in The Beginning.....
10-Q Jan 19, 2010-received for time period- Sept 30, 2009..
We may issue shares of preferred stock without stockholder approval that could have a material adverse effect on the market value of the
common stock.
Our Board of Directors (“Board”) has the authority to issue a total of up to 3,000,000 shares of preferred stock and to fix the rights,
preferences, privileges, and restrictions, including voting rights, of the preferred stock, which typically are senior to the rights of the common
stockholders, without any further vote or action by the common stockholders. The rights of our common stockholders will be subject to, and may
be adversely affected by, the rights of the holders of the preferred stock that might be issued in the future. Preferred stock also could have the
effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. This could delay, defer, or prevent a
change in control. Furthermore, holders of preferred stock may have other rights, including economic rights, senior to the common stock. As a
result, the issuance of preferred stock could have a material adverse effect on the market value of the common stock.
Our future sales of our common stock could adversely affect its price and our future capital-raising activities could involve the issuance of
equity securities, which would dilute your investment and could result in a decline in the trading price of our common stock .
We may sell securities in the public or private equity markets if and when conditions are favorable, even if we do not have an
immediate need for additional capital at that time. Sales of substantial amounts of our common stock, or the perception that such sales could
occur, could adversely affect the prevailing market price of our common stock and our ability to raise capital. We may issue additional common
stock in future financing transactions or as incentive compensation for our executive management and other key personnel, consultants and
advisors. Issuing any equity securities would be dilutive to the equity interests represented by our then-outstanding shares of common stock. The
market price for our common stock could decrease as the market takes into account the dilutive effect of any of these issuances. Furthermore, we
may enter into financing transactions at prices that represent a substantial discount to the market price of our common stock. A negative reaction
by investors and securities analysts to any discounted sale of our equity securities could result in a decline in the trading price of our common
stock.
Our corporate documents and Delaware law contain provisions that could discourage, delay or prevent a change in control of our company.
Provisions in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition involving us that our
stockholders may consider favorable. For example, our certificate of incorporation authorizes preferred stock, which carries special rights,
including voting and dividend rights. With these rights, preferred stockholders could make it more difficult for a third party to acquire us.
We are also subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law. Under these provisions, if
anyone becomes an “interested stockholder,” we may not enter into a “business combination” with that person for three years without special
approval, which could discourage a third party from making a takeover offer and could delay or prevent a change of control. For purposes of
Section 203, “interested stockholder” means, generally, someone owning 15% or more of our outstanding voting stock or an affiliate of ours that
owned 15% or more of our outstanding voting stock during the past three years, subject to certain exceptions as described in Section 203.
We do not currently intend to pay dividends on our common stock and, consequently, the ability to achieve a return on an investment in our
common stock will depend on appreciation in the price of our common stock.
We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our
board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure
requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other
factors that our board of directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our
common stock.
Our common stock is controlled by a small number of shareholders
Approximately 70 percent of the issued common stock is controlled by four individuals or corporations. As such, acting together they
have effective control over the company.
Item
1B.
Risk Factors - continued
26
We sold or issued the following equity securities during the three month period ended September 30, 2009:
During the quarter, we issued an employee a total of 34,990 shares of common stock valued at $51,335 in exchange for services
provided to us.
On September 9, 2009, the Company issued one entity, 200,000 shares of common stock in exchange for programming services to be
provided to the Company. The related Programming expense was valued using the fair value of the Company’s common stock on the date of
issuance, and totalled $300,000.
Effective September 11, 2009, the two individuals holding the $100,000 Convertible Promissory Notes converted their notes into
66,666 restricted common shares.
During September, 2009 the Company issued 500,000 shares of the Company’s common stock for $500,000. Each share of Common
Stock was issued together with a warrant to purchase one half of a share of Common Stock exercisable at $1.00 per share, and a warrant to
purchase one half of a share of Common Stock exercisable at $2.00 per share. The warrants were valued on the date of issuance using the BlackScholes
model that generated a total fair value $515,537. This amount was recorded as consulting expense.
On September 21, 2009 the Company issued 17,500 shares of the Company’s common stock to a Company and 14,000 shares of the
Company’s common stock to an individual for services provided to the Company. The related consulting expense was valued using the fair value
of the Company’s common stock on the date of issuance, and totalled $41,500. Each share of Common Stock was issued together with a warrant
to purchase one half of a share of Common Stock exercisable at $1.00 per share, and a warrant to purchase one half of a share of Common Stock
exercisable at $2.00 per share. The warrants were valued on the date of issuance using the Black-Scholes model that generated a total fair value
$32,399. This amount was recorded as consulting expense.
On September 30, 2009, the Company issued one individual, 25,000 shares of common stock in exchange for services provided to the
Company. The related consulting expense was valued using the fair value of the Company’s common stock on the date of issuance, and totalled
$38,750.
Effective September 30, 2009, we issued an individual, 50,916 shares of common stock as compensation due under an Amended
Employment Agreement entered into between us and such individual on January 1, 2008. The related consulting expense was valued using the
fair value of the Company’s common stock based on average closing price, and totalled $65,628.
The total number of Common shares outstanding as of September 30, 2009 was 131,152,383.
All of the securities listed above were issued to non-U.S. residents under an exemption from registration provided by Rule 903 of
Regulation S under the Securities Act Rules. We made no directed selling efforts of these securities within the United States. Each purchaser of
the securities certified that they were not U.S. persons, were not acquiring the securities for the account or benefit of any U.S. person and would
not resell the securities in the U.S. for at least one year
