SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2012

Stockholders Equity Note [Abstract]

SHAREHOLDERS' EQUITY

9.      SHAREHOLDERS’ EQUITY

The Company issued a total of 22,362,715 common shares and cancelled a total of 62,666 in the quarter ended March 31, 2012, described further as follows:

The Company’s independent directors annual compensation is $16,000 to be paid quarterly in restricted stock. The Company issued the directors 363,635 shares of restricted stock on January 1, 2012 for their fourth quarter 2011 compensation.

The Company issued 3,120,833 shares of common stock to management employees in lieu of $171,646 cash compensation for services rendered in the fourth quarter of 2011 which had been recorded at a value of $3,121 in stock based compensation based upon individual tax elections made by each recipient. The shares vest six months after issuance and are subject to forfeiture upon voluntary termination of employment. During the first quarter of 2012, 62,666 compensation shares previously issued for services were forfeited.

The Company issued 1,850,000 shares of restricted stock to its national public relations firm in exchange for $168,500 in services to be rendered from February 7, 2012 to August 7, 2012. Of the total shares, 1,350,000 serve as a retainer and the balance of 500,000 are earned 100,000 per month.

The Company issued 2,250,000 shares of restricted stock in a 2012 Private Stock Sale to five qualified investors for $225,000. The shares were accompanied by an equal number of warrants with a $0.15 strike price and termination date of December 31, 2017.

During the first quarter of 2012, six of the nineteen investors elected to convert a total of $325,000 Debenture Series 2010 plus Series B Warrants into 6,500,000 shares of common stock. . A total of $17,909 in accrued interest on the converted debentures was settled with 179,097 shares of common stock.

During the first quarter of 2012, five of the sixteen investors elected to convert a total of $650,000 Debenture Series 2010 plus Series B Warrants into 6,884,791 shares of common stock. A total of $68,046 in accrued interest on the converted debentures was settled, $16,167 in cash and $51,879 with 273,625 shares of common stock.

During the first quarter of 2012, the remaining investor elected to convert a total of $50,000 Debenture Series 2010 plus Series B Warrants into 940,734 shares of common stock.

The Company issued a total of 30,265,835 common shares in the quarter ended June 30, 2012, described further as follows:

The Company’s independent directors annual compensation is $16,000 to be paid quarterly in restricted stock. The Company issued the directors 194,175 shares of restricted stock on April 1, 2012 for their first quarter 2012 compensation.

The Company issued 1,783,986 shares of common stock to management employees in lieu of $173,750 cash compensation for services rendered in the first quarter of 2012 which had been recorded at a value of $17,840 in stock based compensation based upon individual tax elections made by each recipient. The Company issued 50,000 shares of common stock as a bonus to the Vice President of Operations which was recorded at a value of $500 in stock based compensation based upon the individual’s tax election. The shares vest six months after issuance and are subject to forfeiture upon voluntary termination of employment.

The Company issued 750,000 shares of restricted stock to a financial advisory firm in exchange for $45,000 in services to be rendered from May 10, 2012 to October 18, 2012. The agreement calls for an additional payment of 750,000 shares of restricted stock in the event the Company files another form S-1. The Company issued 200,000 shares of restricted stock to its securities law firm in exchange for $10,000 in additional services.

The Company issued 250,000 shares of restricted stock in a 2012 Private Stock Sale to one qualified investor for $25,000. The shares were accompanied by an equal number of warrants with a $0.15 strike price and termination date of December 31, 2017.

During the second quarter of 2012, twelve of the nineteen investors elected to convert a total of $521,161 Debenture Series 2011 plus Series B Warrants into 10,423,227 shares of common stock. . A total of $28,031 in accrued interest on the converted debentures was settled with 280,315 shares of common stock.

During the second quarter of 2012, ten of the sixteen investors elected to convert a total of $925,000 Debenture Series 2011 plus Series A Warrants into 9,946,762 shares of common stock. A total of $111,266 in accrued interest on the converted debentures was settled with 596,918 shares of common stock.

During the second quarter of 2012, all four investors elected to convert a total of $500,000 Debenture Series 2012 plus Series C Warrants into 5,707,764 shares of common stock. A total of $7,243 in accrued interest on the converted debentures was settled with 82,688 shares of common stock.

The Company issued a total of 3,515,105 common shares in the quarter ended September 30, 2012, described further as follows:

The Company’s independent directors annual compensation is $16,000 to be paid quarterly in restricted stock. The Company issued the directors 280,700 shares of restricted stock on July 1, 2012 for their second quarter 2012 compensation.

The Company issued 3,234,405 shares of common stock to management employees in lieu of $141,938 cash compensation for services rendered in the second quarter of 2012 which had been recorded at a value of $2,713.17 in stock based compensation based upon individual tax elections made by each recipient. The shares vest six months after issuance and are subject to forfeiture upon voluntary termination of employment.

The Company issued a total of 1,364,132 common shares in the quarter ended December 31, 2012, described further as follows:

The Company’s independent directors annual compensation is $16,000 to be paid quarterly in restricted stock. The Company issued the directors 347,828 shares of restricted stock on October 1, 2012 for their third quarter 2012 compensation.

The Company issued 1,016,304 shares of common stock to management employees in lieu of $46,750 cash compensation for services rendered in the third quarter of 2012 which had been recorded at a value of $1,016.30 in stock based compensation based upon individual tax elections made by each recipient. The shares vest six months after issuance and are subject to forfeiture upon voluntary termination of employment