COMMON STOCK

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 10. COMMON STOCK

Stock Subscription Receivable

During the year ended December 31, 2013, $64,000 was expensed as services rendered in consideration of payment for common stock.

Share-based Incentive Plans

During the years ended December 31, 2013 and 2012, the Company had three stock option plans that include both incentive and non-qualified options to be granted to certain eligible employees, non-employee directors, or consultants of the Company.

Active Plans:

2012 Plan

On October 15, 2012, the Company adopted the 2012 Non-Qualified Stock Option Plan (the "2012 Plan"). The purpose of the 2012 Plan, is to provide long-term incentives and rewards to those employees of the Company, and any other individuals, whether directors, consultants or advisors who are in a position to contribute to the long-term success and growth of the Company. The options granted have a 10 year contractual term and vest one hundred percent on the date of grant. There are 1,000,000 shares reserved for future issuance under this plan. Information with respect to stock options granted under this plan during the year ended December 31, 2013 is as follows:

	Number of shares		Weighted average exercise price per share
Options outstanding at December 31, 2011		—	$	—
Granted		7,000,000	$	0.043
Cancelled		—	$	—
Exercised		—	$	—
Options outstanding at December 31, 2012		7,000,000	$	0.043
Granted		2,000,000	$	0.092
Cancelled		—	$	—
Exercised		—	$	—
Options outstanding at December 31, 2013		9,000,000	$	0.054

2011 Plan

On February 1, 2011, the Company adopted the 2011 Non-Qualified Stock Option Plan (the "2011 Plan"), to replace the 2001 Plan discussed below, and has filed Registration Statements on Form S-8 to register 30,000,000 shares of its common stock. Under the 2011 Plan, employees and consultants may elect to receive their gross compensation in the form of options, exercisable at $0.001 per share, to acquire the number of shares of the Company's common stock equal to their gross compensation divided by the fair value of the stock on the date of grant. The options granted have a 10 year contractual term and have vesting periods that range from one hundred percent on the date of grant to one third immediately, one third vesting in 18 months and the final on third vesting in 36 months from the date of the grant. Information with respect to stock options granted under this plan during the year ended December 31, 2013 and 2012 is as follows:

	Number of shares		Weighted average exercise price per share
Options outstanding at December 31, 2011		3,000,000	$	0.145
Granted		16,614,369	$	0.001
Cancelled		-	$	-
Exercised		(16,614,369)	$	0.001
Options outstanding at December 31 2012		3,000,000	$	0.015
Granted		2,250,000	$	0.115
Cancelled		(3,000,000)	$	0.145
Exercised		-	$	-
Options outstanding at December 31, 2013		2,250,000	$	0.115

A summary of the awards under this plan during the year ended December 31, 2012 is as follows:

	Number of shares		Gross Compensation
	2012
Employee payroll		249,097	$	40,000
Consulting and professional fees		16,365,272		2,126,831
Total		16,614,369	$	2,166,831

At December 31, 2013 there are 750,000 shares reserved for issuance under this plan.

2002 Plan

The 2002 Stock Option Plan (“2002 Plan”) provides for the award of qualified and non-qualified options for up to 30,000,000 shares. The options granted have a ten-year contractual term and have a vesting schedule of either immediately, two years, or four years from the date of grant. Information with respect to stock options granted under this plan during the years ended December 31, 2013, and 2012 is as follows:

	Number of shares		Weighted average exercise price per share
Options outstanding at December 31, 2011		13,121,952	$	0.104
Granted		5,000,000	$	0.065
Cancelled or Expired		(7,560,976)	$	0.015
Exercised		(2,560,976)	$	0.041
Options outstanding at December 31, 2012		8,000,000	$	0.095
Granted		-	$	-
Cancelled or Expired		-	$	-
Exercised		-	$	-
Options outstanding at December 31, 2013		8,000,000	$	0.095

There are currently no shares reserved for issuance under this plan.

