Liabilities	12 Months Ended
Dec. 31, 2012
Liabilities [Abstract]
Liabilities	Note 5: Liabilities Convertible Debentures For the fiscal year ended December 31, 2012, the Company issued Convertible Debentures (“Debentures”) at a face amount of $3,353,685. At December 31, 2012, the unamortized discount of $520,851 consisted of a discount on the derivative liability of $270,537, discount on the warrant liability of $222,330 and original issue discount of $27,984. The discount will be amortized over the maturity of the Debentures. During the fiscal year ended December 31, 2012, approximately $290,000 in contractual interest expense was recognized on the Debentures, $1,315,773 in interest expense was recognized through amortization of the derivative liability discount and $1,239,426 in interest expense was recognized through amortization of the warrant liability discount. The Debentures have an original maturity of six months, accrue interest at rates ranging from 16-20% per year, carry an original issue discount of 5% and will convert into common stock at an initial conversion price ranging from $0.0573 to $0.099 per share at maturity. The Debentures were issued with detachable five-year cashless warrants (“Holders Warrants”) that allow the holders to purchase one share of stock for each two shares available under the converted Debentures at an exercise price ranging from $0.0745 to $0.1287 per share. In addition, the Company issued five-year cashless Agent Warrants equal to 10% of the total number of shares issuable under the Debentures and Holders Warrants at an exercise price ranging from $0.0745 to $0.1287 per share. At December 31, 2012, there were Debentures, Holders Warrants and Agent Warrants convertible or exercisable into 12,337,378, 25,577,158 and 7,586,807 shares of common stock, respectively. The conversion price of the Debentures is subject to an adjustment feature in the event that the Company issues securities for less than the conversion price of the Debentures. The Holders warrants contain a provision under which the Warrants, under certain circumstances, could be acquired for a presently undetermined consideration at a future date. This results in an adjustment feature component for the Holders and Agent Warrants. The accounting for the adjustment features of the conversion price and the warrant exercise price is described separately below under, “Warrant Liability” and “Derivative Liability”. Upon issuance of the Debentures the Company received net cash proceeds of $2,731,000 net of $574,762 in transaction costs and $167,685 of original issue discount. On December 31, 2012, if converted, the face value would exceed the market value of the converted common shares by $507,000. For the fiscal year ended December 31, 2012, Debentures with a face value of $2,224,211 and accrued interest of $222,421 were converted at a price of $0.0573 into 42,698,711 shares of common stock and approximately $2,554,000 in remaining associated liability was reclassified to equity, representing the carrying amount to equity at December 31, 2012. At December 30, 2012, Debentures with a face value of $126,316 were in default and accruing interest at a default rate of 20% per year. Warrant Liability The Company issued Convertible Debentures which included Holders Warrants (“Securities”). In addition, the Company issued Agent warrants to Laidlaw & Co. LTD as compensation related to the sale of the Securities. The Holders Warrants include a possible adjustment feature in the event of a future financing on terms more favorable than those of the existing Securities. Additionally, the Holders and Agent Warrants also contain a provision that provides for specific consideration in the event of certain all cash or private change of control transactions. This results in the Holders and Agent Warrants being classified as “Derivative Warrants”. Effective January 1, 2009, the accounting guidance regarding derivative warrants changed and required that these warrants be recorded as a liability and measured at fair value recorded in earnings. The Company records the fair value of these warrants in its statement of operations in the line “Change in fair value of derivative and warrant liabilities.” The Company measures these warrants using a combination of Black-Scholes option valuation models and Binomial Lattice option valuation models using similar assumptions to those described under “Stock-Based Compensation.” For the fiscal year ended December 31, 2012, the Company recorded non-cash expense related to these warrants of approximately $778,000. At December 31, 2012, there were exercisable warrants to purchase 33,163,965 shares of common stock. The time period over which the Company will be required to evaluate the fair value of these warrants is approximately five years. Upon issuance of the Debentures, the Company recorded a Warrant Liability of $2,507,868 and an initial fair value non-cash expense of $490,204. The initial fair value of the warrants is being amortized over the life of the associated Debentures (generally, six-months). For the fiscal year ended December 31, 2012, the Company recorded non-cash income of $777,824 which represents the change in the fair value of the Warrant Liability from inception to December 31, 2012, resulting in a Warrant Liability amount of $1,730,044. The Company computes the fair value of the warrant liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the warrant liability is the Company’s stock price, which is subject to significant fluctuation and is not under the Company’s control. The resulting effect on the Company’s net loss is therefore subject to significant fluctuation and will continue to be so until the Derivative Warrants expire (approximately five years from the date of issuance). Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases. The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment of the probability of a more favorably priced future financing or significant fluctuations in the volatility of the trading market for the Company’s common stock the Company’s fair value estimates could be materially different in the future. Derivative Liability During the fiscal year ended December 31, 2012, the Company issued convertible Debentures with a conversion price that includes a possible exercise adjustment feature in the event that it issues securities for consideration less than that offered with the convertible Debentures (referred to as “Derivative Liabilities”). The Company records the fair value of the conversion feature in its statement of operations in the line “Change in fair value of derivative liabilities.” The Company measures the conversion feature using a combination of Black-Scholes option valuation models and Binomial Lattice option valuation models incorporating similar assumptions to those described under “Stock-Based Compensation.” For the fiscal year ended December 31, 2012, the Company recorded non-cash expense related to this conversion feature of approximately $1,562,000. At December 31, 2012, there were convertible shares to purchase 12,337,378 shares of common stock subject to this price adjustment feature. The time period over which the Company will be required to evaluate the fair value of this conversion feature is the lesser of six months or conversion. Upon issuance of the Debentures, the Company recorded a derivative liability of $2,167,341 and an initial fair value non-cash expense of $581,696. For the fiscal year ended December 31, 2012, the Company recorded non-cash expense of $980,129 which represents the change in the fair value of the Derivative Liability from inception to December 31, 2012. Convertible Debentures with a face value of $2,224,211 converted into approximately 38,817,000 shares of Common Stock. These changes result in a Derivative Liability amount of $605,516 at December 31, 2012. The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s Debentures, which the convertible feature is associated with, mature. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases. The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment of the probability of a more favorably priced future financing or significant fluctuations in the volatility of the trading market for the Company’s common stock the Company’s fair value estimates could be materially different in the future.

