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NOTE 6 COMMON STOCK OPTIONS
 9 Months Ended
Sep. 30, 2013
Disclosure Text Block Supplement [Abstract]  
Shareholders' Equity and Share-based Payments [Text Block]
NOTE 6     COMMON STOCK OPTIONS

On August 26, 2009, the Company granted options for the purchase of 1,500,000 shares of common stock to an outside consultant for services rendered, with an exercise price of $0.10 per share, exercisable for up to five years, but including vesting provisions as follows: (i) options for 500,000 shares vested immediately on the date of grant, (ii) options for 500,000 shares vested in September 2012, the date certified by the Company as the date its hospital disinfection program completed its beta-testing, and (iii) the remaining options for 500,000 shares will vest on the date certified by the Company as the date that its disinfection process has been commercialized and a minimum of 50 units or devices have been sold to third parties.  During the three months ended September 30, 2012, options for 500,000 shares valued at $48,699 vested, and were recorded as part of general and administrative expenses. As of September 30, 2013, options for 500,000 shares had not yet vested.

In July 2010, the Company granted options for the purchase of 3,500,000 shares of common stock (of which 250,000 were cancelled in 2011) to certain board members and employees of the Company for services rendered.  These options are exercisable for five years from the date of grant at $0.20 per share, and the remaining options vested when the Company achieved commercial sales during the third quarter of 2012, resulting in $659,822 being recorded as part of general and administrative expense. 

In September 2010, the Company granted options for the purchase of 250,000 shares of common stock to a consultant in connection with extending his consulting agreement with the Company through September 2011.  These options are exercisable at $0.275 per share for five years from the date of grant and vested when the Company achieved commercial sales during the third quarter of 2012, resulting in $65,067 being recorded as part of general and administrative expense.  

In February 2012, the Board of Directors approved the 2012 Equity Incentive Award Plan and authorized up to 10,000,000 shares of common stock to be available for awards under the Plan.  On February 21, 2012, each of four directors of the Company was awarded stock options for the purchase of 1,000,000 shares of common stock, exercisable at a price of $0.23 per share, which was the fair value of the common stock based on the price of the Company’s common stock reported on the OTC Bulletin Board on the date of grant.  In addition, certain officers, consultants and employees of the Company were awarded options for the purchase of an aggregate 1,050,000 shares of common stock at an exercise price of $0.23 per share.  The value of these options granted, totaling $1,057,600, was recognized as expense during the nine months ended September 30, 2012 as each of the options granted was fully vested on the date of grant.

In May 2012, the Company granted options for the purchase of 1,000,000 shares of common stock to an individual for services.  Options for 550,000 shares have vested and the remaining options will vest on the date certified by the Company as the date that the other milestones are achieved.  The options have an exercise price of $0.15 per share, and are exercisable for up to five years.  The value of these options granted was $153,997 in connection with which the Company recognized $69,300 during the nine months ended September 30, 2013.  As of September 30, 2013, options for the purchase of 550,000 shares have vested.

In May 2012, the Company granted options for the purchase of 1,000,000 shares of common stock to an individual for medical consulting support services already performed and to be performed in the future.  The options have an exercise price of $0.17 per share, and are exercisable for up to five years.  The value of the options vested upon grant was $149,460, of which the Company recognized $49,322 and $100,138 during the nine months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, all of the milestones were achieved and all of the shares vested.

In August 2012, the Company granted options for the purchase of 2,500,000 shares of common stock to three individuals in connection with the purchase of restricted stock, exercisable at a price of $0.05 per share.  No expense was recorded for these options as the value associated with these options was recorded as part of the stock transactions.  These options held a six-month term and have expired without being exercised.  

In August 2013, the Company granted options for the purchase of 250,000 shares of common stock to a consultant.  These options are exercisable at $0.10 per share for five years from the date of grant with 50,000 shares vesting immediately and the other 200,000 upon the achievement of certain milestones.  The value of these options granted was $22,075 of which the Company recognized $4,415 which was recorded as part of general and administrative expense during the three months ended September 30, 2013.  

In August 2013, the Company granted options for the purchase of 100,000 shares of common stock to an employee for services already performed.  The options have an exercise price of $0.10 per share, and are exercisable for up to five years.  The value of the options vested upon grant was $8,830 which the Company recorded as part of general and administrative expense during the three months ended September 30, 2013.

The Company estimated the fair value of the stock options described in the above paragraphs at the date of the grant, based on the following weighted average assumptions:

Risk-free interest rate     .75 %
to
1.66
%
Expected life           5 years  
Expected volatility
   
138.3
%
to
148.9
%
Dividend yield
         
0.00
%

A summary of the status of the Company’s outstanding options as of September 30, 2013, and for the nine months then ended, is presented below:

   
Shares
   
Weighted Average
Exercise Price
 
Outstanding, beginning of the period
   
17,300,000
   
$
0.17
 
Granted
   
350,000
   
 
0.10
 
Expired/Canceled
   
(2,500,000
)   
 
0.05
 
Exercised
   
-
     
-
 
Outstanding, end of the period
   
15,150,000
     
 0.19
 
Exercisable
   
14,000,000
   
$ 
0.19
 

The Company estimates the fair value of each stock award by using the Black-Scholes option-pricing model, which model requires the use of exercise behavior data and the use of a number of assumptions including volatility of the Company’s stock price, the weighted average risk-free interest rate, and the weighted average expected life of the options. Because the Company does not pay dividends, the dividend rate variable in the Black-Scholes option-pricing model is zero. Expense of $131,866 and $1,931,325 related to stock options was recorded for the nine months ended September 30, 2013 and 2012, respectively.  As of September 30, 2013, the Company had various unvested outstanding options with related unrecognized expense of $135,657.  The Company will recognize this expense as these options vest over their remaining lives, which range from 11 to 59 months.