NOTE 5. EQUITY TRANSACTIONS

9 Months Ended

Sep. 30, 2011

Stockholders' Equity Note Disclosure [Text Block]

NOTE 5.  EQUITY TRANSACTIONS

Issuance of Common Stock

During the nine month period ended September 30, 2011, the Company issued an aggregate of 351,250,000 shares of common stock to employees for current and past services rendered to the Company.  The fair market value of the shares issued to employees was determined to be $179,125, of which $50,389 was accrued as of December 31, 2010.  In addition, a total of 500,000,000 shares of common stock were issued to the Company’s president and CEO for past services.  The fair market value of the shares issued to the Company’s president and CEO was determined to be $200,000, the totality of which was accrued as of December 31, 2010.  

The Company issued 240,986,926 shares of common stock for current and past consulting and other professional service fees for an aggregate amount of $133,912 during the nine month period ended September 30, 2011, of which $60,516 was accrued as of December 31, 2010.  

During the nine month period ended September 30, 2011, the Company entered into various agreements to convert $442,073 of debt and accrued interest into 3,283,465,323 shares of common stock.  The fair market value of the stock on the dates of agreement was $1,771,535.  Accordingly, the Company recorded a related loss on settlement of debt of $1,329,461.  As of September 30, 2011, the Company had issued 3,180,865,323 of the shares relating to the agreements, while the balance of 102,600,000 shares were reported on the balance sheet as shares to be issued.  The fair market value of the issued shares was $1,740,755, and the fair market value of the pending shares on the date of the agreement was $30,780.

Stock Options

On February 11, 2008, the Board of Directors adopted the 2008 Equity Incentive Plan (the “2008 Plan”). The 2008 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital-raising transaction. The Company reserved 300,000,000 shares of common stock for awards to be made under the 2008 Plan. 299,991,072 shares reserved under this plan have been issued.

On April 29, 2008, the Board of Directors adopted the 2008-2 Equity Incentive Plan (the “2008-2 Plan”). The 2008-2 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital-raising transaction. The Company reserved 330,000,000 shares of common stock for awards to be made under the 2008-2 Plan. 326,854,165 of the shares reserved under this plan have been issued.

On July 1, 2008, the Board of Directors adopted the 2008-3 Equity Incentive Plan (the “2008-3 Plan”). The 2008-3 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital-raising transaction. The Company reserved 2,500,000 shares of common stock for awards to be made under the 2008-3 Plan. 2,500,000 of the shares reserved under this plan have been issued.

On September 2, 2008, the Board of Directors adopted the 2008-4 Equity Incentive Plan (the “2008-4 Plan”). The 2008-4 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital-raising transaction. The Company reserved 3,800,000 shares of common stock for awards to be made under the 2008-4 Plan. 3,800,000 of the shares reserved under this plan have been issued.

On February 15, 2009, the Board of Directors adopted the 2009 Equity Incentive Plan (the “2009 Plan”). The 2009 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are no it connection with the offer and sale of securities in a capital raising transactions. The company initially reserved 10,000,000 shares of its common stock for awards to be made under the 2009 Plan. 10,000,000 of the shares reserved under this plan have been issued.

On May 15, 2009, the Board of Directors adopted the 2009-2 Equity Incentive Plan (the “2009-2 Plan”). The 2009-2 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital raising transaction. The Company initially reserved 60,000,000 shares of its common stock for awards to be made under the 2009-2 Plan. 59,605,412 of the shares under this plan have been issued.

On November 6, 2009, the Board of Directors adopted the 2009-3 Equity Incentive Plan (the “2009-3 Plan”). The 2009-3 Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital raising transaction. The Company initially reserved 200,000,000 shares of its common stock for awards to be made under the 2009-3 Plan. 200,000,000 of the shares under this plan have been issued.

On May 6, 2011, the Board of Directors adopted the 2011 Equity Incentive Plan (the “2011 Plan”). The Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital raising transaction. The Company initially reserved 600,000,000 shares of its common stock for awards to be made under the 2011 Plan. 600,000,000 of the shares under this plan have been issued.

On October 27, 2011, the Board of Directors adopted the 2011 Equity Incentive Plan II (the “2011-II Plan”). The 2011-II Plan provides for the granting of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to our employees, officers, directors, consultants, independent contractors, advisors, or other service providers, provided that such services are not in connection with the offer and sale of securities in a capital raising transaction. The Company initially reserved 600,000,000 shares of its common stock for awards to be made under the 2011-II Plan. 600,000,000 of the shares under this plan have been issued.

Common stock purchase options consisted of the following as of September 30, 2011:

	# shares			Weighted Average Exercise Price		Aggregated Intrinsic Value
Options:
Outstanding and exercisable, December 31, 2010		539,750		$	2 to $66	$	-
Granted		-					-
Exercised		-					-
Expired		(500,000	)	$	2		-
Outstanding and exercisable, September 30, 2011		39,750		$	60 to $66	$	-