Delaware
|
88-0292161
|
|
(State
or other jurisdiction
of
incorporation or organization)
|
(IRS
Employer Identification No.)
|
Large
accelerated filer
o
|
Accelerated
filer
o
|
Non-accelerated
filer o
|
Smaller
reporting company
x
|
Page
|
||
PART
I - FINANCIAL INFORMATION
|
||
Item
1. Financial Statements.
|
3
|
|
Item
2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
|
22
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk.
|
25
|
|
Item
4. Controls and Procedures.
|
26
|
|
PART
II - OTHER INFORMATION
|
||
Item
1. Legal Proceedings.
|
27
|
|
Item
1a. Risk Factors.
|
29
|
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
|
29
|
|
Item
3. Defaults Upon Senior Securities.
|
29
|
|
Item
4. Submission of Matters to a Vote of Security
Holders.
|
29
|
|
Item
5. Other Information.
|
29
|
|
Item
6. Exhibits.
|
29
|
MARCH
31,
2009
(Restated)
|
DECEMBER
31,
2008
(Restated)
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$
|
103,585
|
$
|
4,809
|
||||
Current
assets from discontinued operations
|
6,406
|
6,406
|
||||||
TOTAL
CURRENT ASSETS
|
109,991
|
11,215
|
||||||
Investment
in joint venture
|
3,229,000
|
3,229,000
|
||||||
TOTAL
NONCURRENT ASSETS
|
3,229,000
|
3,229,000
|
||||||
TOTAL
ASSETS
|
$
|
3,338,991
|
$
|
3,240,215
|
||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
LIABILITIES
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
3,824,753
|
$
|
3,802,777
|
||||
Notes
and convertible notes payable, net of discount of $126,072 and
$134,423
|
9,477,557
|
9,264,732
|
||||||
Accrued
expenses and other liabilities
|
3,556,196
|
3,489,210
|
||||||
Fair
value of derivative liabilities
|
677,825
|
748,244
|
||||||
Current
liabilities from discontinued operations
|
1,387,407
|
1,387,406
|
||||||
TOTAL
LIABILITIES
|
18,923,738
|
18,692,369
|
||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS'
DEFICIT
|
||||||||
Series
A Preferred stock, $.001 par value, 250,000 shares
authorized;
|
||||||||
no
shares issued and outstanding:
|
—
|
—
|
||||||
Series
B Preferred stock, $.001 par value, 500,000 shares
authorized;
|
||||||||
no
shares issued and outstanding:
|
—
|
—
|
||||||
Series
C Preferred stock, $.001 par value, 5,000 shares
authorized;
|
||||||||
no
shares issued and outstanding:
|
—
|
—
|
||||||
Series
D Preferred stock, $.001 par value, 5,000 shares
authorized;
|
||||||||
no
shares issued and outstanding:
|
—
|
—
|
||||||
Common
stock, $.00001 par value, 250,000,000 shares authorized;
|
||||||||
189,324,242
and 184,704,015 shares issued and outstanding
|
1,894
|
1,848
|
||||||
Additional
paid-in capital
|
110,165,698
|
109,848,580
|
||||||
Accumulated
deficit
|
(125,752,339
|
)
|
(125,302,582
|
)
|
||||
TOTAL
STOCKHOLDERS' DEFICIT
|
(15,584,747
|
)
|
(15,452,154
|
)
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$
|
3,338,991
|
$
|
3,240,215
|
2009
(Restated)
|
2008
(Restated)
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
REVENUES
|
$
|
—
|
$
|
—
|
||||
COST
OF REVENUES
|
—
|
—
|
||||||
GROSS
MARGIN
|
—
|
—
|
||||||
EXPENSES
|
||||||||
Payroll
