Stockholders' Equity (Deficit)

3 Months Ended

Mar. 31, 2013

Stockholders' Equity (Deficit) [Abstract]

Stockholders' Equity

Note 6. Stockholders’ Equity (Deficit)

Loss per share

A reconciliation of the numerator and the denominator used in the calculation of loss per share is as follows:

	March 31,			March 31,
	2013			2012
	(unaudited)
Basic and Diluted:
Net loss applicable to common stockholder (in thousands)	$	(170	)	$	(647	)
Weighted average common shares outstanding		78,610,477			67,163,767
Net loss per common share	$	(0.00	)	$	(0.01	)

Warrants to purchase 705,667 and 922,667 common shares and preferred stock convertible into 613,191 and 584,891 common shares were not included in the computation of diluted loss per share applicable to common stockholders as they are anti-dilutive as a result of net losses for the periods ended March 31, 2013 and March 31, 2012, respectively.

Preferred Stock

A summary of the Company’s preferred stock is as follows:

	March 31,		December 31,
	2013		2012
	Shares Issued &		Shares Issued &
Offering	Outstanding		Outstanding
	(unaudited)
Series A convertible		47,250		47,250
Series B convertible, 10% cumulative dividend		93,750		93,750
Series C convertible, 10% cumulative dividend		38,333		38,333
Series D convertible, 10% cumulative dividend		175,000		175,000
Series E convertible, 10% cumulative dividend		19,022		19,022
Total Preferred Stock		373,355		373,355

As of March 31, 2013 and 2012, the Company had cumulative preferred undeclared and unpaid dividends. In accordance with the Financial Accounting Standard Board’s Accounting Standards Codification 260-10-45-11, “Earnings per Share”, these dividends were added to the net loss in the net loss per share calculation.

Summary of Preferred Stock Terms

Series A Convertible Preferred Stock

Liquidation Value: $4.50 per share, $212,625

Conversion Price: $103.034 per share

Conversion Rate: 0.04367—Liquidation Value divided by Conversion Price ($4.50/$103.034)

Voting Rights: None

Dividends: None

Conversion Period: Any time

Series B Convertible Preferred Stock

Liquidation Value: $4.00 per share, $375,000

Conversion Price: $10.00 per share

Conversion Rate: 0.40—Liquidation Value divided by Conversion Price ($4.00/$10.00)

Voting Rights: None

Dividends: 10%—Quarterly—Commencing March 31, 2001

Conversion Period: Any time

Cumulative and undeclared dividends in arrears at March 31, 2013 were $454,000

Series C Convertible Preferred Stock

Liquidation Value: $3.00 per share, $115,000

Conversion Price: $6.00 per share

Conversion Rate: 0.50—Liquidation Value divided by Conversion Price ($3.00/$6.00)

Voting Rights: None

Dividends: 10%—Quarterly—Commencing March 31, 2002

Conversion Period: Any time

Cumulative and undeclared dividends in arrears at March 31, 2013 were $131,000

Series D Convertible Preferred Stock

Liquidation Value: $10.00 per share, $1,750,000

Conversion Price: $10.00 per share

Conversion Rate: 1.00—Liquidation Value divided by Conversion Price ($10.00/$10.00)

Voting Rights: None

Dividends: 10%—Quarterly—Commencing April 30, 2002

Conversion Period: Any time

Cumulative and undeclared dividends in arrears at March 31, 2013 were $1,998,000

Series E Convertible Preferred Stock

Liquidation Value: $22.00 per share, $418,488

Conversion Price: $8.00 per share

Conversion Rate: 2.75—Liquidation Value divided by Conversion Price ($22.00/$8.00)

Voting Rights: Equal in all respects to holders of common shares

Dividends: 10%—Quarterly—Commencing May 31, 2002

ConversionPeriod: Any time

Cumulative and undeclared dividends in arrears at March 31, 2013 were $480,000

Issuance of Common Stock as Payment for Services

During the quarter ended March 31, 2013, the Company issued 886,294 shares of restricted, unregistered common stock to a consultant for services rendered, and recorded $20,000 as a selling, general and administrative expense.