SHAREHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 4 – SHAREHOLDERS’ EQUITY

On February 1, 2006, a total of 250,000 shares of Preferred Stock were authorized for issuance to two individuals who provided services to us. On May 12, 2006, we filed a Certificate of Amendment to the Certificate of Designation for the Preferred Stock with the Secretary of State of the State of Delaware, increasing the number of shares designated as Preferred Stock from 500,000 to 600,000 shares. As a result of this filing, we issued 150,000 and 100,000 shares of the Preferred Stock to Arnold Kling and Kirk Warshaw for their services as our president and chief financial officer, respectively. Each share of Preferred Stock is convertible, at the holder's option, into 100 shares of Common Stock. Mr. Kling's services were valued at $11,250 and Mr. Warshaw's services were valued at $7,500.

On October 23, 2006, we effected a reverse stock split of our Common Stock. Pursuant to this reverse stock split, each 125 shares of Common Stock issued and outstanding as of the date following the reverse stock split was converted into one (1) share of Common Stock. This reverse stock split reduced the number of shares of Common Stock into which each share of Preferred Stock could be converted from 100 shares to .8 shares. All per share data has been retroactively restated to reflect this reverse stock split.

On November 29, 2006, the holders of all the issued and outstanding shares of Preferred Stock elected to convert all of their Preferred Stock into shares of Common Stock. As a result, the 594,595 shares of Preferred Stock outstanding were exchanged for 475,676 shares of Common Stock.

As of September 30, 2014, our authorized capital stock consists of 100,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock of which 2,071,644 shares of Common Stock, and no shares of Preferred Stock, are issued and outstanding. All shares of Common Stock currently outstanding are validly issued, fully paid and non-assessable.

On May 9, 2013, we entered into the Amendment pursuant to which Infinicom’s rights to the Infinicom Additional Shares was converted into 138,322 shares of Common Stock. We recognized non-cash expense of $26,924 associated with this conversion.

On May 9, 2013, we raised total gross proceeds of $134,000 from the sale of an aggregate of 688,420 shares of Common Stock at a price of $0.1946488 per share. Of these shares, 344,210 were sold to Hudson and the other 344,210 shares were sold to Iroquois. The sale to Hudson and Iroquois was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”) pursuant to Sections 4(a)(2) and 4(a)(5) of the Act.

Prior to May 9, 2013, each of Hudson and Iroquois acquired 349,348 shares of Common Stock at a purchase price of $68,000, or $0.194648 per share, from the Chapter 7 Trustee of the Estates of Rodman, Direct Markets, Inc., and Direct Markets Holdings, Corp. in Chapter 7 bankruptcy proceedings pending in the United States Bankruptcy Court for the Southern District of New York (Cases No. 13-10087, 13-10088 and 13-10089). These shares were all the shares of Common Stock beneficially owned by R&R, an affiliate of Rodman.

On July 24, 2014, we issued convertible promissory notes (the “2014 Notes”) in the principal amount of $55,000 to each of Iroquois Master Fund Ltd and Hudson Bay Master Fund Ltd. (an aggregate of $110,000). The 2014 Notes have a maturity date of December 31, 2015 and bear interest at the rate of 5.0% per annum, payable at maturity. The principal and accrued interest on the 2014 Notes are convertible at the “Conversion Price” (as defined in the 2014 Notes), initially at $0.50 per share, into shares of our common stock at the option of the holder, subject to the “Beneficial Ownership Cap” (as defined in the 2014 Notes), or upon the consummation of a “Fundamental Transaction” (as defined in the 2014 Notes). The proceeds of the 2014 Notes will be utilized by us to fund working capital needs. We have valued the beneficial conversion features of this note to be $55,000, which will be amortized ratably over the term of these two notes. The unamortized portion of the debt discount as of September 30, 2014 was $47,860.