9. WARRANTS AND OPTIONS

9 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

WARRANTS AND OPTIONS

The following table summarizes options and warrants outstanding at September 30, 2013:

	Number of Options and Warrants		Weighted Average Exercise Price Per Share
Outstanding at December 31, 2012		1,915,000	$	0.08
Granted		1,346,154	$	0.17
Cancelled/forfeited		-		-
Expired		1,265,000	$	.05
Exercised		650,000	$	.30
Outstanding at Sept 30, 2013		1,346,154	$	0.17

In June 2013, the Company completed a unit offering of its common stock. Subscribers purchased units at $0.13 per unit with each unit consisting of one share of common stock and a warrant to purchase an additional share at prices ranging from $0.15 to $0.18 per share for three years. The Company raised $175,000 and issued 1,346,154 shares of common stock and 1,346,154 warrants to purchase common stock under this offering. None of the warrants have been exercised.

In September 2013, a warrant holder exercised 650,000 warrants with exercise prices ranging from $0.20 to $0.35 per share and received 184,350 common shares through a cashless exercise at the market price of $0.42 per share.

At various dates during the quarter ended September 30, 2013, the Company agreed to issue 7,600,000 warrants to purchase shares of its common stock at prices ranging from $0.13 to $1.20 per share for three years. In November 2013, the 7,600,000 warrants were rescinded effective as of the date of their original issuance.  None of the warrants had been exercised.