Shareholders' Equity.

3 Months Ended

Mar. 31, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 6. Shareholders’ Equity.

Stock and Stock Options

On January 4, 2013, the Company issued 20,000 shares of its commons stock to director Larry Getlin in lieu of cash for $12,800 of accrued consulting fees. On March 26, 2013, the Company issued 80,000 shares of its common stock to a consultant in lieu of $34,000 of accrued consulting fees.

No stock options were granted during the three months ended March 31, 2013 and March 31, 2012.

Stock-based compensation expense related to options and warrants for the periods ended March 31, 2013 and 2012, and the period from August 17, 1999 (inception) to March 31, 2013, is outlined below. The Company estimates the amount of future stock-based compensation expense related to currently outstanding options to be approximately $23,958 for the remaining part of the year for the year ending December 31, 2013. Shares issued upon the exercise of stock options are newly issued from the Company’s authorized shares.

	Three months ended March 31,								August 17, 1999 (Inception) to
	2013				2012				March 31, 2013
	Expense		Per Share		Expense		Per Share		Expense		Per Share
Stock-based compensation	$	11,730	$	0.00	$	57,291	$	0.00	$	2,774,391	$	0.51

Common stock and warrants issued as consideration for loans and loan guarantees

The Company issues stock and warrants to various lenders and loan guarantors in consideration for their making or guaranteeing certain loans to the Company. Depending on the terms, cash flows, and other characteristics of the each loan or loan renewal, consideration paid in the form of stock and warrants is recorded as debt issuance cost or original issue discount, and amortized over the corresponding term of each loan as either interest expense or debt extinguishment expense.

Crown Note consideration (see Note 4)

As of December 31, 2012, the Company had accrued for issuance 80,460 shares of its common stock valued at $62,760 as consideration to the two guarantors of the Crown Note for the guarantee period from November 1, 2012 through December 31, 2012. On May 8, 2013, the guarantors agreed to accept as consideration warrants instead of common shares. Accordingly, the Company issued a total of 583,340 immediately vested warrants with a fair value determined using the Black-Scholes pricing model of $163,336 for the guarantee period from November 1, 2012 through March 31, 2013. At the same time the Company issued a total of 590,626 warrants valued at $165,375 as consideration to the guarantors for the period from April 1, 2013 to February 15, 2014. The warrants will vest as to 28,125 shares on the first of each month from April 2013 to January, 2014, and as to 14,063 shares on February 1, 2014, subject to adjustment if the amount of the loan guaranteed should change. All the warrants issued are five-year warrants exercisable at $0.50 per share.

Central Loans consideration (see Note 4)

As of December 31, 2012, the Company had accrued for issuance 11,774 shares of its common stock valued at $10,892 as consideration to the guarantor of the Central Loans for the guarantee period from July 17, 2012 through December 31, 2012. On May 8, 2013, the guarantor agreed to accept as consideration warrants instead of common shares. Accordingly, the Company issued to the guarantor 25,000 immediately vested warrants with a fair value of $7,000 for the guarantee period from July 17, 2012 through January 17, 2013 in the case of the Central Bank promissory note, and 25,000 immediately vested warrants with a fair value of $7,000 for the guarantee period from November 12, 2012 through May 12, 2013 in the case of the Central Bank line of credit. The Company also issued 50,000 warrants with a fair value of $14,000 for the period from January 17, 2013 to January 16, 2014 in the case of the Central Bank promissory note and 50,000 warrants valued at $14,000 for the period from May 12, 2013 to May 11, 2014 in the case of the Central Bank line of credit. These warrants will vest ratably on a monthly basis over the term of the loans, subject to adjustment if the amount of the loan amounts guaranteed should change. All the warrants issued are five-year warrants exercisable at $0.50 per share.

Consideration for $250,000 short term related party note (see Note 5)

On May 8, 2013, the lender of $250,000 pursuant to short term notes agreed to refinance the notes with a convertible note that matures on December 26, 2013. As consideration to the lender, the Company issued 150,000 immediately vested warrants with a fair value of $42,000, which were expensed as debt extinguishment expense on the refinancing date. The warrants issued are five-year warrants exercisable at $0.50 per share.

Consideration for other short term notes (see Note 5)

Pursuant to existing terms of several other loans with an aggregate principal amount of $76,000, the Company accrued for issuance a total of 71,250 warrants with a fair value of $49,800 during the three months ended March 31, 2013. All the warrants will vest on issuance upon repayment of the related loans, and will be exercisable for five years at $1.30 per share.