From the third quarter financials, I think it is now easy to see where all the selling came from. Moro has been using a lot of stock as compensation for funding. He had to provide a selling event for these people to get their money and if they had sold the shares without the recent push, it would have devastated the stock price. Moro was between a rock and a hard spot. They wanted their money from the stock sooner than later. They were undoubtedly NOT believers in RECAF, Just believers in "give me the money now".
This selling was most likely not about anyone worried about a product return. I was astonished at the number of shares. I am not going to do it but if someone adds them up, it will be in the millions.
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In July 2006, a note payable in the amount of $61,890 was converted into 343,833 units at $0.18 per unit. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.20 per share expiring on July 7, 2011. In accordance with EITF 00-27, the Company recognized $29,506 for the intrinsic value of the embedded conversion option.
In July 2006, a note in the amount of $11,655 was converted into 233,092 units at $0.05 per unit. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.055 per share expiring on July 7, 2011. In accordance with EITF 00-27, the Company recognized $5,565 for the intrinsic value of the embedded conversion option.
In July 2006, a note payable in the amount of $65,000 was converted into 590,909 units at $0.11 per unit. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.12 per share expiring on July 19, 2011. In accordance with EITF 00-27, the Company recognized $30,089 for the intrinsic value of the embedded conversion option.
8. COMMON STOCK
a) In September 2006, the Company received stock subscriptions for 1,995,000 units at $0.50 per unit for proceeds of $997,500. Each unit will consist of one common shares and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.90 per share expiring on September 1, 2008.
b) In September 2006, the Company issued 460,000 units at $0.50 per unit for proceeds of $230,000. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.90 per share expiring on September 1, 2008.
c) In September 2006, the Company issued 100,000 shares of common stock to a consulting firm at a fair value of $80,000 for consulting service rendered.
d) In September 2006, the Company issued 15,000 shares of common stock at a fair value of $8,250 to settle debt.
e) In September 2006, the Company issued 200,000 shares of common stock at a fair value of $160,000 to settle debt.
f) In July 2006, the Company issued 150,000 units at a $0.50 per unit for proceeds of $75,000. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.80 per share expiring on April 15, 2008.
g) In July 2006, the Company issued 110,000 units at $0.70 per unit for proceeds of $77,000. Each unit consisted of one common share and one-half share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one common share at an exercise price of $1.00 per share expiring on April 15, 2008.
h) In July 2006, the Company issued a total of 75,000 shares of common stock to two consultants at a fair value of $54,372 for consulting services rendered, of which $52,869 was expensed and $1,503 was recorded as prepaid expenses as at September 30, 2006.
i) In July 2006, a note payable in the amount of $61,890 was converted into 343,833 units. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase a common share at an exercise price of $0.20 per share expiring on July 7, 2011.
j) In July 2006, a note payable in the amount of $11,655 was converted into 233,092 units. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.055 per share expiring on July 7, 2011.
k) In July 2006, a note payable in the amount of $65,000 was converted into 590,909 units. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.12 per share expiring on July 19, 2011.
l) In June 2006, the Company issued 90,000 shares of common stock at a fair value of $85,500 to settle debt.
m) In June 2006, the Company issued 25,000 shares of common stock at the fair value of $37,500 for consulting services.
n) In April 2006, the Company issued 150,000 units at $0.50 per unit for proceeds of $75,000. Each unit consisted of one common share and one share purchase warrant entitling the holder to purchase one common share at an exercise price of $0.80 per share expiring on April 15, 2008.
o) In February 2006, the Company issued 6,850 shares of common stock at a fair value of $5,000 to settle debt.
p) In January 2006, the Company issued 206,250 shares of common stock at a fair value of $161,187 to settle debt.
q) In January 2006, the Company issued 1,219,244 shares of common stock for common share subscriptions totaling $85,962 received in December 2005 pursuant to the exercise of warrants.
9. COMMITMENTS AND CONTINGENCIES
a) In September 2003 a lawsuit was filed against the Company seeking the payment of $13,623 in professional fees purported to be owing. The Company plans to vigorously defend the action. The full amount of $13,623 has been included in accounts payable and was charged to operations in fiscal 2003.
b) In April 2006, the Company entered into agreements with two consultants to issue a total of 150,000 shares of common stock. A total of 75,000 shares of common stock were issued in July 2006. See Note 8(h).
10. SUBSEQUENT EVENTS
a) In October 2006, the Company issued a total of 1,995,000 units for proceeds of $997,500, which were recorded as common stock subscribed as at September 30, 2006. See Note 8(a).
b) In October 2006, the Company issued 225,000 shares of common stock and 150,000 warrants with an exercise price of $0.85 per share expiring on October 20, 2008 and paid $75,000 to a consultant for services to be rendered.
c) In October 2006, the Company issued 90,000 shares of common stock to settle debt of $32,431.