Liabilities

12 Months Ended

Dec. 31, 2012

Note 5: Liabilities

Convertible Debentures

For the fiscal year ended December 31, 2012, the Company issued Convertible Debentures (“Debentures”) at a face amount of $3,353,685. At December 31, 2012, the unamortized discount of $520,851 consisted of a discount on the derivative liability of $270,537, discount on the warrant liability of $222,330 and original issue discount of $27,984. The discount will be amortized over the maturity of the Debentures. During the fiscal year ended December 31, 2012, approximately $290,000 in contractual interest expense was recognized on the Debentures, $1,315,773 in interest expense was recognized through amortization of the derivative liability discount and $1,239,426 in interest expense was recognized through amortization of the warrant liability discount. The Debentures have an original maturity of six months, accrue interest at rates ranging from 16-20% per year, carry an original issue discount of 5% and will convert into common stock at an initial conversion price ranging from $0.0573 to $0.099 per share at maturity. The Debentures were issued with detachable five-year cashless warrants (“Holders Warrants”) that allow the holders to purchase one share of stock for each two shares available under the converted Debentures at an exercise price ranging from $0.0745 to $0.1287 per share. In addition, the Company issued five-year cashless Agent Warrants equal to 10% of the total number of shares issuable under the Debentures and Holders Warrants at an exercise price ranging from $0.0745 to $0.1287 per share. At December 31, 2012, there were Debentures, Holders Warrants and Agent Warrants convertible or exercisable into 12,337,378, 25,577,158 and 7,586,807 shares of common stock, respectively. The conversion price of the Debentures is subject to an adjustment feature in the event that the Company issues securities for less than the conversion price of the Debentures. The Holders warrants contain a provision under which the Warrants, under certain circumstances, could be acquired for a presently undetermined consideration at a future date. This results in an adjustment feature component for the Holders and Agent Warrants. The accounting for the adjustment features of the conversion price and the warrant exercise price is described separately below under, “Warrant Liability” and “Derivative Liability”. Upon issuance of the Debentures the Company received net cash proceeds of $2,731,000 net of $574,762 in transaction costs and $167,685 of original issue discount. On December 31, 2012, if converted, the face value would exceed the market value of the converted common shares by $507,000. For the fiscal year ended December 31, 2012, Debentures with a face value of $2,224,211 and accrued interest of $222,421 were converted at a price of $0.0573 into 42,698,711 shares of common stock and approximately $2,554,000 in remaining associated liability was reclassified to equity, representing the carrying amount to equity at December 31, 2012. At December 30, 2012, Debentures with a face value of $126,316 were in default and accruing interest at a default rate of 20% per year.

