’s investor base and improve shareholder communication. The consultants received 400,000 shares of company common stock. Shares were valued at a current market price of $0.15 per share. On September 11, 2009, the Company entered into an agreement to receive a variety of corporate consulting services. The contract will run for one year at a rate of $2,000 per month. In addition, the consultants will receive a commencement bonus of 300,000 shares of company common stock. Shares were valued at current market price of $0.27 per share. On September 8, 2008, the Company entered into an agreement to receive consulting services. The consultants will provide 400 hours of service for 400,000 shares of common stock. All services will be accounted for at a rate of $250 an hour. 142.75 hours at a cost of $35,688, were recorded as expense for the year ended December 31, 2010. On September 12, 2008, the Company entered into agreements with three companies to receive a variety of consulting services. Each agreement has a term of one year starting August 1, 2008 and remuneration will be $250,000 per annum. Each subsequent year, the annual rate will increase $12,500 while the agreement is in effect. The Company has the option of paying the consultants in cash or common stock. The Company has decided to issue 1,000,000 shares of stock to the consulting firms as payment for services. The value of stock will be at $0.25 per share. A pro-rata portion of this agreement of $437,500 has been expensed for the years ended December 31, 2010. On May 25, 2010 a notice of non renewal, was sent to the one consulting company that continued to provide services from August 1, 2009 to July 31, 2011 at an agreed to rate of $262,500. The Company issued 656,200 shares of common stock for the service provided. A notice of non-renewal was previously forwarded to the other two companies. On July 7, 2009, these consultants were issued a series of options as follows: 1,000,000 share option to acquire shares at $1.00 per share expiring on 8/01/11 1,000,000 share option to acquire shares at $2.00 per share expiring on 8/01/11 1,000,000 share option to acquire shares at $3.00 per share expiring on 8/01/11 1,000,000 share option to acquire shares at $4.00 per share expiring on 8/01/11 1,000,000 share option to acquire shares at $5.00 per share expiring on 8/01/11
To determine the valuation of the options, FASB Accounting Standards Codification 718, “Compensation – Stock Compensation” requires a valuation technique to estimate the fair value of the options issued. The Black-Sholes Model incorporates the various characteristics for proper valuation. Using the Black-Sholes model, the Company assessed the value of the outstanding options at December 31, 2011. The Company determined that due to the lack of a marketability of the Company’s stock, no adjustments were deemed materials to the financial statements. As of December 31, 2011, there were no options outstanding and 3,300,000 warrants outstanding.
Following is a summary of the status of options & warrants outstanding as of December 31, 2011 and 2010 respectively:
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