and related taxes
|
117,434
|
372,371
|
||||||
Consulting
fees
|
93,159
|
130,730
|
||||||
Noncash
officers' and directors' compensation
|
—
|
285,000
|
||||||
General
and administrative
|
121,491
|
109,792
|
||||||
TOTAL
EXPENSES
|
332,084
|
897,893
|
||||||
LOSS
FROM OPERATIONS
|
(332,084
|
)
|
(897,893
|
)
|
||||
OTHER
INCOME (EXPENSE)
|
||||||||
Loss
on extinguishment of debt
|
—
|
(1,096,650
|
)
|
|||||
Interest
expense, net
|
(188,091
|
)
|
(209,536
|
)
|
||||
Extinguishment
of derivative liabilities
|
—
|
79,923
|
||||||
Change
in fair value of derivative liabilities
|
70,419
|
(601,536
|
)
|
|||||
NET
OTHER INCOME (EXPENSE)
|
(117,672
|
)
|
(1,827,799
|
)
|
||||
LOSS
FROM CONTINUING OPERATIONS
|
(449,756
|
)
|
(2,725,692
|
)
|
||||
LOSS
FROM DISCONTINUED OPERATIONS
|
—
|
(244
|
)
|
|||||
NET
LOSS
|
$
|
(449,756
|
)
|
$
|
(2,725,936
|
)
|
||
WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
||||||||
BASIC
and DILUTED
|
185,472,412
|
136,208,846
|
||||||
LOSS
PER SHARE FROM CONTINUING OPERATIONS
|
||||||||
BASIC
and DILUTED
|
$
|
(
0.00
|
)
|
$
|
(
0.02
|
)
|
||
LOSS
PER SHARE FROM DISCONTINUED OPERATIONS
|
||||||||
BASIC
and DILUTED
|
$
|
(
0.00
|
)
|
$
|
(
0.00
|
)
|
||
NET
LOSS PER SHARE
|
||||||||
BASIC
and DILUTED
|
$
|
(
0.00
|
)
|
$
|
(
0.02
|
)
|
2009
(Restated)
|
2008
(Restated)
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net
loss
|
$
|
(449,756
|
)
|
$
|
(2,725,936
|
)
|
||
Adjustments
to reconcile net loss to net cash used by operating
activities:
|
||||||||
Amortization
of debt discount
|
34,009
|
66,647
|
||||||
Loss
on extinguishment of debt
|
—
|
1,096,650
|
||||||
Stock
based compensation
|
84,500
|
115,000
|
||||||
Fair
value of vested options
|
—
|
244,831
|
||||||
Interest
expense on convertible notes payable
|
142,313
|
142,767
|
||||||
Extinguishment
of derivative liabilities
|
—
|
(79,923
|
)
|
|||||
Change
in fair value of derivative liabilities
|
(70,419
|
)
|
601,536
|
|||||
Decrease
in assets:
|
||||||||
Decrease
in assets relating to discontinued operations
|
—
|
11,956
|
||||||
Increase
in liabilities:
|
||||||||
Accounts
payable
|
21,976
|
47,189
|
||||||
Accrued
expenses and other liabilities
|
96,153
|
253,165
|
||||||
Increase
in liabilities relating to discontinued operations
|
—
|
25
|
||||||
NET
CASH USED BY OPERATING ACTIVITIES
|
(141,224
|
)
|
(226,093
|
)
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
NET
CASH USED BY INVESTING ACTIVITIES
|
—
|
—
|
||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Payments
on notes payable
|
—
|
(25,139
|
)
|
|||||
Proceeds
from notes and loans payable
|
140,000
|
356,278
|
||||||
Proceeds
from sale of common stock
|
100,000
|
—
|
||||||
NET
CASH PROVIDED BY FINANCING ACTIVITIES
|
240,000
|
331,139
|
||||||
NET
INCREASE IN CASH AND EQUIVALENTS
|
98,776
|
105,046
|
||||||
CASH
AND EQUIVALENTS – BEGINNING OF PERIOD
|
4,809
|
32,278
|
||||||
CASH
AND EQUIVALENTS – ENDING OF PERIOD
|
$
|
103,585
|
$
|
137,324
|
||||
SUPPLEMENTAL
DISCLOSURES
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$
|
