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Note 5: Stockholders' Equity
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9 Months Ended |
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Sep. 30, 2011
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| Stockholders' Equity Note Disclosure [Text Block] |
Note
5: Stockholders’ Equity
As
part of the reincorporation, the total number of authorized
shares of common stock was changed to 250,000,000 shares of
$0.001 par value. The common stock and additional
paid in capital accounts were restated as of September 30,
2011 and December 31, 2010 to recognize the change from no
par common stock to a par value of $0.001 per
share. As of September 30, 2011, 60,448,815 shares
of common stock were outstanding.
The
Company has 10,000,000 shares of preferred stock authorized
with a par value of $0.001 subject to the approval of the
Board of Directors. As of September 30, 2011, no
shares were outstanding and the Board of Directors has not
authorized issuance of preferred shares.
On April 6, 2010,
the Company commenced a Confidential Private Placement
offering to certain accredited investors for up to 12,500,000
shares of common stock at a purchase price of $.40 per
share. On July 13, 2010, the Board of Directors
amended the offering to include the issuance of a warrant to
purchase one additional share of common stock for each share
of common stock sold through the offering. Each
warrant has a term of three years from the date of purchase
and an exercise price of $0.40 per share. As of
December 31, 2010, a total subscription of $188,443 had been
received and 471,108 shares had been issued. Costs
of the offering in the amount of $17,396 were offset against
the additional paid in capital account. This
offering expired.
During
March and April, 2011, the Company conducted a private
placement to certain accredited investors only under Rule
506. As a result of the offering, the Company
received subscriptions in the total amount of $860,000 and
4,300,000 shares have been issued. Ms. Isabel
Moeller also subscribed for 1,000,000 shares. In lieu of cash
payment for the subscribed shares, Ms. Moeller agreed to a
$200,000 reduction in the outstanding principal balance of
her note effective April 1, 2011. Costs of
the offering in the amount of $1,770 were offset against the
additional paid in capital account.
On
September 30, 2010, 50,000 shares were issued in exchange for
services valued at $25,000, or $.50 per share. On
March 31, 2011, an additional 32,300 shares were issued in
exchange for services valued at $9,690, or $0.30 per
share.
Through
September 30, 2011, stock option grant notices for up to
14,045,000 shares of common stock have been issued to
employees and service providers of the Company pursuant to
the 2008 Stock Option Plan, in accordance with the provisions
of Topic 718, Compensation, of the Accounting Standards
Codification, which requires companies to measure the cost of
employee services received in exchange for equity instruments
based on the grant date fair value of those awards and to
recognize the compensation expense over the requisite service
period during which the awards are expected to
vest. A total of $1,832,179 has been recognized as
Additional Paid in Capital as the value of these options
granted, which includes $385,137 and $117,610 for the nine
months ended September 30, 2011 and the year ended December
31, 2010, respectively. Of the total grants
for shares issued, 40,000 have expired as of September 30,
2011 and options to purchase up to 14,005,000 shares of
common stock are outstanding. Additional details regarding
the stock options granted is found in Note
8: Stock Options.
On
June 2, 2009, the Company, through Glendale Securities, Inc.
of Sherman Oaks, California as broker-dealer, filed a
Disclosure Statement with the Financial Investment Regulatory
Agency (FINRA) pursuant to Rule 15c2-11 of the Securities and
Exchange Act of 1934, as amended, to establish a secondary
trading market on the Pink Sheets Electronic OTC Markets
system. Glendale Securities’ request for
un-priced quotation on the Pink OTC Markets was cleared by
FINRA on July 13, 2009 and trading began on July 24,
2009. In May 2011, the OTC Markets, Inc. moved the
Company to the OTCQB trading platform. On
September 7, 2011, FINRA cleared the Company for trading on
the OTCBB. The trading symbol is PENT.
In
connection with the change in domicile and name change from
Pacific Entertainment Corporation to Genius Brands
International, Inc., the Company filed an application for a
new ticker symbol for trading purposes. As of
November 14, 2011, FINRA is conducting a review of the
application.
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