Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS
VoiceServe, Inc. (“VoiceServe”) was incorporated in the State of Delaware on December 9, 2005 under the name 4306, Inc. On February 20, 2007, VoiceServe acquired 100% of the issued and outstanding stock of VoiceServe Limited (“Limited”), a corporation incorporated in the United Kingdom on March 21, 2002, in exchange for 20,000,000 shares of VoiceServe common stock (representing 100% of the issued and outstanding shares of VoiceServe after the exchange). From October 1, 2006 to February 20, 2007, Limited owned 100% of the issued and outstanding shares of VoiceServe. Accordingly, this acquisition was treated as a combination of entities under common control and was accounted for in a manner similar to pooling of interests accounting.
On January 15, 2008, VoiceServe acquired 100% of the issued and outstanding stock of VoipSwitch Inc. (“VoipSwitch”), a corporation incorporated in the Republic of Seychelles on May 9, 2005 (see Note 4). VoipSwitch licensed software systems (online telephony management applications) to customers online. Generally, the license of a system includes remote installation and initial configuration of the main system, training relating to the use of the system and modules, and 1 year technical support.
VoiceServe has had no operations; VoiceServe is a holding company for its wholly owned subsidiaries Limited (since February 20, 2007) and VoipSwitch (since January 15, 2008). In 2010, Voiceserve formed two additional subsidiaries: VoipSwitch Inc., a Delaware corporation, and VoipSwitch AG, a Swiss corporation. VoipSwitch Inc. was formed to provide a future North American presence and has had no significant operations to date. VoipSwitch AG was formed to coordinate sales and billing activities from Switzerland and commenced operations in the three months ended December 31, 2010.
Limited is engaged in the telephone communications business from its London, United Kingdom office. Limited offers its software to large enterprises and carriers. The software allows communication through the Company’s exchange via the internet. Since January 15, 2008, Limited has also licensed VoipSwitch software systems.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
NOTE 2 – INTERIM FINANCIAL STATEMENTS
The unaudited financial statements as of June 30, 2012 and for the three months ended June 30, 2012 and 2011 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with instructions to Form 10-Q. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position as of June 30, 2012 and the results of operations and cash flows for the three months ended June 30, 2012 and 2011. The financial data and other information disclosed in these notes to the interim financial statements related to these periods are unaudited. The results for the three month period ended June 30, 2012 are not necessarily indicative of the results to be expected for any subsequent quarter of the entire year ending March 31, 2013. The balance sheet at March 31, 2012 has been derived from the audited financial statements at that date.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the Securities and Exchange Commission’s rules and regulations. These unaudited financial statements should be read in conjunction with our audited financial statements and notes thereto for the year ended March 31, 2012 as included in our report on Form 10-K filed July 16, 2012.
NOTE 3 – RESTATEMENT
During November 2012, the Company identified an error in the accounting for common shares issued for services during April 2012. The Company incorrectly applied a 50% discount to the market price of the Company’s common stock when determining the fair value of the common shares.In addition, the Company discovered an aggregate of 1,800,000 common shares granted for services during April 2012 that were not accounted for. This resulted in an adjustment to the previously reported amounts in the consolidated financial statements as of June 30, 2012 and for the three months then ended as restated in this Form 10Q/A.
