NOTE 7 - EQUITY

12 Months Ended

Dec. 31, 2011

Stockholders' Equity Note Disclosure [Text Block]

PREFERRED STOCK

The Company is authorized to issue up to 20,000,000 shares of preferred stock, $.01 par value per share in series to be designated by the Board of Directors.

COMMON STOCK

CONVERSION OF DEBT

During 2011, the Company entered into various agreements to convert $439,255 of principal and $36,019 of accrued interest into 3,995,995,423 shares of common stock.  The fair market value of the stock on the dates of agreement and issuance was $1,934,644.  The Company recorded a loss on settlement of debt of $1,459,321.

During 2010, the Company entered into various agreements to convert $474,549  of principal and $50,495 of accrued interest into 996,977,751 shares of common stock.  The fair market value of the stock on the dates of agreement and issuance was $1,289,370.  The Company recorded a loss on settlement of debt of $764,326.

STOCK ISSUED FOR SERVICES

During the year ended December 31, 2011, the Company issued an aggregate of 1,149,013,074 shares of its common stock to various employees of the Company as compensation.  The shares were valued at a total of $438,678.

During the year ended December 31, 2011, the Company entered into various agreements for strategic business planning, financial advisory, investor relations, and professional and public relations services.  As compensation for the services rendered, the Company issued 260,986,926 shares of common stock, valued at $137,912, the fair market value of the stock on the day of issuance.

During the year ended December 31, 2010, the Company issued an aggregate of 145,777,780 shares of its common stock to various employees of the Company as compensation.  The shares were valued at a total of $243,266.

During the year ended December 31, 2010, the Company entered into various agreements for strategic business planning, financial advisory, investor relations, professional and public relations services.  As compensation for the services rendered, the Company issued 90,222,220 shares of common stock, valued at $160,976, the fair market value of the stock on the day of issuance.

STOCK OPTION PLAN

On February 11, 2008, the Board of Directors adopted the 2008 Equity Incentive Plan (“the 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 reserved 3,000,000 shares of common stock for awards to be made under the 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 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 reserved 330,000,000 shares of common stock for awards to be made under the 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 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 reserved 2,500,000 shares of common stock for awards to be made under the 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 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 reserved 3,800,000 shares of common stock for awards to be made under the 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 “Plan.”)  The Plan provides for the granting of the nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs),  Restricted Stock, Performance Units, and Performance Shares, to their 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 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 “Plan”.)  The Plan provides for the granting of the nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs),  Restricted Stock, Performance Units, and Performance Shares, to their 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 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 “Plan”.)  The Plan provides for the granting of the nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs),  Restricted Stock, Performance Units, and Performance Shares, to their 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 Plan.  200,000,000 of the shares under this plan have been issued.

The company granted 44,000 restricted shares during the year ended December 31, 2010 vesting over a six month period.  The Company recognized marketing expenses over a straight-line basis over the vesting periods based on the market price of their stock at grant date.

The Company granted 100,800,000 restricted shares during the year ended December 31, 2009. Of the shares granted, 100,000,000 shares vested immediately and 800,000 shares vest over a six-month period.  The Company recognized marketing expense on a straight-line basis over the vesting periods based on the market price of their stock on the grant date.  The Company recognized $0 and $898,429 in marketing expense during the years ended December 31, 2010 and 2009 respectively, due to the restricted shares.

On May 6, 2011, the Board of Directors adopted the 2011 Equity Incentive Plan (The “Plan”.) The Plan provides for the granting of the nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights (or SARs), Restricted Stock, Performance Units, and Performance Shares, to their 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 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 1,200,000,000 shares of its common stock for awards to be made under the 2011-II Plan. 975,000,000 of the shares under this plan have been issued.

WARRANTS

There were no warrants granted during 2011 and 2010.

The following table summarizes the activity of options and warrants under all agreements and plans for the two years ended December 31, 2011 and 2010:

						Weighted
						Average		Aggregate
	Number of					Exercise		Intrinsic
	Options			Warrants		Price		Value
Outstanding, December 31,
2009		539,750			-		7
Granted		-			-		-
Exercised		-			-		-
Expired/cancelled		-			-		-
Outstanding, December 31,
2010		539,750			-		7
Granted		-			-		-
Exercised		-			-		-
Expired/cancelled		(505,750	)		-		-
Outstanding, December 31,
2011		34,000			-		2	-

Options:

The Company adopted ASC 718 (previously SFAS No. 123-R) effective July 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense recognized in the year ended December 31, 2011 includes compensation expense for all stock-based compensation awards vested during year ended December 31, 2011 based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123-R. As there were no options granted or vested since the implementation of ASC 718, no expense has been recorded during the year ended December 31, 2010.

Methods of estimating fair value:

Under ASC 718 (previously SFAS No. 123-R), the fair value of stock options is determined using the Black-Scholes model. The Company’s expected volatility assumption is based on the historical volatility of the Company’s stock. The expected life assumption is primarily based on historical exercise patterns and employee post-vesting termination behavior. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

The following table summarizes information about stock options and warrants outstanding at December 31, 2011:

OPTIONS AND WARRANTS
		OUTSTANDING						EXERCISABLE
				WEIGHTED
				AVERAGE		WEIGHTED				WEIGHTED
RANGE OF				REMAINING		AVERAGE				AVERAGE
EXERCISE		NUMBER		CONTRACTUAL		EXERCISE		NUMBER		EXERCISE
PRICES		OUTSTANDING		LIFE-YEARS		PRICE		EXERCISABLE		PRICE
$	66		34,000		1.63		66		34,000		66
			-						-
			34,000		1.63		66		34,000		66