STOCK OPTIONS AND WARRANTS

12 Months Ended

Dec. 31, 2013

Temporary Equity Disclosure [Abstract]

STOCK OPTIONS AND WARRANTS

The following is a summary of option activity during the years ended December 31, 2013 and 2012.

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2011	9,980,000	$	0.05
Options granted and assumed	—		—
Options expired	580,000	$	0.04
Options canceled	—		—
Options exercised	—		—
Balance, December 31, 2012	9,400,000		$    0 .05
Options granted and assumed	300,000	$	0.03
Options expired	400,000	$	0.04
Options canceled	—		—
Options exercised	—		—
Balance, December 31, 2013	9,300,000	$	0.05

As of December 31, 2013, 9,300,000 stock options are exercisable.

On September 23, 2013, the Company granted stock options for 300,000 shares of its common stock with a strike price of $0.03. The stock options were exercisable upon grant and have a life of 5 years. The stock options were valued at $8,400 using the Black-Scholes option pricing model based upon the following assumptions: term of 5 years,  risk free interest rate of 1.33%, a dividend yield of 0% and volatility rates of 443%.   The Company recorded an expense of $8,400 for the year ended December 31, 2013.

Stock warrants -

The following is a summary of warrants activity during the years ended December 31, 2013 and 2012.

	Number of Shares		Weighted Average Exercise Price
Balance, December 31, 2011	5,762,451	$	0.10
Warrants granted and assumed	2,152,750	$	0.03
Warrants expired	1,150,001	$	0.10
Warrants canceled	—		—
Warrants exercised	—		—
Balance, December 31, 2012	6,765,200	$	0.06
Warrants granted and assumed	471,280		0.05
Warrants expired	3,417,700		0.06
Warrants canceled	—		—
Warrants exercised	—		—
Balance, December 31, 2013	3,818,780		0.05

All warrants outstanding as of December 31, 2013 are exercisable.

As part of a series of convertible notes with attached warrants 471,280 and 2,152,750 warrants were issued during the years ended 2013 and 2012, respectively. The warrants allow the holders to purchase one share for every two shares issued upon conversion of debt, at an exercise price ranging from $0.04 to $0.06 cents per share.

On July 2, 2012, the Company issued a warrant for 125,000 shares of common stock to a Consultant with an exercise price of $0.03. The vesting period on these grants was immediate. The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 3 years; risk free interest rate of 0.39%; dividend yield of 0% and expected volatility of 191%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $4,578.

On August 20, 2012, the Company issued a warrant for 100,000 shares of common stock to a Consultant with an exercise price of $0.03. The vesting period on these grants was immediate. The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 3 years; risk free interest rate of 0.41%; dividend yield of 0% and expected volatility of 191%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $3,660.

On September 4, 2012, the Company issued a warrant for 200,000 shares of common stock to Retire Happy, LLC for Consulting services. The warrants have an exercise price of $0.03 and the vesting period on these grants was immediate . The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 1 years; risk free interest rate of 0.16%; dividend yield of 0% and expected volatility of 168%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $5,235.

On November 20, 2012, the Company issued a warrant for 425,000 shares of common stock to Retire Happy, LLC for Consulting services. The warrants have an exercise price of $0.03 and the vesting period on these grants was immediate. The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 1 years; risk free interest rate of 0.16%; dividend yield of 0% and expected volatility of 166%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $10,718.

On December 10, 2012, the Company issued a warrant for 150,000 shares of common stock to Retire Happy, LLC for Consulting services. The warrants have an exercise price of $0.04 and the vesting period on these grants was immediate . The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 1 years; risk free interest rate of 0.17%; dividend yield of 0% and expected volatility of 172%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $3,668.

On December 20, 2012, the Company issued a warrant for 425,000 shares of common stock to Retire Happy, LLC for Consulting services. The warrants have an exercise price of $0.04 and the vesting period on these grants was immediate . The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 1 years; risk free interest rate of 0.15%; dividend yield of 0% and expected volatility of 174%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $11,147.

On February 11, 2013, the Company issued a warrant for 180,915 shares of common stock to the note holder with a exercise price of $0.05. The vesting period on these grant was immediate. The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 2 years; risk free interest rate of 0.27%; dividend yield of 0% and expected volatility of 178%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $1,683.

On February 11, 2013, the Company issued a warrant for 90,365 shares of common stock to a note holder with a exercise price of $0.05. The vesting period on these grant was immediate. The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 2 years; risk free interest rate of 0.27%; dividend yield of 0% and expected volatility of 178%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $840.

On May 22, 2013, the Company issued a warrant for 200,000 shares of common stock to Retire Happy, LLC for Consulting services. The warrants have an exercise price of $0.04 and the vesting period on these grants was immediate. The value of these warrants were estimated by using the Black-Scholes option pricing model with the following assumptions: expected life of 1 years; risk free interest rate of 0.11%; dividend yield of 0% and expected volatility of 167%. To account for such grants to non-employees, we recorded the issuance as consulting expense in the amount of $3,000.