The correction impacts the consolidated balance sheet as of June 30, 2012 and the consolidated statements of operations and cash flows for the three months ended June 30, 2012 which are restated herein to reflect the cumulative effect of the errors described above. The tables below summarize the impact of this restatement:
|
|
June 30, 2012
|
|
Consolidated Balance Sheet:
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Restated
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock, $.001 par value; authorized
|
|
|
|
|
|
|
|
|
|
100,000,000 shares, issued and outstanding
|
|
|
|
|
|
|
|
|
|
49,385,198 and 44,585,198 shares, respectively
|
|
$
|
47,585
|
|
|
$
|
1,800
|
|
|
$
|
49,385
|
|
Additional paid-in capital
|
|
|
6,702,007
|
|
|
|
1,281,600
|
|
|
|
7,983,607
|
|
Accumulated deficit
|
|
$
|
(5,620,312
|
)
|
|
$
|
(1,283,400
|
)
|
|
$
|
(6,903,712
|
)
|
|
|
Three Months Ended June 30, 2011
|
|
Consolidated Statement of Operations and Comprehensive Income (Loss):
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Restated
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
959,827
|
|
|
$
|
851,400
|
|
|
$
|
1,811,227
|
|
Total operating expenses
|
|
|
959,827
|
|
|
|
851,400
|
|
|
|
1,811,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations
|
|
|
(355,577
|
)
|
|
|
(851,400
|
)
|
|
|
(1,206,977
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
33,115
|
|
|
$
|
(851,400
|
)
|
|
$
|
(818,285
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic and diluted
|
|
$
|
0.00
|
|
|
$
|
(0.02
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding - basic and diluted
|
|
|
46,958,824
|
|
|
|
2,426,374
|
|
|
|
49,385,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
33,115
|
|
|
|
(851,400
|
)
|
|
|
(818,285
|
)
|
Foreign exchange translation adjustment
|
|
|
21,290
|
|
|
|
-
|
|
|
|
21,290
|
|
Comprehensive loss
|
|
$
|
54,263
|
|
|
$
|
(851,400
|
)
|
|
$
|
(796,995
|
)
|
|
|
Three Months Ended June 30, 2011
|
|
Consolidated Statement of Cash Flows:
|
|
As Reported
|
|
|
Adjustments
|
|
|
As Restated
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
33,115
|
|
|
$
|
(851,400
|
)
|
|
$
|
(818,285
|
)
|
Adjustments to reconcile net income (loss) to net
|
|
|
|
|
|
|
|
|
|
|
|
|
cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
|
|
394,345
|
|
|
|
851,400
|
|
|
|
1,245,745
|
|
Net cash used in operating activities
|
|
$
|
(16,627
|
)
|
|
$
|
-
|
|
|
$
|
(16,627
|
)
|
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
|
Principles of Consolidation
|
The consolidated financial statements include the accounts of VoiceServe and its wholly owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.
(b)
|
Basis of presentation
|
The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).
The financial statements have been prepared on a “going concern” basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as of June 30, 2012, the Company had working capital of $85,298. Further, since inception, the Company has incurred losses of $5,620,312. These factors raise substantial doubt as to the Company’s ability to continue as a going concern.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
The Company plans to improve its financial condition by raising capital through sales of shares of its common stock. Also, the Company plans to pursue new customers and certain acquisition prospects to attain profitable operations. However, there is no assurance that the Company will be successful in accomplishing these objectives. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
(d)
|
Fair Value of Financial Instruments
|
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses payable, and loans payable to related parties. The fair value of these financial instruments approximate their carrying amounts reported in the balance sheets due to the short term maturity of these instruments.
(e)
|
Foreign Currency Translation
|
The functional currency of VoiceServe is the United States dollar. The functional currency of Limited is the United Kingdom pound sterling (“£”). The functional currency of VoipSwitch is the United States dollar. The functional currency of VoipSwitch AG is the Swiss Franc (“chf”). The reporting currency of the Company is the United States dollar. Limited’s assets and liabilities are translated into United States dollars at period-end exchange rates ($1.57065 and $1.586475 at June 30, 2012 and March 31, 2012, respectively). Limited’s revenue and expenses are translated at weighted average exchange rates ($1.579953 and $1.631476 for the three months ended June 30, 2012 and 2011, respectively). VoipSwitch AG’s assets and liabilities are translated into United States dollars at the period end exchange rates ($1.055242 and $1.091597 at June 30, 2012 and March 31, 2012, respectively). VoipSwitch AG’s revenue and expenses are translated into United States dollars at the weighted average exchange rate ($1.06928 and $1.152158 for the three months ended June 30, 2012 and 2011, respectively,). Translation adjustments are included in accumulated other comprehensive income in the stockholders’ equity section of the balance sheets.
Foreign currency exchange transaction losses (which are included in selling general and administrative expenses) were $1,927 and $889 for the three months ended June 30, 2012 and 2011, respectively.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
(f)
|
Cash and Cash Equivalents
|
The Company considers all liquid investments purchased with a maturity of three months or less to be cash equivalents.
