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SUBSEQUENT EVENTS
3 Months Ended
Sep. 30, 2013
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 13 – SUBSEQUENT EVENTS

 

On November 12, 2013, the Board of Directors of the Company approved by unanimous written consent a 1-for-10 reverse stock split (the “Reverse Stock Split”) and to decrease the authorized common stock of the Company. Pursuant to the Reverse Stock Split, each ten (10) shares of the Company’s Common Stock will be automatically converted, without any further action by the Stockholders, into one share of Common Stock. No fractional shares of Common Stock will be issued as the result of the Reverse Stock Split. Instead, the Company will issue to the Stockholders one additional share of Common Stock for each fractional share. The Company filed Form DEF 14c on November 6, 2013 and anticipates that the effective date of the Reverse Stock Split will be in December 2013.

 

The Company believes that, among other reasons, the number of outstanding shares of Common Stock have contributed to a lack of investor interest in the Company and has made it difficult for the Company to attract new investors and potential candidates. The Board believes that the Reverse Stock Split could bring additional business opportunities to the Company and increase the stock price of our Common Stock and that the higher stock price could help generate interest in the Company by investors and provide business opportunities. We have no current plans, proposals, or arrangements to engage in any corporate transactions that would require the issuance of additional securities made available pursuant to this proposal.

 

However, the effect of the Reverse Stock Split, if any, upon the stock price for our Common Stock cannot be predicted, and the history of similar stock split combinations for companies like us is varied. Further, we cannot assure you that the stock price of our Common Stock after the Reverse Stock Split will rise in proportion to the reduction in the number of shares of Common Stock outstanding as a result of the Reverse Stock Split because, among other things, the stock price of our Common Stock may be based on our performance and other factors as well.

 

The Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable. The Reverse Stock Split shall not affect any rights, privileges or obligations with respect to the shares of Common Stock existing prior to the Reverse Stock Split, nor does it increase or decrease the market capitalization of the Company. The Reverse Stock Split is not intended as, and will not have the effect of, a “going private transaction” under Rule 13e-3 of the Exchange Act. We will continue to be subject to the periodic reporting requirements of the Exchange Act.

 

By reducing the number of issued and outstanding shares of Common Stock, more shares of Common Stock are available for issuance as a result of the Reverse Stock Split. The Board believes that the availability of more shares of Common Stock for issuance will allow the Company greater flexibility in pursuing financing from investors and issuing shares of Common Stock in exchange for financing, meeting business needs as they arise, taking advantage of favorable opportunities, and responding to a changing corporate environment.

 

The Company’s Board believes that the decrease in authorized Common Stock could reduce the potential dilutive effect of the Reverse Stock Split by reducing the availability of new common shares for future issuance and could help generate interest in the Company by investors and provide business opportunities. We have no current plans, proposals or arrangements to engage in any corporate transactions that would require the issuance of additional securities made available pursuant to this proposal.

 

The decrease in authorized Common Stock shall not affect any rights, privileges or obligations with respect to the shares of Common Stock existing prior to the decrease in authorized Common Stock, nor does it increase or decrease the market capitalization of the Company. The decrease in authorized Common Stock is not intended, as, and will not have the effect of, “a going private transaction” under Rule 13e-3 of the Exchange Act. We will continue to be subject to the periodic reporting requirements of the Exchange Act.

 

The decrease in authorized Common Stock will become effective on the date that we file the Certificate of Amendment to the Articles of Incorporation of the Company (the “Amendment”) with the Secretary of State of the State of Delaware. We intend to file Amendment with the Secretary of State of Delaware promptly after the twentieth (20th) day following the date on which this Information Statement is mailed to the Stockholders.

 

Prior to filing the amendment to the Certificate of Incorporation reflecting the Reverse Stock Split and decrease in the authorized Common Stock, the Company must first notify the Financial Industry Regulatory Authority (“FINRA”) by filing the issuer Company Related Action Notification Form no later than ten (10) days prior to our anticipated record date for the Reverse Stock Split. Our failure to provide such notice may constitute fraud under Section 10 of the Exchange Act.

 

On October 16, 2013, the Company issued a convertible promissory note to Asher for $70,000 under the same terms of the 2013 Notes described in Note 6.

 

On October 21, 2013, the Company issued 1,722,892 shares of common stock in satisfaction of the April 18, 2013 Asher convertible note of $27,500 and accrued and unpaid interest of $1,100. The shares were issued at approximately $0.016 per share.

 

The Company’s Management performed an evaluation of the Company’s activity through the date these financials were issued to determine if they must be reported. The Management of the Company determined that there were no other reportable subsequent events to be disclosed.