Formation of AlumiFuel Power International, Inc. ~ AFPW
In February 2010, the Company formed its new subsidiary, AFPI. In connection with the formation of the AFPI, the Company and AFPI executed a License Agreement through which AFPI received certain international marketing rights and the rights to utilize certain intellectual property from the Company for exploitation in countries and territories outside of North America in exchange for 25,000,000 shares of the Company's $0.001 par value common stock. As part of the agreement, AFPI will reimburse the Company, from time-to-time, for reasonable costs and expenses related to the past, present and future development costs of the IP in an amount to be determined by the parties. During the year ended December 31, 2010, that amount totaled $700,000, which was eliminated as an intercompany account in the December 31, 2010 financial statements. In addition, the Company purchased 15,000,000 shares of AFPI common stock at $0.01 per share during 2010. As of June 30, 2011, AFPI has sold 5,852,333 shares of its common stock in private placements in exchange for $591,900. AFPI also issued 29,531 shares of common stock upon the cashless exercise of 35,000 warrants and 1,000,000 shares issued to officers, directors and consultants for $100,000 in management fees due them. An additional 30,000 shares were issued upon the conversion of debt totaling $3,000. In addition, AFPI has issued shares to consultants including 7,500,000 shares valued at $750,000 in 2010 and 500,000 shares valued at $50,000 in 2011. As a result, the total number of AFPI shares outstanding at June 30, 2011 was 54,911,864, of which 14,911,864 is held by shareholders other than the Company representing 27.2% of the outstanding common shares of AFPI as of that date. This represents a non-controlling interest in AFPI that totaled $(54,781) based on AFPI's outstanding total equity of $(201,722) at June 30, 2011. In addition, $57,667 in the net loss of AFPI for the six months ended June 30, 2011 has been attributed to the non-controlling interest of those stockholders.
