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NOTE 12 - Stockholders' (Deficiency) Equity
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12 Months Ended |
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Mar. 31, 2012
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| Stockholders' Equity Note Disclosure [Text Block] |
NOTE 12 —
Stockholders’ (Deficiency) Equity
Authorized
Capital
The
Company is authorized to issue up to 100,000,000 shares
of common stock with a par value of $0.0001 per share and
5,000,000 shares of convertible preferred stock with a
par value of $0.0001 per share.
Description
of Common Stock
Each
share of common stock has the right to one vote. The holders
of common stock are entitled to dividends when funds are
legally available and when declared by the board of
directors.
On
December 22, 2011, the Company entered into agreements with
institutional and accredited investors to issue 1,809,653
shares of its common stock at $1.15 per share, with no
warrant coverage, yielding gross proceeds of $2,081,000 and
net proceeds of $1,894,000 after deducting placement agent
commissions of $145,000 and other offering costs of $42,000.
The offering closed on December 28, 2011.
Common
Stock Issued to Non-Employees For Services
On April 24, 2009, the Company
entered into an agreement with Advocos LLC, a contract sales
organization that serves as part of the Company’s sales
force, for the sale of the Company’s wound care
products in the United States. Pursuant to the agreement, the
Company agreed to pay the contract sales organization a
monthly fee and potential bonuses that will be based on
achievement of certain levels of sales. The Company agreed to
issue the contract sales organization shares of common stock
each month as compensation for its services. During the years
ended March 31, 2012 and 2011, the Company issued 99,257 and
44,400 shares of common stock, respectively, in connection
with this agreement. The Company has determined that the fair
value of the common stock, which was calculated as shares
were issued, was more readily determinable than the fair
value of the services rendered. Accordingly, the Company
recorded the fair market value of the stock as compensation
expense. During the years ended March 31, 2012 and 2011, the
Company recorded $167,000 and $82,000 of stock compensation
expense related to this agreement, respectively. The expense
was recorded as selling, general and administrative expense
in the accompanying consolidated statements of
operations.
On
December 17, 2009, the Company entered into an agreement with
Windsor Corporation. Windsor Corporation provides
financial advisory services to the Company. Pursuant to the
agreement, the Company agreed to pay Windsor Corporation, on
a quarterly basis, common stock as compensation for services
provided. The Company determined that the fair value of
the common stock was more readily determinable than the fair
value of the services rendered. Accordingly, the Company
recorded the fair market value of the stock as compensation
expense. During the years ended March 31, 2012 and 2011, the
Company issued 83,146 and 84,354 shares of common stock,
respectively. During the years ended March 31, 2012 and
2011, the Company recorded $135,000 and $156,000,
respectively, of stock compensation expense related to this
agreement which was recorded as selling, general and
administrative expense in the accompanying consolidated
statement of operations.
On
May 19, 2010, the Company issued common stock to Life Tech
Capital, a Division of Aurora Capital, LLC, for providing
financial advisory services. The Company agreed to pay Life
Tech Capital, a Division of Aurora Capital, LLC, 20,000
shares of common stock for the services provided. The
Company determined the fair value of the common stock was
more readily determinable than the fair value of the services
rendered. The aggregate fair value of the common stock
amounted to $44,000. Accordingly, during the year ended
March 31, 2011, the Company recorded $44,000 of expense
related to this agreement which was recorded as selling,
general and administrative expense in the accompanying
consolidated statement of operations.
On
May 19, 2010, the Company issued common stock to Acute Care
Partners, Inc., for providing recruiting and other management
services. The Company agreed to pay Acute Care Partners, Inc.
50,000 shares of common stock for the services
provided. The Company determined that the fair value of
the common stock was more readily determinable than the fair
value of the services rendered. The aggregate fair
value of common stock amounted to $111,000.
Accordingly, during the year ended March 31, 2011, the
Company recorded $111,000 of expense related to this
agreement which was recorded as selling, general and
administrative expense in the accompanying consolidated
statement of operations.
On
September 9, 2010, the Company entered into an agreement with
Vista Partners LLC, for providing financial advisory
services. Pursuant to the agreement, the Company agreed to
pay Vista Partners, LLC common stock as compensation for
services provided. The Company determined that the
fair value of the common stock was more readily determinable
than the fair value of the services rendered. Accordingly,
the Company recorded the fair market value of the stock as
compensation expense. During the years ended March 31, 2012
and 2011, the Company issued 85,000 and 55,000 shares of
common stock, respectively, in connection with this
agreement. During years ended March 31, 2012 and
2011, the Company recorded $151,000 and $90,000,
respectively, of stock compensation expense related to this
agreement. The expense was recorded as selling, general and
administrative expense in the accompanying condensed
consolidated statements of operations.
On
April 1, 2011, the Company entered into an agreement with
NetGain Financial, Inc., for providing financial advisory
services. Pursuant to the agreement, the Company agreed to
pay NetGain Financial, Inc. common stock as compensation for
services provided. The Company determined that the
fair value of the common stock was more readily determinable
than the fair value of the services rendered. Accordingly,
the Company recorded the fair market value of the stock as
compensation expense. During the year ended March 31, 2012,
the Company issued 75,000 shares of common stock in
connection with this agreement. During the year
ended March 31, 2012, the Company recorded $133,000 of stock
compensation expense related to this agreement. The expense
was recorded as selling, general and administrative expense
in the accompanying condensed consolidated statements of
operations.
Common
Stock Purchase Warrants Issued to Service Providers
During
the year ended March 31, 2012, the Company issued 90,000
common stock purchase warrants with service conditions. The
recorded $42,000 of expense related to the warrants is
included as stock compensation expense in the accompanying
consolidated statements of operations. The warrants were
adjusted to the fair value using the Black Scholes pricing
model and the following weighted average assumptions: fair
value of the underlying stock of $1.36; risk-free interest
rate of 0.94% percent; contractual life of 4.61 years;
dividend yield of 0.00%; and vitality of 85.0%.
Common
Stock Issued to Settle Obligations
During
the year ended March 31, 2011, the Company issued shares of
common stock to a vendor to settle outstanding accounts
payable. The Company entered into a settlement agreement with
this vendor and issued a total of 35,000 shares with a fair
value equal to the outstanding payable, or $57,000.
Anti-dilution
Adjustments
Pursuant
to anti-dilution provisions contained in the August 13, 2007
private placement and in the placement agent warrant
agreement, for various financing transactions and common
stock issuances the Company is required to adjust the
exercise price and the number of warrants held by each
warrant holder under these agreements. Over-time,
the exercise price for the warrants has been adjusted from
the original exercise price of $9.50 to $4.12. At
March 31, 2012 and 2011, there were 762,876 and 725,866
warrants outstanding that contain this anti-dilution
provision, respectively. The warrants were
classified as derivative liabilities in the March 31, 2012
consolidated balance sheet (Note 10).
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