EQUITY BASED INCENTIVE/RETENTION/YEAR-END BONUSES AND CONVERSION OF BOARD OF DIRECTORS' LIABILITY

12 Months Ended

Dec. 31, 2012

Equity Based Year End Bonuses and Conversion Of Board Of Directors Liability [Abstract]

Equity Based Year End Bonuses and Conversion Of Board Of Directors Liability [Text Block]

20. EQUITY BASED INCENTIVE/RETENTION/YEAR-END BONUSES AND CONVERSION OF BOARD OF DIRECTORS’ LIABILITY

On February 23, 2013, the Board of Directors authorized an aggregate of $345,000 in bonuses for payment in stock to consultants and service providers for the year ended December 31, 2012, for service in 2012. The combined amount of stock issuable under this transaction was 1,150,000 shares. Of this amount the Board of Director was awarded 243,333,333 shares, or $73,000. The shares were valued at the previous closing market price of the stock prior to the date of the transaction, or $.0003 per share. In addition, on February 23, 2013 the Board of Directors authorized an aggregate of $129,500 in bonuses to employees for payment in either cash or stock to be determined at a later date by the Board of Directors for the year ended December 31, 2012, for service in 2012. Of the $129,500, $67,000 was awarded to the Chief Executive Officer. Since these transactions were for 2012 services, the Company applied retroactive statement to the consolidated financial statement as of and for the year ended December 31, 2012.

On November 2, 2012, the Board of Directors consented to expand the Board of Directors’ (BOD) compensation plan to include any employee, non-executive members. In addition, they consented to grant equity based bonuses to certain key employees and consultants as an incentive to retain their services. Stock incentive bonuses will vest, and be paid out on May 2, 2013, contingent upon continued employment or service. The stock bonus price per share was calculated as $.0009 based on last closing price per the OCBB for a total of $75,100. The number of shares that will be set aside and reserved for this transaction is 80,500,000. Of the 80,500,000 shares, 50,000,000 shares were awarded to the Chief Executive Officer, or $45,000 of the $75,100, as disclosed in Note 6. RELATED

PARTY TRANSACTIONS. The Company will accrue operating expense ratably from the time of the awards through May 2, 2013, when vested. In addition, the BOD agreed to convert the BOD fee due Mr. Mikkel Pitzner of $22,500 for the nine months ended September 30, 2012, to stock issuable immediately at the $.0009 per share market price, or 25,000,000 shares.

On March 6, 2012, the Board of Directors authorized an aggregate of $215,000 in bonuses for payment in stock to employees, consultants, and Board of Directors for the year ended December 31, 2011, for service in 2011. Of this amount the Chief Executive Officer and the non-employee Board of Directors were awarded, $36,000 and $53,000, respectively. In addition, an incremental $45,000 due the non-employee Board of Directors for service on the Board from April to December 2011, was converted to stock payable in lieu of cash settlement. The combined amount of stock issuable under these transactions is 9,629,630 and is based on the closing price of the Company’s stock on March 5, 2012 of $.027 per share. Since the transactions were for 2011 services, the Company applied retroactive statement to the consolidated financial statements as of and for the years ended December 31, 2011.