Equity Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Our common stock activity for the six months ended June 30, 2013 and 2012 is summarized below:


	Share Quantity 2013		Share Value ($)		Share Quantity 2012		Share Value ($)
Shares outstanding, January 1,		59,451,836				59,251,836
Shares issued as compensation for services		425,000	$	83,805
Shares issued in connection with Revolving Credit Facility		1,470,588	$	125,000
Shares issued as payment for interest and fees		969,078	$	96,908

Shares outstanding, June 30,		62,316,502				59,251,836

Schedule of Warrant Activity

A summary of our warrant activity for the three and six months ended June 30, 2013 and 2012 follows:


Warrants	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term
Outstanding at January 1, 2013		35,957,583		$	0.33	4.26 years
Granted		1,700,000		$	0.25
Forfeited or expired		(325,000	)	$	0.37

Outstanding at March 31, 2013		37,332,583		$	0.33	4.00 years

Granted		2,010,000		$	0.20
Cancelled		(2,000,000	)	$	0.20

Outstanding at June 30, 2013		37,342,583		$	0.33	3.75 years

Exercisable at June 30, 2013		37,308,583		$	0.33	3.75 years

Outstanding at January 1, 2012		41,057,583		$	0.35	4.86 years
Granted		25,000		$	0.25
Forfeited or expired		(100,000	)	$	0.53

Outstanding at March 31, 2012		40,982,583		$	0.35	4.61 years

Forfeited or expired		(2,300,000	)	$	0.32

Outstanding at June 30, 2012		38,682,583		$	0.35	4.58 years

Exercisable at June 30, 2012		37,615,583		$	0.33	4.62 years

Schedule of Option Activity

A summary of our option activity for the three and six months ended June 30, 2013 and 2012 follows:


Options	Shares			Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term
Outstanding at January 1, 2013		6,618,000		$	0.32	8.29 years
Forfeited or expired		(190,000	)	$	0.79

Outstanding at March 31, 2013		6,428,000		$	0.31	8.15 years

Granted		300,000		$	0.25
Forfeited or expired		(185,000	)	$	0.38

Outstanding at June 30, 2013		6,543,000		$	0.31	7.86 years


Exercisable at June 30, 2013		6,196,334		$	0.31	7.86 years
Outstanding at January 1, 2012		8,795,400		$	0.33	7.74 years
Forfeited or expired		(40,000	)	$	0.38

Outstanding at March 31, 2012		8,755,400		$	0.33	7.49 years

Forfeited or expired		(119,500	)	$	0.35

Outstanding at June 30, 2012		8,635,900		$	0.33	7.24 years

Exercisable at June 30, 2012		7,978,000		$	0.33	7.15 years

Black-Scholes Valuation Model for Options and Warrants

The following table lists the assumptions utilized in applying the Black-Scholes valuation model for options and warrants.


	Six months ended June 30,
	2013	2012

Expected volatility	160%		160	%
Expected life (in years) of options	3			*
Expected life (in years) of warrants	2-3		3
Risk-free interest rate range, options	0.66%			*
Risk-free interest rate range, warrants	0.23-0.74%		0.57	%
Expected dividend yield	0%		0	%

*	None were granted during the period.

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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