122
|
$
|
122
|
||||
NON-CASH
INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Shares
issued for joint venture
|
—
|
268,000
|
||||||
Shares
for accrued expenses
|
29,167
|
61,470
|
||||||
Conversion
of notes payable to common stock
|
75,438
|
281,320
|
||||||
Non-cash
equity-warrant valuation and intrinsic value of beneficial conversion
associated with convertible notes
|
84,601
|
129,918
|
Fair
Value Measurements at March 31, 2009
|
||||||||||||||||
Total
Carrying
Value
at
March
31, 2009
|
(Level
1)
|
(Level
2)
|
(Level
3)
|
|||||||||||||
Cash
and cash equivalents
|
$
|
108,671
|
$
|
108,671
|
$
|
—
|
$
|
—
|
||||||||
Derivative
liabilities
|
677,825
|
—
|
—
|
677,825
|
March
31, 2009
|
||||||||||||
Account
|
(As
Initially
Reported)
|
(Adjustment)
|
(As
Restated)
(Unaudited)
|
|||||||||
Current
Assets
|
||||||||||||
Cash
|
$
|
103,585
|
$
|
—
|
$
|
103,585
|
||||||
Current
assets from discontinued operations
|
6,406
|
—
|
6,406
|
|||||||||
Total
current assets
|
109,991
|
—
|
109,991
|
|||||||||
Investment
in joint venture
|
3,229,000
|
—
|
3,229,000
|
|||||||||
Total
Assets
|
$
|
3,338,991
|
$
|
—
|
$
|
3,338,991
|
||||||
Liabilities
and Stockholders’ Deficit
|
||||||||||||
Current
liabilities
|
||||||||||||
Accounts
payable
|
$
|
3,824,753
|
$
|
—
|
$
|
3,824,753
|
||||||
Notes
and notes payable, net of discount of $303,056 and
$126,072
|
9,300,573
|
176,984
|
2
|
9,477,557
|
||||||||
Accrued
expenses and other liabilities
|
3,556,196
|
—
|
3,556,196
|
|||||||||
Derivative
liabilities
|
677,825
|
677,825
|
||||||||||
Current
liabilities from discontinued operations
|
1,387,407
|
—
|
1,387,407
|
|||||||||
Total
current liabilities
|
18,746,754
|
176,984
|
18,923,738
|
|||||||||
Stockholders’
Deficit
|
||||||||||||
Common
stock
|
1,894
|
—
|
1,894
|
|||||||||
Additional
paid-in capital
|
111,294,864
|
(1,129,166
|
)
1
|
110,165,698
|
||||||||
Accumulated
deficit
|
(126,704,521
|
)
|
952,182
|
1, 2
|
(125,752,339
|
)
|
||||||
Total
Stockholders’ Deficit
|
(15,407,763
|
)
|
(176,984
|
)
|
(15,584,747
|
)
|
||||||
Total
Liabilities and Stockholders’ Deficit
|
$
|
3,338,991
|
$
|
—
|
$
|
3,338,991
|
December 31, 2008
|
||||||||||||
Account
|
(As Initially
Reported) |
(Adjustment)
|
(As Restated)
|
|||||||||
Current
Assets
|
||||||||||||
Cash
|
$
|
4,809
|
$
|
—
|
$
|
4,809
|
||||||
Current
assets from discontinued operations
|
6,406
|
—
|
6,406
|
|||||||||
Total
current assets
|
11,215
|
—
|
11,215
|
|||||||||
Investment
in joint venture
|
3,229,000
|
—
|
3,229,000
|
|||||||||
Total
Assets
|
$
|
3,240,215
|
$
|
—
|
$
|
3,240,215
|
||||||
Liabilities
and Stockholders’ Deficit
|
||||||||||||
Current
liabilities
|
||||||||||||
Accounts
payable
|
$
|
3,802,777
|
$
|
—
|
$
|
3,802,777
|
||||||
Notes
and notes payable, net of discount of $134,423
|
9,264,732
|
—
|
9,264,732
|
|||||||||
Accrued
expenses and other liabilities
|
3,489,210
|
—
|
3,489,210
|
|||||||||
Derivative
liability
|
—
|
748,244
|
4
|
748,244
|
||||||||
Current
liabilities from discontinued operations
|
1,387,406
|
—
|
