4. COMMON STOCK

6 Months Ended

Jun. 30, 2013

Equity [Abstract]

COMMON STOCK

At June 30, 2013, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had outstanding 38,936,106 shares of common stock, and no shares of preferred stock.

2013 Transactions: During the six months ended June 30, 2013, the Company issued shares of common stock in the following transactions:

· On February 1, 2013, the Company issued 25,000 shares of common stock for an employee signing bonus valued at $0.26 per share.

· On April 14, 2013, 500 shares were cancelled by request of an individual investor, valued less than $1.00.

2012 Transactions: During six months ended June 30, 2012, the Company issued shares of common stock in the following transactions:

— 3,335,500 shares of common stock and warrants for 3,335,500 shares of common stock for extinguishment of debts totaling $1,667,750 . The shares were valued at the market price of our common stock on the date of issuance and warrants valued using the Black-Scholes options pricing model whereby both shares and warrants collectively were valued at $531,695.

Warrants

As of June 30, 2013, the Company had outstanding the following warrants:

Date of Issuance		Number of Warrants		Exercise Price		Contractual Life		Number of  Shares Exercisable
	05/31/2012		1,834,525	$	0.50		3 years		1,834,525
	05/31/2012		1,500,975	$	0.50		3 years		1,500,975
	07/30/2012		75,000	$	0.50		3 years		75,000
	10/30/2012		50,000	$	0.50		3 years		50,000
			3,460,500						3,460,500

Stock Grants:

In February 2013, the Company granted 75,000 shares of common stock to an employee of the Company with a total value of $16,575 or $0.22 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 75,000 shares granted have a vesting period of one year of which five months have vested with an approximate value of $6,811 during the period ended June 30, 2013 for which a payable has been recorded for the same amount as of June 30, 2013. As of June 30, 2013, none of the 75,000 shares granted have been issued.

In August 2012, the Company granted a total of 5,000,000 shares of common stock to various officers and directors of the Company with a total value of $680,000 or $0.14 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 5,000,000 shares granted have a vesting period of five years of which ten months have vested as of June 30, 2013. The approximate value vested during the year ended December 31, 2012 and for the six month period ended June 30, 2013 was $52,000 and $67,400, respectively. As of December 31, 2012 and June 30, 2013, the Company has a recorded a payable in the amount of $52,000 and $119,400, respectively, which represents the value of the common stock that had vested as of such dates. As of June 30, 2013, none of the 5,000,000 shares granted have been issued.