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8. STOCK BASED COMPENSATION

6 Months Ended

Jun. 30, 2014

During the periods ended June 30, 2014 and 2013 the Company issued stock in payment of services and debts as follows:

For the six month period ended June 30, 2014 the Board authorized the issuance of 15,700,000 shares of common stock in payment of services amounting to $309,500. In addition, 23,631,111 shares were issued during 2014 for stock shown as issuable as of December 31, 2013.

For the six month period ended June 30, 2013, the Board authorized the issuance of 2,833,333 shares of common stock in payment of services in the amount of $86,500. In addition 1,500,000 shares were issued in payment of loans in the amount of $7,500. Although authorized prior to June 30, 2013, these shares were not issued until after Jun3 30, 2013.

Independent contractors and consultants’ expense was based on the value of services rendered or the value of the common stock issued, if more reliably determined.

Stock Options and Warrants

On April 2, 2010, the Company adopted its 2010 Equity Incentive Plan, which authorized, among other forms of incentives, the issuance of stock options. Reserved for equity issuances under the 2010 Equity Incentive Plan are 50,000,000 shares of our common stock. No equity issuances have been made from the 2010 Equity Incentive Plan. Stock options, which may be tax qualified and non-qualified, are exercisable for a period of up to ten years at prices at or above market prices as established on the date of the grant.

Stock Options

Certain nonqualified stock options were issued during the period ended June 30, 2013 to a member of the board of directors as compensation for services performed. Stock option expense was $0 and $450,000 for the six month periods ended June 30, 2014 and 2013, respectively.

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value

Outstanding at January 1, 2014		10,000,000	$	0.03		4.14	$	—
Granted		—		—		—		—
Exercised		—		—		—		—
Forfeited		—		—		—		—
Outstanding at June 30, 2014		10,000,000	$	0.03		3.62	$	—

Exercisable at June 30, 2014		10,000,000	$	0.03		3.62	$	—