1,387,406
|
|||||||||
Total
current liabilities
|
17,944,125
|
748,244
|
18,692,369
|
|||||||||
Stockholders’
Deficit
|
||||||||||||
Common
stock
|
1,848
|
—
|
1,848
|
|||||||||
Additional
paid-in capital
|
111,128,580
|
(1,280,000
|
) 4
|
109,848,580
|
||||||||
Accumulated
deficit
|
(125,834,338
|
)
|
531,756
|
4
|
(125,302,582
|
)
|
||||||
Total
Stockholders’ Deficit
|
(14,703,910
|
)
|
(748,244
|
)
|
(15,452,154
|
)
|
||||||
Total
Liabilities and Stockholders’ Deficit
|
$
|
3,240,215
|
$
|
—
|
$
|
3,240,215
|
Three Months Ended March 31, 2009
(Unaudited)
|
||||||||||||
Account
|
(As Initially
Reported) |
(Adjustment)
|
(As Restated)
|
|||||||||
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Cost
of revenues
|
—
|
—
|
—
|
|||||||||
Gross
margin
|
—
|
—
|
—
|
|||||||||
Payroll
and related taxes
|
(117,434
|
)
|
—
|
(117,434
|
)
|
|||||||
Consulting
fees
|
(93,159
|
)
|
—
|
(93,159
|
)
|
|||||||
General
and administrative expenses
|
(121,491
|
)
|
—
|
(121,491
|
)
|
|||||||
Loss
from operations
|
(332,084
|
)
|
—
|
(332,084
|
)
|
|||||||
Interest
expense
|
(391,688
|
)
|
203,597
|
3
|
(188,091
|
)
|
||||||
Change
in fair value of warrants and conversion feature
|
70,419
|
—
|
70,419
|
|||||||||
Net
other expense
|
(321,269
|
)
|
203,597
|
(117,672
|
)
|
|||||||
Loss
from continuing operations
|
(653,353
|
)
|
203,597
|
(449,756
|
)
|
|||||||
Loss
from discontinued operations
|
—
|
—
|
—
|
|||||||||
Net
loss
|
$
|
(653,353
|
)
|
$
|
203,597
|
$
|
(449,756
|
)
|
||||
Net
loss per share from continuing operations, basic and
diluted
|
$
|
(0.00
|
)
|
0.00
|
(0.00
|
)
|
||||||
Net
loss per share from discontinuing operations, basic and
diluted
|
$
|
(0.00
|
)
|
—
|
$
|
(0.00
|
)
|
|||||
Weighted
average shares outstanding, basic and diluted
|
185,472,412
|
185,472,412
|
Three Months Ended March 31, 2008
(Unaudited)
|
||||||||||||
Account
|
(As Initially
Reported) |
(Adjustment)
|
(As Restated)
|
|||||||||
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Cost
of revenues
|
—
|
—
|
—
|
|||||||||
Gross
margin
|
—
|
—
|
—
|
|||||||||
Payroll
and related taxes
|
(372,371
|
)
|
—
|
(372,371
|
)
|
|||||||
Consulting
fees
|
(130,730
|
)
|
—
|
(130,730
|
)
|
|||||||
Noncash
officers’ and directors’ compensation
|
(285,000
|
)
|
—
|
(285,000
|
)
|
|||||||
General
and administrative expenses
|
(109,792
|
)
|
—
|
(109,792
|
)
|
|||||||
Loss
from operations
|
(897,893
|
)
|
—
|
(897,893
|
)
|
|||||||
Loss
on extinguishment of debt
|
(1,096,650
|
)
|
—
|
(1,096,650
|
)
|
|||||||
Interest
expense
|
(378,454
|
)
|
168,918
|
5
|
(209,536
|
)
|
||||||
Extinguishment
of derivative liability
|
—
|
79,923
|
7
|
79,923
|
||||||||
Change
in fair value of warrants and conversion feature
|
—
|
(601,536
|
) 6
|
(601,536
|
)
|
|||||||
Net
other expense
|
(1,475,104
|
)
|
(352,695
|
)
|
(1,827,799
|
)
|
||||||
Loss
from continuing operations
|
(2,372,997
|
)
|
(352,695
|
)
|
(2,725,692
|
)
|
||||||
Loss
from discontinued operations
|
(244
|
)
|
—
|
(244
|
)
|
|||||||
Net
loss
|
$
|
(2,373,241
|
)
|
$
|
(352,695
|
)
