7. RELATED PARTY TRANSACTIONS	12 Months Ended
Dec. 31, 2014
Related Party Transactions [Abstract]
7. RELATED PARTY TRANSACTIONS	*Sales to Affiliates –* In September 2005, Water Science, a related party, paid to the Company $1,000,000 for the exclusive rights to sell our products in South America and Mexico. The agreement allows for a pro-rated refund during the first 5 years under certain circumstances. The Company recognizes income from this agreement over the first 5 years of the agreement. The Company fully recognized the exclusivity rights during 2010. This agreement also gives Water Science the rights to purchase machinery from the Company at cost plus 25 percent. The Company had sales of $38,234 and $132,574 during the years ended December 31, 2014 and 2013, respectively. The Company has received and recorded $413,595 and $433,540 in advance deposits from Water Science on machine orders at December 31, 2014 and 2013, respectively. *Notes Payable –* See Note 9 for disclosure of related party Notes Payable. *Advances* – Periodically throughout the year, the Company advances officers and employees cash for certain reimbursable expenses. As of December 31, 2014 and 2013, the Company had advances to employees or officers in the amount of $1,500 and $1,500, respectively. *Employee Options* – In December 2007, the Company granted 480,260 options to various employees. The options are for a term of ten (10) years and have an exercise price of $1.30 per share. The options vested over a period of four (4) years. The options were valued using the Binomial model with the following assumptions: risk free rate of 4.64%, volatility at 87.06% and the stock price at $1.30. The value of each option was approximately $1.13. In May 2009, 36,000 options were cancelled due to the departure of an employee. The exercise price per option was adjusted to $0.31 by the Company in September 2010. The options were fully vested as of December 31, 2012. In November 2007, the Company granted 530,000 options to Douglas Kindred, in connection with the appointment of Mr. Kindred as Chief Technology Officer. The options are for a term of ten (10) years and have an exercise price of $1.30 per share. The options vested over a period of four (4) years. The options were valued using the Binomial model with the following assumptions: risk free rate of 4.28%, volatility at 85.99% and the stock price at $1.01. The exercise price per option was adjusted to $0.31 by the Company in September 2010. The options were fully vested as of December 31, 2012. *Director Options* – See Note 10 for disclosure about grants of director stock options.

7. RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2014

Sales to Affiliates – In September 2005, Water Science, a related party, paid to the Company $1,000,000 for the exclusive rights to sell our products in South America and Mexico. The agreement allows for a pro-rated refund during the first 5 years under certain circumstances. The Company recognizes income from this agreement over the first 5 years of the agreement. The Company fully recognized the exclusivity rights during 2010. This agreement also gives Water Science the rights to purchase machinery from the Company at cost plus 25 percent. The Company had sales of $38,234 and $132,574 during the years ended December 31, 2014 and 2013, respectively. The Company has received and recorded $413,595 and $433,540 in advance deposits from Water Science on machine orders at December 31, 2014 and 2013, respectively.

Notes Payable – See Note 9 for disclosure of related party Notes Payable.

Advances – Periodically throughout the year, the Company advances officers and employees cash for certain reimbursable expenses. As of December 31, 2014 and 2013, the Company had advances to employees or officers in the amount of $1,500 and $1,500, respectively.

Employee Options – In December 2007, the Company granted 480,260 options to various employees. The options are for a term of ten (10) years and have an exercise price of $1.30 per share. The options vested over a period of four (4) years. The options were valued using the Binomial model with the following assumptions: risk free rate of 4.64%, volatility at 87.06% and the stock price at $1.30. The value of each option was approximately $1.13. In May 2009, 36,000 options were cancelled due to the departure of an employee. The exercise price per option was adjusted to $0.31 by the Company in September 2010. The options were fully vested as of December 31, 2012.

In November 2007, the Company granted 530,000 options to Douglas Kindred, in connection with the appointment of Mr. Kindred as Chief Technology Officer. The options are for a term of ten (10) years and have an exercise price of $1.30 per share. The options vested over a period of four (4) years. The options were valued using the Binomial model with the following assumptions: risk free rate of 4.28%, volatility at 85.99% and the stock price at $1.01. The exercise price per option was adjusted to $0.31 by the Company in September 2010. The options were fully vested as of December 31, 2012.

Director Options – See Note 10 for disclosure about grants of director stock options.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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