6. COMMON STOCK

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

COMMON STOCK

At December 31, 2014, 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 36,669,106 shares of common stock, and no shares of preferred stock.

2014 Transactions: During the year ended December 31, 2014, the Company issued shares of common stock as follows:

· 100,000 shares of common stock for an employee contract bonus valued at $0.15 per share.

· 75,000 shares of common stock for an employee contract bonus valued at $0.26 per share, including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity.

· 2,442,000 shares of common stock were acquired through a debt settlement and retired, see Note 4 for additional discussions.

At December 31, 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 year ended December 31, 2013, the Company issued shares of common stock in the following transactions:

· 25,000 shares of common stock for an employee signing bonus valued at .26 per share

· 500 shares were cancelled by request of an individual investor, value less than $1.00

Warrants:

No warrants were issued during the year ended December 31, 2013.

As of December 31, 2014, warrants outstanding consisted of the following:

Date of Issuance or Declaration	Number of Warrants		Exercise Price		Contractual Life	Number of Shares Exercisable
May 31, 2012		1,834,525		0.50	3 years		1,834,525
May 31, 2012		1,500,975		0.50	3 years		1,500,975
July 30, 2012		75,000		0.50	3 years		75,000
October 30, 2012		50,000		0.50	3 years		50,000
September 10, 2014		150,000		0.25	3 years		150,000
September 10, 2014		150,000		0.50	3 years		150,000
September 18, 2014		200,000		0.25	3 years		200,000
November 05, 2014		100,000		0.50	3 years		100,000
		4,060,500					4,060,500

Stock and Warrant Grants:

In August 2014 the Company granted 150,000 shares of common stock to a consultant with a total value of $25,500 or $0.17 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 150,000 shares granted have a vesting period of three years of which five months have vested as of December 31, 2014. The approximate value vested for the year ended December 31, 2014 was $3,500, for which a payable has been recorded for the same vested amount as of December 31, 2014. As of December 31, 2014, none of the 150,000 shares granted have been issued.

In September 2014 the Company granted 150,000 shares of common stock along with 150,000 Class A warrants and 150,000 Class B warrants to an advisory board member. The shares were valued at $19,250 or $0.13 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity. The warrants were valued at $42,761, using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $0.15 per share; exercise price of $0.25 for the class A warrants and$0.50 for the class B warrants, 3 year life; discount rate of 2.00 %; and volatility rate of 245%. The 150,000 shares and 300,000 warrants granted will vest over a 3 year period, at 50,000 shares and 100,000 warrants per year of which four months have vested as of December 31, 2014. The approximate value vested for the year ended December 31, 2014 was $6,400, for which a payable has been recorded for the same vested amount as of December 31, 2014. As of December 31, 2014, none of the 150,000 shares or 300,000 warrants granted have been issued.

In September 2014 the Company granted 200,000 shares of common stock along with 200,000 warrants to a consultant. The shares were valued at $30,600 or $0.16 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The warrants were valued at $34,611, using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $0.18 per share; exercise price of $0.25, 3 year life; discount rate of 2.00 %; and volatility rate of 245%. The 150,000 shares and 200,000 warrants granted have a vesting period of six months of which four months have vested as of December 31, 2014. The approximate value vested for the year ended December 31, 2014 was $37,000, for which a payable has been recorded for the same vested amount as of December 31, 2014. As of December 31, 2014, none of the 200,000 shares or 200,000 warrants granted have been issued.

In October 2014 the Company granted 150,000 shares of common stock to an advisory board member with a total value of $32,400 or $0.21 per share (including a 10% discount of fair market value due to these shares being restricted and lacking market liquidity). The 150,000 shares granted will vest over a 3 year period, at 50,000 shares per year of which three months have vested as of December 31, 2014. The approximate value vested for the year ended December 31, 2014 was $2,200, for which a payable has been recorded for the same vested amount as of December 31, 2014. As of December 31, 2014, none of the 150,000 shares granted have been issued.

In October 2013, the Company granted 300,000 shares of common stock to an employee of the Company with a total value of $38,250 or $0.15 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 300,000 shares granted have a vesting period of three years of which fourteen months have vested as of December 31, 2014. The approximate value vested for the years ended December 31, 2014 and 2013 were $9500 and $2,600, for which a payable has been recorded for the same vested amounts as of December 31, 2014. As of December 31, 2014, none of the 300,000 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 twenty nine months have vested as of December 31, 2014. The approximate value vested for the years ended December 31, 2014, 2013 and 2012 were $492,000, $136,000 and $52,000 respectively, for a total of $680,000 for which a payable has been recorded for the same vested amount as of December 31, 2014. As of December 31, 2014, none of the 5,000,000 shares granted have been issued.