Common Stock

12 Months Ended

Dec. 31, 2013

Note 9. Common Stock

Stock-Based Compensation

We periodically grant restricted equity or equity awards to our employees, directors and consultants. We are required to make estimates of the fair value of the related instruments when granted and recognize expense over the period benefited, usually the vesting period. During the year ended December 31, 2013, we issued 1,043,031 shares of our common stock for services. These shares were valued at share prices from $0.04 to $0.11 per share and have an aggregate fair value of $97,500.

Warrants

As described above in Note 7, we issued 23,711,052 warrants as additional consideration for the notes that we issued on December 31, 2012.

A summary of warrant activities for the years ended December 31, 2013 and 2012 is reflected below:

	Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life (Years)
Outstanding at December 31, 2011		7,834,896		$	1.40		3.17
Granted		23,711,052		$	0.02		−
Exercised		−			−		−
Forfeited		−			−		−
Outstanding at December 31, 2012		31,545,948		$	0.25		2.79
Granted		2,884,470		$	1.02		−
Exercised		(19,035,638	)		0.00		−
Forfeited/Cancelled		(10,719,366	)		1.02		−
Outstanding at December 31, 2013		4,675,414		$	0.01		2.00

The warrants outstanding at December 31, 2013 have an intrinsic value of $116,885. The weighted average grant date fair value for the warrants issued during the year ended December 31, 2013 was $1.00. The weighted average grant date fair value for the warrants issued during the year ended December 31, 2012 was $0.02.

Warrant Activity

In June 2013, Water Tech exercised 19,035,638 warrants on a cashless basis and received 18,790,174 restricted shares of our common stock as a result.

Preferred Stock

As described above in Note 7, we issued 1,200 shares of our Series A Convertible Preferred Stock convertible into 600,000 shares of our common stock as part of a sale of our securities for total proceeds of $120,000.

A summary of our preferred stock issuances for the years ended December 31, 2013 and 2012 is set forth below:

	Shares		Conversion Price
Outstanding at December 31, 2012		−		−
Granted		1,200	$	0.20
Converted		−		−
Forfeited as a result of Note prepayment		−		−
Outstanding at December 31, 2013		1,200	$	0.20