(g)
|
Property and Equipment, Net
|
Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated using an accelerated declining balance method over the estimated useful lives of the respective assets.
Intangible assets, net are stated at their estimated fair values at date of acquisition less accumulated amortization. Amortization is calculated using the straight-line method over the estimated economic lives of the respective assets.
(i)
|
Goodwill and Intangible Assets with Indefinite Lives
|
The Company does not amortize goodwill and intangible assets with indefinite useful lives, but instead tests for impairment at least annually. When conducting the annual impairment test for goodwill, the Company compares the estimated fair value of a reporting unit containing goodwill to its carrying value. If the estimated fair value of the reporting unit is determined to be less than its carrying value, goodwill is reduced and an impairment loss is recorded.
The Company reviews long-lived assets held and used, intangible assets with finite useful lives and assets held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows associated with the asset is compared to the asset’s carrying amount to determine if a write-down is required. If the undiscounted cash flows are less than the carrying amount, an impairment loss is recorded to the extent that the carrying amount exceeds the fair value.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
Revenues from licenses of software are recognized upon delivery of the software when persuasive evidence of an arrangement exists, the fee is fixed or determinable, and collectibility is probable. The portion of the fee allocated to post contract customer support and services is recognized ratably over the period of the agreed support and services.
Advertising costs, which include sales promotion costs, are expensed as incurred and amounted to $87,214 and $76,634 for the three months ended June 30, 2012 and 2011, respectively.
(m)
|
Stock-Based Compensation
|
Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation”.
In addition to requiring supplemental disclosures, ASC 718,
Compensation – Stock Compensation
, addresses the accounting for share-based payment transactions in which a company receives goods in exchange for (a) equity instruments of the company or (b) liabilities that are based on the fair value of the company’s equity instruments or that may be settled by the issuance of such equity instruments. FASB ASC 718 focuses primarily on accounting for transactions in which a company obtains employee services in share-based payment transactions.
References to the issuances of restricted stock refer to stock of a public company issued in private placement transactions to individuals who are eligible to sell all or some of their shares of restricted Common Stock pursuant to Rule 144 promulgated under the Securities Act of 1933 (“Rule 144”), subject to certain limitations. In general, pursuant to Rule 144, a stockholder who is not an affiliate and has satisfied a six-month holding period may sell all of his restricted stock without restriction, provided that the Company has current information publicly available. Rule 144 also permits, under certain circumstances, the sale of restricted stock, without any limitations, by a non-affiliate of the Company that has satisfied a one- year holding period.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
Income taxes are accounted for under the assets and liability method. Current income taxes are provided in accordance with the laws of the respective taxing authorities. Deferred income taxes are provided for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.
(o)
|
Net Income (Loss) per Share
|
Basic net income (loss) per share is computed on the basis of the weighted average number of common shares outstanding during the period.
Diluted net income (loss) per share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. For the three months ended June 30, 2012 and 2011, the diluted net loss per share calculation excluded the effect of stock options outstanding and exercisable into a total of 2,403,000 and 1,903,000 shares of common stock, respectively, and warrants outstanding and exercisable into a total of 3,295,385 and 3,295,385 shares of common stock, respectively.
NOTE 4 – ACQUISITION OF VOIPSWITCH INC.
On January 15, 2008, VoiceServe closed an Acquisition Agreement with VoipSwitch Inc. (“VoipSwitch”) whereby VoiceServe acquired all VoipSwitch issued and outstanding ordinary shares as well as all of VoipSwitch’s assets, including customer orders and intangible assets, for
total consideration of $3,000,000 ($450,000 cash, $150,000 notes payable due on demand, $600,000 notes payable in total monthly installments of $50,000 per month for 12 months, and 3,750,000 shares of VoiceServe common stock valued at $0.48 per share or $1,800,000).