|
$
|
(2,725,936
|
)
|
|||
Net
loss per share from continuing operations, basic and
diluted
|
$
|
(0.02
|
)
|
(0.00
|
)
|
(0.02
|
)
|
|||||
Net
loss per share from discontinuing operations, basic and
diluted
|
$
|
(0.00
|
)
|
—
|
$
|
(0.00
|
)
|
|||||
Weighted
average shares outstanding, basic and diluted
|
136,208,846
|
136,208,846
|
Three
Months Ended March 31, 2009 (Unaudited)
|
||||||||||||
(As
Initially
Reported) |
(Adjustment)
|
(As
Restated)
|
||||||||||
Cash
flow from operating activities:
|
||||||||||||
Net
loss
|
$
|
(653,353
|
)
|
$
|
203,597
|
$
|
(449,756
|
)
|
||||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Amortization
of debt discount
|
240,007
|
(205,998
|
) 3
|
34,009
|
||||||||
Stock
based compensation
|
84,500
|
—
|
84,500
|
|||||||||
Fair
value of vested options
|
—
|
—
|
—
|
|||||||||
Change
in fair value of derivative liability
|
(70,419
|
)
|
—
|
(70,419
|
)
|
|||||||
Extinguishment
of derivative liability
|
—
|
—
|
—
|
|||||||||
Interest
expense on convertible notes payable
|
139,912
|
2,401
|
3
|
142,313
|
||||||||
Decrease
in assets:
|
||||||||||||
Decrease
in assets relating to discontinued operations
|
—
|
—
|
—
|
|||||||||
Increase
in liabilities:
|
||||||||||||
Accounts
payable
|
21,976
|
—
|
21,976
|
|||||||||
Accrued
expenses and other liabilities
|
96,153
|
—
|
96,153
|
|||||||||
Increase
in liabilities relating to discontinued operations
|
—
|
—
|
—
|
|||||||||
Net
cash used in operating activities
|
(141,224
|
)
|
—
|
(141,224
|
)
|
|||||||
Cash
flows from investing activities:
|
||||||||||||
Net
cash used in investing activities
|
—
|
—
|
—
|
Three
Months Ended March 31, 2009 (Unaudited)
|
||||||||||||
(As
Initially
Reported) |
(Adjustment)
|
(As
Restated)
|
||||||||||
Cash
flows from financing activities:
|
||||||||||||
Proceeds
from notes and loans payable
|
140,000
|
—
|
140,000
|
|||||||||
Proceeds
from sale of common stock
|
100,000
|
—
|
100,000
|
|||||||||
Net
cash provided by financing activities
|
240,000
|
—
|
240,000
|
|||||||||
Net
increase in cash and cash equivalents
|
98,776
|
—
|
98,776
|
|||||||||
Cash
and cash equivalents, beginning of period
|
4,809
|
—
|
4,809
|
|||||||||
Cash
and cash equivalents, end of period
|
$
|
103,585
|
$
|
—
|
$
|
103,585
|
Three
Months Ended March 31, 2008 (Unaudited)
|
||||||||||||
(As
Initially
Reported) |
(Adjustment)
|
(As
Restated)
|
||||||||||
Cash
flow from operating activities:
|
||||||||||||
Net
loss
|
$
|
(2,373,241
|
)
|
$
|
(352,695
|
)
|
$
|
(2,725,936
|
)
|
|||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Amortization
of debt discount
|
66,647
|
—
|
66,647
|
|||||||||
Loss/Gain
on extinguishment of debt
|
1,096,650
|
—
|
1,096,650
|
|||||||||
Stock
based compensation
|
115,000
|
—
|
115,000
|
|||||||||
Fair
value of vested options
|
244,831
|
—
|
244,831
|
|||||||||
Change
in fair value of derivative liability
|
168,918
|
432,618
|
5,6
|
601,536
|
||||||||
Extinguishment
of derivative liability
|
—
|
(79,923
|
) 7
|
(79,923
|
)
|
|||||||
Interest
expense on convertible notes payable
