STOCKHOLDERS’ EQUITY

9 Months Ended

Sep. 30, 2011

STOCKHOLDERS’ EQUITY

NOTE 6 STOCKHOLDERS’ EQUITY

Common Stock

During the nine months ended September 30, 2011, America West issued 200,000 common shares to repay an accrued liability of $299,000. The fair value of the shares was determined to be $350,000 resulting in a loss on the extinguishment of liabilities of $51,000.

During the nine months ended September 30, 2011, America West issued 435,500 common shares for services rendered valued at $437,180.

During the nine months ended September 30, 2011, America West issued 6,798,078 common shares for $6,798,078 cash, net of $924,733 of cash issuance costs. In connection with the sale of these shares, America West granted 585,000 common stock warrants to an entity controlled by a Director of America West as additional stock issuance costs. The fair value of the warrants was determined to be $805,199 (see Warrants section below).

During the nine months ended September 30, 2011, America West issued 5,058,745 common shares with debt. The relative fair value of the shares was determined to be $2,367,981 and was recorded as a discount on the debt. See Notes 3 and 4 for details.

During the nine months ended September 30, 2011, America West issued 17,298,245 common shares for the conversion of $16,737,237 of principal and $417,127 of accrued interest. See Notes 3 and 4 for details.

During the nine months ended September 30, 2011, America West issued 16,667 common shares for the exercise warrants and received cash of $168.

Options

A summary of option transactions for the nine months ended September 30, 2011 is as follows:

	Options		Wtd. Avg Exercise Price
Outstanding at December 31, 2010	1,250,625	$	2.93
Granted	-		-
Exercised	-		-
Forfeited	-		-
Expired	-		-
Outstanding at September 30, 2011	1,250,625	$	2.93
Exercisable at September 30, 2011	1,250,625	$	2.93

During the nine months ended September 30, 2011, the remaining fair value of the outstanding options of $270,087 was expensed.

At September 30, 2011, the range of exercise prices and the weighted average remaining contractual life of the options outstanding were $0.12 to $5.40 and 2.22 years, respectively. The intrinsic value of the exercisable options outstanding at September 30, 2011 was $63,000.

Warrants

On January 21, 2011, America West granted 548,708 common stock warrants to an entity controlled by a Director of America West with an exercise price of $1.20.  The warrants vest immediately and have a term of five years.  The fair value of the warrants was determined to be $1,123,979 using the Black Scholes stock option valuation model.  The significant assumptions used in the valuation were: the exercise price noted above, the market value of America West’s common stock on January 21, 2011, $2.05, expected volatility of 291.71%, risk free interest rate of 3.4% and an expected term of five years.  The warrants were issued as a commission for various debt raises and the fair value of the warrants was recorded as deferred financing costs. During the nine months ended September 30, 2011, $986,742 of these costs was amortized to interest expense. The unamortized deferred financing costs associated with these warrants totaled $137,237 as of September 30, 2011.

On June 10, 2011, America West granted 585,000 common stock warrants to an entity controlled by a Director of America West with an exercise price of $1.00.  The warrants vest immediately and have a term of five years.  The fair value of the warrants was determined to be $805,199 using the Black Scholes stock option valuation model.  The significant assumptions used in the valuation were: the exercise price noted above, the market value of America West’s common stock on June 10, 2011, $1.39, expected volatility of 223.17%, risk free interest rate of 3.4% and an expected term of five years.  The warrants were issued as a commission for various equity raises.

In addition, the remaining fair value of warrants issued in October 2009 was expensed during the nine months ended September 30, 2011. A total of $130,000 was recorded as warrants expense and $390,000 was included in the loss on extinguishment of debt due to the loan modification discussed in Note 3.

A summary of warrant transactions for the nine months ended September 30, 2011 is as follows:

	Warrants		Wtd. Avg Exercise Price
Outstanding at December 31, 2010	2,485,276	$	1.66
Granted	1,133,708		1.10
Exercised	(16,667)		0.01
Forfeited	-		-
Expired	-		-
Outstanding at September 30, 2011	3,602,317		1.49
Exercisable at September 30, 2011	3,602,317	$	1.49

At September 30, 2011, the range of exercise prices and the weighted average remaining contractual life of the warrants outstanding were $0.01 to $5.04 and 4.65 years, respectively. The intrinsic value of the warrants exercisable at September 30, 2011 was $784,137. The weighted average grant date fair value of the warrants granted during the nine months ended September 30, 2011 was $1.70.