2001 Plan

The 2001 Non-Qualified Stock Option Plan (the "2001 Plan") expired on January 31, 2011. The Company adopted the 2001 Plan on February 1, 2001 and filed Registration Statements on Form S-8 to register 120,000,000 shares of its common stock. Under the 2001 Plan, employees and consultants could have elected to receive their gross compensation in the form of options, exercisable at $0.001 per share, to acquire the number of shares of the Company's common stock equal to their gross compensation divided by the fair value of the stock on the date of grant. Information with respect to stock options granted under this plan during the years ended December 31, 2013, and 2012 is as follows:

	Number of shares		Weighted average exercise price per share
Options outstanding at December 31, 2011		1,061,332	$	0.001
Granted		-	$	0.001
Cancelled		(68,750)	$	0.001
Exercised		(962,000)	$	0.001
Options outstanding at December 31, 2012		30,582	$	0.001
Cancelled		(30,582)	$	0.001
Exercised		-	$	-
Options outstanding at December 31, 2013		-	$	-

There are currently no shares reserved for issuance under this plan.

Fair value of issuances

The fair value of the Company's option grants under the 2012, 2011, and 2002 Plans was estimated at the date of grant using the Black-Scholes model with the following weighted average assumptions:

	2013	2012
Expected term (based upon historical experience)	5-6 years	<1 week
Expected volatility	127.95% – 132.84% 42	118.35	%
Expected dividends	None	None
Risk free interest rate	1.0% - 2.0%	0.10	%

For the year ended December 31, 2012 the fair value of options granted under all plans in 2012 was $532,291 which, assuming no forfeiture rate, resulted in $532,291 in additional compensation expense being charged to operations. The Company used the Black-Scholes option pricing model with the following weighted average assumptions:

Expected term (plain-vanilla)	6.67 years
Expected volatility	110.85	%
Expected dividends	None
Risk free interest rate	0.09	%

No options were exercised during the year ended December 31, 2013. The intrinsic value of options exercised during the year ended December 31, 2012 was $56,854 in exchange for $962 cash. Out of the total options exercised in 2012, 1,000,000 were exercised as additional compensation and 1,560,976 were exercised through a subscription receivable, both of which were exercised at the options grant price.

The weighted-average grant date fair value of options granted during the year ended December 31, 2013 was $0.10 per share.

For the year ended December 31, 2013, the Company recorded share-based compensation expense related to stock options of $367,591 and are included in operating expenses in the accompanying statement of comprehensive loss.

The Company had an aggregate of $134,000 of unrecognized share-based compensation expense for options outstanding as of December 31, 2013, which is expected to be recognized over a weighted average period of 2.58 years.

Information pertaining to options outstanding and exercisable at December 31, 2013 is as follows:

	Options Outstanding		Options Exercisable
Exercise Prices	Number of Shares	Weighted Average Remaining Contractual Life (In Years)	Number of Shares	Weighted Average Remaining Contractual Life (In Years)
0.041	5,000,000	8.79	5,000,000	8.79
0.048	2,000,000	8.94	2,000,000	8.94
0.065	5,000,000	8.61	5,000,000	8.61
0.092	3,500,000	9.39	2,716,250	9.39
0.145	3,000,000	7.87	3,000,000	7.87
0.160	750,000	9.97	261,875	9.97
	19,250,000	8.77	17,978,125	8.71

Summary of all stock option plans during the years ended December 31, 2013, and 2012 is as follows:

					Weighted Average
	Number of Shares		Weighted Average Price		Remaining Contractual Life (In Years)		Aggregate  Intrinsic Value
Options outstanding at December 31, 2011		17,183,284	$	0.105
Granted		28,614,369		0.022
Cancelled		(7,629,726)		0.109
Exercised		(20,137,345)		0.006
Options outstanding at December 31, 2012		18,030,582		0.083
Granted		4,250,000		0.104
Cancelled		(3,030,582)		0.144
Options outstanding and expected to vest at December 31, 2013		19,250,000	$	0.078	$	8.77	$	1,962,000
Options exercisable at December 31, 2013		17,978,125	$	0.075	$	8.71	$	1,883,000