|
142,767
|
—
|
142,767
|
|||||||||
Decrease
in assets:
|
||||||||||||
Decrease
in assets relating to discontinued operations
|
11,956
|
—
|
11,956
|
|||||||||
Increase
in liabilities:
|
||||||||||||
Accounts
payable
|
47,189
|
—
|
47,189
|
|||||||||
Accrued
expenses and other liabilities
|
253,165
|
—
|
253,165
|
|||||||||
Increase
in liabilities relating to discontinued operations
|
25
|
—
|
25
|
|||||||||
Net
cash used in operating activities
|
(226,093
|
)
|
—
|
(226,093
|
)
|
|||||||
Cash
flows from investing activities:
|
||||||||||||
Net
cash used in investing activities
|
—
|
—
|
—
|
|||||||||
Cash
flows from financing activities:
|
||||||||||||
Payments
on notes payable
|
(25,139
|
)
|
—
|
(25,139
|
)
|
|||||||
Proceeds
from notes and loans payable
|
356,278
|
—
|
356,278
|
|||||||||
Net
cash provided by financing activities
|
331,139
|
—
|
331,139
|
|||||||||
Net
increase in cash and cash equivalents
|
105,046
|
—
|
105,046
|
|||||||||
Cash
and cash equivalents, beginning of period
|
32,278
|
—
|
32,278
|
|||||||||
Cash
and cash equivalents, end of period
|
$
|
137,324
|
$
|
—
|
$
|
137,324
|
(1)
|
To
record $952,182 decrease to accumulated deficit for prior period
recognition of derivative liability, and $1,129,166 decrease to additional
paid in capital for cumulative effect of correction of accounting for
warrants and conversion feature of convertible notes as derivative
liabilities.
|
|
(2)
|
To
record $176,984 decrease in note discount for the three months ended March
31, 2009.
|
|
(3)
|
To
record $203,597 decrease in interest expense for the three ended March 31,
2009.
|
|
(4)
|
To
record $748,244 increase to derivative liability, $531,756 decrease to
accumulated deficit for prior period recognition of derivative liability,
and $1,280,000 decrease to additional paid in capital for cumulative
effect of correction of accounting for warrants and conversion feature of
convertible notes as derivative liabilities.
|
|
(5)
|
To
record $168,918 from interest expense to change in derivative liability
for the three months ended March 31, 2008.
|
|
(6)
|
To
record $601,536 increase in derivative liability for the three months
ended March 31, 2008.
|
|
(7)
|
To
record $79,923 decrease from extinguishment of derivative liability for
the three months ended March 31,
2008.
|
March
31,
2009
|
December
31,
2008
|
|||||||
Conversion
feature:
|
||||||||
Risk-free
interest rate
|
0.21 – 0.81
|
%
|
0.27 – 0.76
|
%
|
||||
Expected
volatility
|
118
- 143
|
%
|
118
- 134
|
%
|
||||
Expected
life (in years)
|
0.39 – 1.87
|
0.33 - 1.76
|
||||||
Expected
dividend yield
|
—
|
—
|
||||||
Warrants:
|
||||||||
Risk-free
interest rate
|
0.17 – 1.15
|
%
|
0.11 – 1.00
|
%
|
||||
Expected
volatility
|
40
- 174
|
%
|
28
- 167
|
%
|
||||
Expected
life (in years)
|
0.16 – 2.89
|
0.01 – 2.74
|
||||||
Expected
dividend yield
|
—
|
—
|
||||||
Fair
value:
|
||||||||
Conversion
feature
|
$
|
412,210
|
$
|
495,805
|
||||
Warrants
|
$
|
265,615
|
$
|
252,439
|
Telecom
|
2009
|
2008
|
||||||
Loss
from discontinued operations