Payment of the monthly installments of the $600,000 notes payable was contingent upon and limited each month to the future monthly net income of VoipSwitch. Accordingly, pursuant to SFAS No. 141, this $600,000 “contingent consideration” portion of the $3,000,000 total purchase price was not included in the initial recorded cost of the acquisition or the recorded notes payable. As payments of the $600,000 notes payable were made, such paid amounts were added to goodwill.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
The estimated fair values of the identifiable net assets of VoipSwitch at January 15, 2008 (date of acquisition) consisted of:
Cash and cash equivalents
|
|
$
|
6,682
|
|
Developed software (for licensing to customers)
|
|
|
2,000,000
|
|
In-place contracts and customer list
|
|
|
100,000
|
|
Trade name
|
|
|
100,000
|
|
Accounts payable and accrued expenses
|
|
|
(2,999
|
)
|
Deferred software license fees
|
|
|
(48,474
|
)
|
|
|
|
|
|
Identifiable net assets
|
|
$
|
2,155,209
|
|
Goodwill of $244,791 (excess of the $2,400,000 consideration, excluding the $600,000 contingent consideration, over the $2,155,209 identifiable net assets) was recorded at the acquisition date January 15, 2008. In February and March 2008, $100,000 of the $600,000 “contingent consideration” notes payable was paid and added to goodwill. In the year ended March 31, 2009, an additional $99,000 of the $600,000 “contingent consideration” notes payable was paid and added to goodwill. In the three months ended June 30, 2009, an additional $88,000 of the $600,000 “contingent consideration” notes payable was paid and added to goodwill.
On December 7, 2010, pursuant to a verbal agreement on October 19, 2010, Voiceserve issued a total of 2,250,000 SEC Rule 144 restricted shares of its common stock to the three sellers of VoipSwitch in full and final satisfaction of debt totaling $463,000, consisting of the $150,000 demand note payable and the remaining $313,000 “contingent consideration” potential amount due the three sellers. The $131,250 excess of the $281,250 estimated fair value of the shares, which was calculated based on the October 19, 2010 nearest day closing trading price of $0.25 per share and a 50% restricted stock discount (2,250,000 shares x $0.125 [50% discount applied to $0.25 per share price] per share = $281,250), over the $150,000 demand note payable was added to goodwill.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
NOTE 5 – INTANGIBLE ASSETS, NET
Intangible assets, net, consisted of:
Developed software (for licensing to customers)
|
|
$
|
2,000,000
|
|
|
$
|
2,000,000
|
|
In-place contracts and customer list
|
|
|
100,000
|
|
|
|
100,000
|
|
Trade name
|
|
|
100,000
|
|
|
|
100,000
|
|
Goodwill
|
|
|
663,041
|
|
|
|
663,041
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,863,041
|
|
|
|
2,863,041
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization
|
|
|
1,025,417
|
|
|
|
967,917
|
|
|
|
|
|
|
|
|
|
|
Intangible assets, net
|
|
$
|
1,837,624
|
|
|
$
|
1,895,124
|
|
The developed software, in-place contracts and customer list, and trade name are amortized using the straight-line method over their estimated economic lives (ten years for the developed software and trade name; five years for the in-place contracts and customer list). Goodwill is not amortized.
For the three months ended June 30, 2012 and 2011, amortization of intangible assets expense was $57,500. $50,000 was included in cost of software license fees and $7,500 was included in selling, general and administrative expenses.
Expected future amortization expense for acquired intangible assets as of June 30, 2012 follows:
Year ending March 31
,
|
|
Amount
|
|
|
|
|
|
2013
|
|
|
168,333
|
|
2014
|
|
|
210,000
|
|
2015
|
|
|
210,000
|
|
2016
|
|
|
210,000
|
|
2017
|
|
|
210,000
|
|
Thereafter
|
|
|
166,250
|
|
|
|
|
|
|
Total
|
|
$
|
1,174,583
|
|
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
NOTE 6 – DEFERRED SOFTWARE LICENSE FEES AND SUPPORT
The licenses of the VoipSwitch systems generally include certain post contract customer support (“PCS”). In accordance with Accounting Standards Codification (“ASC”) Topic 985-605-25, “Software Revenue Recognition”, the Company allocates a portion of the license fees to PCS based on the vendor-specific objective evidence of fair value (generally $1000 for 1 year technical support) of the PCS and recognizes the PCS revenues ratably over the period of the agreed PCS.
