Note 5 - Shareholders' Equity

3 Months Ended

Sep. 30, 2011

Stockholders' Equity Note [Abstract]

Note 5: Shareholders' Equity

Common Stock:

In the second quarter of 2011, the Company finalized a Separation Agreement and Release with a former officer and director. Under the terms of the Separation Agreement and Release, the Company issued 550,000 shares of common stock valued at $0.10, 400,000 shares related to prior years back pay and salary repayment delays and 150,000 shares for services performed in 2011. Additionally, as part of the agreement, the Company issued 200,000 warrants with a strike price of $0.10 per share and an expiration date of June 20, 2014.

In the first quarter of 2011, the Company issued 100,000 common shares valued at $0.29 per share to an investor relations company for services and resulted in a stock based compensation expense of $29,000.

The Company recorded a stock based compensation expense of $100,913 in the nine months ended September 30, 2011.

During the third quarter, one of our note holders converted $8,000 of principal into common stock at $0.0312/share for 256,410 shares.

Stock Options and Warrants:

On June 20, 2011, the Company granted warrants to a director to purchase 200,000 shares with an exercise price of $0.10 per share. The stock price on the grant date was $0.12 per share. The warrants have a fair value of $23,913 on the grant date. Related derivative liabilities were marked-to-market on September 30, 2011 with a fair value of $21,027 resulting in a gain of $2,886.The warrants were valued using the Black-Scholes option pricing model with the following assumptions on the grant date and also on September 30, 2011: stock price on the measurement dates of $0.11-$0.12; warrant term of 2.72-3 years; expected volatility of 240%-268% and discount rate of 0.40%-.70%.

Stock option activity summary covering options is presented in the table below:


	Number of Shares			Weighted Average Exercise Price Per Share	Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at December 31, 2010	2,710,530		$	0.43	2.97 years	$	-
Granted	200,000		$	0.10	3.72 years		2,000
Exercised	-			-	-		-
Cancelled/expired	(2,710,530	)		0.36	-		-
Exercisable at September 30, 2011	200,000		$	0.10	3.72 years		2,000-

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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+ Details

BIOMEDICAL TECHNOLOGY SOLUTIONS HOLDINGS INC 10-Q/A