|
$
|
—
|
$
|
(244
|
)
|
|||
GlobeTel
Wireless
|
||||||||
Loss
from discontinued operations
|
—
|
—
|
||||||
Total
loss from discontinued operations
|
$
|
—
|
$
|
(244
|
)
|
MARCH
31, 2009 (Unaudited)
|
Telecom
|
GlobeTel
Wireless
|
Total
|
|||||||||
Loss
from discontinued operations
|
$
|
—
|
$
|
—
|
$
|
—
|
MARCH
31, 2008 (Unaudited)
|
Telecom
|
GlobeTel
Wireless
|
Total
|
|||||||||
General
and administrative
|
$
|
(244
|
)
|
$
|
—
|
$
|
(244
|
)
|
||||
Loss
from discontinued operations
|
$
|
(244
|
)
|
$
|
—
|
$
|
(244
|
)
|
MARCH
31, 2009 (Unaudited)
|
Telecom
|
GlobeTel
Wireless
|
Total
|
|||||||||
Cash
|
$
|
6,406
|
$
|
—
|
$
|
6,406
|
||||||
Total
assets
|
$
|
6,406
|
$
|
—
|
$
|
6,406
|
||||||
Accounts
payable
|
140,116
|
1,216,208
|
1,356,324
|
|||||||||
Accrued
liabilities
|
9,605
|
21,477
|
31,082
|
|||||||||
Total
current liabilities
|
149,721
|
1,237,685
|
1,387,406
|
|||||||||
Net
liabilities of discontinued operations
|
$
|
143,315
|
$
|
1,237,685
|
$
|
1,381,000
|
DECEMBER
31, 2008
|
Telecom
|
GlobeTel
Wireless
|
Total
|
|||||||||
Cash
|
$
|
6,406
|
$
|
—
|
$
|
6,406
|
||||||
Total
assets
|
$
|
6,406
|
$
|
—
|
$
|
6,406
|
||||||
Accounts
payable
|
140,116
|
1,216,208
|
1,356,324
|
|||||||||
Accrued
liabilities
|
9,605
|
21,477
|
31,082
|
|||||||||
Total
current liabilities
|
149,721
|
1,237,685
|
1,387,406
|
|||||||||
Net
liabilities of discontinued operations
|
$
|
143,315
|
$
|
1,237,685
|
$
|
1,381,000
|
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
(A)
Notes payable
|
$
|
5,997,030
|
$
|
5,997,030
|
||||
(B)
Convertible notes payable, net of unamortized discount of $0 and
$0
|
80,000
|
80,000
|
||||||
(C)
Convertible promissory notes, net of unamortized discount of $126,072 and
$134,423
|
2,090,263
|
2,016,913
|
||||||
Total
|
8,167,293
|
8,093,943
|
||||||
Accrued
Interest
|
1,310,264
|
1,170,789
|
||||||
Total
|
$
|
9,477,557
|
$
|
9,264,732
|
Number
of Options
(in
shares)
|
Weighted
Average
Exercise
Price
|
|||||||
Outstanding
at December 31, 2008
|
15,982,752
|
$
|
.350
|
|||||
Options
Granted
|
—
|
—
|
||||||
Options
Forfeited
|
—
|
—
|
||||||
Options
Cancelled
|
—
|
—
|
||||||
Outstanding
at March 31, 2009
|
15,982,752
|
$
|
.350
|
Warrants
Class
A
|
Warrants
Class
B
|
Weighted
Average
Exercise
Price
|
||||||||||
Outstanding
at December 31, 2008
|
13,987,204
|
9,634,763
|
$
|
0.253
|
||||||||
Warrants
Granted
|
666,667
|
444,444
|
0.252
|
|||||||||
Warrants
Expired
|
3,305,383
|
2,203,589
|
0.252
|
|||||||||
Outstanding
at March 31, 2009
|
11,348,488
|
7,875,618
|
$
|
0.253
|
c.
|
Seeking
outside review of acquisition
transactions
|
d.
|
Establishment
of an audit committee
|
e.
|
Upon
adequate funding, hiring additional staff leading to the segregation of
duties to enable a better control
environment
|
a.
|
Seeking
to recruit board members independent of
management;
|
b.
|
Granting
Board committees standing authority to retain counsel and special or
expert advisors of their own
choice;
|
c.
|
Seeking
outside review of acquisition
transactions
|