Deferred software license fees (attributable to PCS) for the three months ended June 30, 2012 and 2011 were accounted for as follows:
|
|
2012
|
|
|
2011
|
|
Balance, beginning of period
|
|
$
|
181,503
|
|
|
$
|
188,197
|
|
Additions
|
|
|
121,234
|
|
|
|
61,967
|
|
Recognized as revenue
|
|
|
(74,187
|
)
|
|
|
(41,625
|
)
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
228,550
|
|
|
$
|
208,539
|
|
NOTE 7 – LOANS PAYABLE TO RELATED PARTIES
Loans payable to related parties consisted of:
|
|
June 30, 2012
|
|
|
March 31, 2012
|
|
Due chairman of the board of directors
|
|
$
|
22,596
|
|
|
$
|
22,840
|
|
Due chief operational officer
|
|
|
15,107
|
|
|
|
15,389
|
|
Due former chief financial officer
|
|
|
79
|
|
|
|
79
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
37,782
|
|
|
$
|
38,308
|
|
The loans payable to related parties are all non-interest bearing, unsecured, and due on demand.
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
NOTE 8 – LIABILITY FOR COMMON STOCK PURCHASE WARRANTS
As part of the private placement which closed on May 26, 2010, the Company issued a total of 1,380,000 warrants to certain accredited investors. Each warrant entitles the holder to purchase one share of common stock at a price of $0.50 per share (the “Exercise Price”) to May 26, 2015.
As part of the private placement which closed on June 6, 2011 (see Note 9), the Company issued a total of 1,915,385 warrants to certain accredited investors. Each warrant entitles the holder to purchase one share of common stock at a price of $0.30 per share (the “Exercise Price”) to June 6, 2014.
The Exercise Price of the warrants is to be adjusted in the event of any stock splits or stock dividends or in the event that the Company issues or sells any shares of common stock, options, warrants or any convertible instruments (other than exempted issuances) at an effective price per share which is less than the Exercise Price. Accordingly, in accordance with EITF Issue No. 07-05, "Determining whether an Instrument (or Embedded Feature) is indexed to an Entity's Own Stock", the Company reflected the $457,608 fair value of the warrants issued on May 26, 2010 (calculated using the Black-Scholes option pricing model and the following assumptions: stock price of $0.45 per share, exercise price of $0.50 per share, risk-free interest rate of 2.06%, term of five years, and expected volatility of 100%) and the $214,122 fair value of the warrants issued on June 6, 2011 (calculated using the Black-Scholes option pricing model and the following assumptions: stock price of $0.15 per share for the 1,311,539 warrants sold May 6, 2011 and $0.318 per share for the 603,846 warrants sold June 6, 2011, exercise price of $0.30 per share, risk free interest rate of 0.96% for the 1,311,539 warrants sold May 6, 2011 and 0.74% for the 603,846 warrants sold June 6, 2011, term of 3 years, and expected volatility of 100%) as a liability and remeasures the fair value of the warrants each quarter, adjusts the liability balance, and reflects changes in operations as “income (expense) from revaluation of liability for common stock purchase warrants”.
At June 30, 2012 and March 31, 2012, the fair values of the warrants (calculated using the Black-Scholes option pricing model with the following assumptions at June 30, 2012: stock price of $0.25 per share, risk free rate interest rates ranging from 0.32% to 0.40%, terms ranging from 1.93 years to 2.90 years, and expected volatility of 191% and at March 31, 2012: stock price of $0.37 per share, risk-free interest rates ranging from 0.37% to 0.55%, terms ranging from 2.21 years to 3.15 years, and expected volatility of 191%) consisted of:
VOICESERVE, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2012
(Unaudited)
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June 30, 2012
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March 31, 2012
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Common
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Common
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Shares
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Fair
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Shares
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Fair
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Equivalent
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Value
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Equivalent
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Value
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Warrants issued May 26, 2010,
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exercise price of $0.50 per share, expiration
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date May 26, 2015.
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1,380,000
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$
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295,873
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1,380,000
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$
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457,332
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Warrants issued June 6, 2011,
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exercise price of $0.30 per share, expiration
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date June 6, 2014.
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1,915,385
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382,310
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1,915,385
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609,476
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Totals
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3,295,385
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$
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678,183
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3,295,385
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$
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1,066,808
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