NOTE 6 - EQUITY TRANSACTIONS

12 Months Ended

Dec. 31, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 6 - EQUITY TRANSACTIONS

Unless otherwise stated, the following equity transactions were with unrelated parties and the securities issued were restricted.  There were no underwriters involved.

Stock Purchase Agreement

On November 17, 2010, the Company entered into a Common Stock Purchase Agreement (the “Stock Purchase Agreement”), with Mammoth Corporation (“Mammoth”) which provided for a financing arrangement that was sometimes referred to as a committed equity line financing facility (or “Equity Line”). The Stock Purchase Agreement provided that, upon the terms and subject to the conditions in the Stock Purchase Agreement, Mammoth was committed to purchase up to $10,000,000 of shares of common stock over the 24-month term of the Stock Purchase Agreement.  Furthermore, in no event could Mammoth purchase any shares of the Company’s common stock which, when aggregated with all other shares of common stock then beneficially owned by Mammoth, would result in the beneficial ownership by Mammoth of more than 4.9% of the then outstanding shares of the Company’s common stock. These maximum share and beneficial ownership limitations could not be waived by the parties.

Under the terms of the Stock Purchase Agreement, the Company had the opportunity for a 24-month period, commencing on the date on which the SEC first declared effective the registration statement, to require Mammoth to purchase up to $10,000,000 in shares of common stock. For each share of common stock purchased under the Stock Purchase Agreement, Mammoth would pay to the Company a purchase price equal to 75% of the lowest closing bid price during the five-consecutive trading day period (the “Draw Down Pricing Period”) which preceded the date a draw down notice (the “Draw Down Notice”) was delivered to Mammoth (the “Draw Down Date”) in a manner provided by the Stock Purchase Agreement.  Subject to the limitations outlined below, the Company would, at its sole discretion, issue a Draw Down Notice to Mammoth, and Mammoth would then be irrevocably bound to purchase such shares.

Each Draw Down Notice would specify the lowest purchase price during the Draw Down Pricing Period at which the Company would sell the shares to Mammoth, which could not be less than 75% of the lowest closing bid price during the Draw Down Pricing Period. Furthermore, the number of shares to be issued was limited by multiplying by five the average daily trading volume for the 30 trading days immediately preceding the delivery of the Draw Down Notice. The Draw Down Notice also included the aggregate dollar amount of the Draw Down, which could not be less than $25,000 and not more than $500,000 in any Draw Down Notice.  A minimum of 15 trading days between each Draw Down Notice was required.  Regardless of the maximum amount indicated in the Draw Down Notice, Mammoth was not obligated to purchase shares under any Draw Down Notice in an amount which, when added to the number of shares of common stock then beneficially owned by Mammoth, would result in Mammoth owning more than 4.9% of the outstanding shares of the Company’s common stock.

Further, if the Company issued a Draw Down Notice and failed to deliver the shares to Mammoth on the applicable settlement date, and such failure continued for 10 trading days, the Company agreed to pay Mammoth, in addition to all other remedies available to Mammoth under the Stock Purchase Agreement, an amount in cash equal to $100 for each $5,000 of the Draw Down Amount for the first 10 days such delivery was late, and $350 for each $5,000 of the Draw Down Amount for each trading day beyond 10 trading days that such delivery was late.

In connection with the Stock Purchase Agreement, the Company granted registration rights to Mammoth, and agreed to register the resale of shares issued to Mammoth in connection with Draw Downs made in connection with the Stock Purchase Agreement.  In January 2011, the Company filed a registration statement to cover the resale by Mammoth of up to 66,666,667 shares of common stock under the Stock Purchase Agreement.  The Company was not permitted to make Draw Downs under the Stock Purchase Agreement at any time there was not an effective registration statement registering the resale of shares of common stock by Mammoth.  On January 25, 2011, the registration statement became effective by order of the SEC.  The Company made two Draw Down requests under the Stock Purchase Agreement in 2012. The Stock Purchase Agreement terminated automatically by its terms on January 25, 2013, the 24-month anniversary of the effective date of the registration statement.

Common Stock for Cash – 2012

During January and February 2012, the Company sold an aggregate of 6,653,000 restricted shares of common stock to approximately 30 accredited investors for cash proceeds of $665,300, or $0.10 per share.

During January 2012, the Company issued 903,089 shares of common stock to Mammoth (as part of the Equity Line) for cash proceeds of $149,010, or $0.165 per share.

During June 2012, the Company issued 500,000 shares of common stock to Mammoth (as part of the Equity Line) for cash proceeds of $65,625, or $0.131 per share.

During June 2012, the Company sold an aggregate of 1,205,556 restricted shares of common stock to two accredited investors for cash proceeds of $108,500, or $.09 per share.

During July 2012, the Company sold an aggregate of 250,000 restricted shares of common stock to an accredited investor for cash proceeds of $22,500, or $0.09 per share.

During August 2012, the Company sold an aggregate of 2,500,000 restricted shares of common stock to three accredited investors for cash proceeds of $125,000, or $0.05 per share.

During September 2012, the Company sold an aggregate of 2,483,333 restricted shares of common stock to seven accredited investors for cash proceeds of $149,000, or $0.06 per share.

During October, November and December 2012, the Company sold an aggregate of 2,234,300 restricted shares of common stock to six accredited investors for cash proceeds of $135,858, or amounts ranging from of $0.06 to $0.078 per share.

Common Stock for Cash – 2013

During January, February, and March 2013, the Company sold an aggregate of 12,233,332 restricted shares of common stock to 12 accredited investors for cash proceeds totaling $367,000, or $0.03 per share.

During April and May 2013, the Company sold 3,794,444 restricted shares of common stock to six accredited investors for cash proceeds totaling $170,750, or $0.045 per share.

During May and June 2013, the Company sold 5,863,636 restricted shares of common stock to 12 accredited investors for cash proceeds totaling $322,500, or $0.055 per share.

During August and September 2013, the Company sold 5,000,000 restricted shares of common stock to eight accredited investors for cash proceeds totaling $300,000, or $0.06 per share.

During October 2013, the Company sold 1,950,000 restricted shares of common stock to five accredited investors for cash proceeds totaling $97,500, or $0.05 per share.

During December 2013, the Company sold 4,442,857 restricted shares of common stock to six accredited investors for cash proceeds totaling $155,500, or $0.035 per share.

Recapitalization

The Company’s amended Articles of Incorporation (“AOI”) include a class of preferred stock, par value $0.00001, with authorized shares of 50,000,000.  To date, no shares of preferred stock have been issued.  The rights and preferences of the authorized preferred shares will be determined by the Company’s Board of Directors.  

The amended AOI authorize 395,000,000 shares of common stock, par value $0.001.