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Capital Deficiency
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6 Months Ended |
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Jun. 30, 2013
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| Notes to Financial Statements | |
| Capital Deficiency |
NOTE 13. Capital Deficiency
On April 12, 2013, the Company sold to certain accredited investors (the “Investors”) an aggregate of 2,000,000 units (the “Units”) with gross proceeds to the Company of $500,000. On April 18, 2013, the Company sold an additional 1,200,000 Units to certain additional Investors with gross proceeds to the Company of $300,000. On April 25, 2013, the Company sold an additional 600,000 units to an additional Investor with gross proceeds to the Company of $150,000 (together, the “April 2013 Offering”).
Each Unit was sold for a purchase price of $0.25 per Unit and consisted of: (i) one share of the Company’s common stock, $0.001 par value per share (the “Common Stock”) and (ii) a five-year warrant (the “Warrants”) to purchase fifty (50%) percent of the number of shares of Common Stock purchased at an exercise price of $0.50 per share, subject to adjustment upon the occurrence of certain events such as stock splits and dividends. In addition the Company issued 2,518,356 shares of its common stock to investors as part of a ratchet anti-dilution agreement with certain investors.
The Company paid placement agent fees of $26,500 in cash to a broker-dealer in connection with the sale of the Units. Additionally, the Company issued to the broker-dealer, in connection with the sale of the Units, a warrant to purchase up to 64,000 shares of Common Stock with substantially the same terms as the Warrants issued to the Investors.
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