Warrant Liability

The Company issued Convertible Debentures which included Holders Warrants (“Securities”). In addition, the Company issued Agent warrants to Laidlaw & Co. LTD as compensation related to the sale of the Securities. The Holders Warrants include a possible adjustment feature in the event of a future financing on terms more favorable than those of the existing Securities. Additionally, the Holders and Agent Warrants also contain a provision that provides for specific consideration in the event of certain all cash or private change of control transactions. This results in the Holders and Agent Warrants being classified as “Derivative Warrants”. Effective January 1, 2009, the accounting guidance regarding derivative warrants changed and required that these warrants be recorded as a liability and measured at fair value recorded in earnings. The Company records the fair value of these warrants in its statement of operations in the line “Change in fair value of derivative and warrant liabilities.” The Company measures these warrants using a combination of Black-Scholes option valuation models and Binomial Lattice option valuation models using similar assumptions to those described under “Stock-Based Compensation.” For the fiscal year ended December 31, 2012, the Company recorded non-cash expense related to these warrants of approximately $778,000. At December 31, 2012, there were exercisable warrants to purchase 33,163,965 shares of common stock. The time period over which the Company will be required to evaluate the fair value of these warrants is approximately five years. Upon issuance of the Debentures, the Company recorded a Warrant Liability of $2,507,868 and an initial fair value non-cash expense of $490,204. The initial fair value of the warrants is being amortized over the life of the associated Debentures (generally, six-months). For the fiscal year ended December 31, 2012, the Company recorded non-cash income of $777,824 which represents the change in the fair value of the Warrant Liability from inception to December 31, 2012, resulting in a Warrant Liability amount of $1,730,044.

The Company computes the fair value of the warrant liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the warrant liability is the Company’s stock price, which is subject to significant fluctuation and is not under the Company’s control. The resulting effect on the Company’s net loss is therefore subject to significant fluctuation and will continue to be so until the Derivative Warrants expire (approximately five years from the date of issuance). Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.

The assumptions used in determining fair value represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if factors change, including changes in the market value of the Company’s common stock, managements’ assessment of the probability of a more favorably priced future financing or significant fluctuations in the volatility of the trading market for the Company’s common stock the Company’s fair value estimates could be materially different in the future.

Derivative Liability

During the fiscal year ended December 31, 2012, the Company issued convertible Debentures with a conversion price that includes a possible exercise adjustment feature in the event that it issues securities for consideration less than that offered with the convertible Debentures (referred to as “Derivative Liabilities”). The Company records the fair value of the conversion feature in its statement of operations in the line “Change in fair value of derivative liabilities.” The Company measures the conversion feature using a combination of Black-Scholes option valuation models and Binomial Lattice option valuation models incorporating similar assumptions to those described under “Stock-Based Compensation.” For the fiscal year ended December 31, 2012, the Company recorded non-cash expense related to this conversion feature of approximately $1,562,000. At December 31, 2012, there were convertible shares to purchase 12,337,378 shares of common stock subject to this price adjustment feature. The time period over which the Company will be required to evaluate the fair value of this conversion feature is the lesser of six months or conversion. Upon issuance of the Debentures, the Company recorded a derivative liability of $2,167,341 and an initial fair value non-cash expense of $581,696. For the fiscal year ended December 31, 2012, the Company recorded non-cash expense of $980,129 which represents the change in the fair value of the Derivative Liability from inception to December 31, 2012. Convertible Debentures with a face value of $2,224,211 converted into approximately 38,817,000 shares of Common Stock. These changes result in a Derivative Liability amount of $605,516 at December 31, 2012.

The Company computes the fair value of the derivative liability at each reporting period and the change in the fair value is recorded as non-cash expense or non-cash income. The key component in the value of the derivative liability is the Company’s stock price, which is subject to significant fluctuation and is not under its control. The resulting effect on net loss is therefore subject to significant fluctuation and will continue to be so until the Company’s Debentures, which the convertible feature is associated with, mature. Assuming all other fair value inputs remain constant, the Company will record non-cash expense when its stock price increases and non-cash income when its stock price decreases.