EQUITY

9 Months Ended

Sep. 30, 2015

EQUITY:

EQUITY

5. EQUITY

Common Stock

On January 7, 2015, we issued 4,000,000 shares of common stock (valued at $96,000) to an investment consulting firm for services which had been accrued as of December 31, 2014.

On February 5, 2015, we issued 875,000 shares of common stock to investors in connection with of the issuance of the Q4 2014 Convertible Notes that closed in Q1 2015.

On February 5, 2015, we issued a total of 5,950,000 shares of common stock (valued at $59,500) to four consultants for services rendered.  

On February 9, 2015, we issued a total of 5,250,000 shares of common stock (valued at $52,500) to three consultants for services rendered.  Additionally, we issued 250,000 shares of common stock to each of our five Board Members for a total of 1,250,000 shares of common stock (valued at $12,500) for their participation at the 2015 Annual Board meeting held in January 2015.

On March 3, 2015, Atlantic exercised its right to convert the $200,000 Atlantic Note into 12% of the Company’s outstanding shares of common stock as of November 13, 2014.  As a result, the Company issued 22,523,226 share of our common stock, valued at $225,232, to Atlantic as conversion of the $200,000 convertible note plus accrued interest of approximately $13,000.  

On March 5, 2015, we issued 5,000,000 shares of common stock (valued at $80,000) to our patent attorney for payment of accrued expenditures totaling $60,000 at December 31, 2014.

On March 14, 2015, we issued 1,500,000 shares of common stock (valued at $15,000 and recorded in Additional Paid-In Capital as finance costs as of December 31, 2014) to investors in connection with the issuance of the Q4 2014 Convertible Notes that closed in Q1 2015.

On April 10, 2015, we issued 125,000 shares of common stock to a investor in connection with of the issuance of the Q1 2015 Convertible Notes that closed in Q1 2015.

On August 12, 2015 we issued 8,000,000 shares of common stock to an investor, who converted their $120,000 in Convertible Promissory Notes dated February 10, 2015.

On August 20, 2015, we issued  a total of 3,450,000 shares of common stock (valued at $34,500) to four consultants for services rendered.

On August 20, 2015, we issued 5,750,000 shares of common stock (valued at $57,500) to a financial institution for corporate banking and strategic advisory services rendered.

On August 20, 2015, we issued a total of 800,000 shares to of common stock (valued at $8,000) to two employees and three consultants for services rendered.

The Company issued the following shares of common stock during the nine months ended September 30, 2015:

		Value of Shares	Number of Shares
Shares issued for services rendered	$	389,014	29,525,000
Shares issued for accrued expenses		229,438	12,562,500
Shares issued for financing costs		-	125,000
Shares issued for conversion of debt		345,232	30,523,226
Total shares issued	$	963,684	72,735,726

Shares issued for services rendered were to various members of management, the Board of Directors, employees and consultants and are expensed as Stock-Based Compensation in the accompanying consolidated statement of operations.  Shares issued for conversion of debt relate to conversion of the Atlantic Note discussed in Note 4.  

Common Stock Warrants

Since inception, the Company has issued warrants to purchase shares of the Company’s common stock to shareholders, consultants and employees as compensation for services rendered and/or through private placements.  

A summary of the Company’s warrant activity and related information is provided below:

	Exercise Price $		Number of Warrants
Outstanding and exercisable at December 31, 2014		0.02		2,000,000
Warrants exercised		-		-
Warrants granted		0.02		4,550,000
Warrants expired		0.02		(2,000,000)
Outstanding and exercisable at September 30, 2015		0.02		4,550,000

Stock Warrants as of September 30, 2015
Exercise	Warrants		Remaining		Warrants
Price	Outstanding		Life (Years)		Exercisable
$0.02		3,300,000		1.84	3,300,000
$0.15		1,250,000		2.41	1,250,000

On August 2, 2015 3,300,000 warrants were issued to two advisors as part of their advisory Agreements dated February 2, 2015. The warrants expire on August 3, 2017 at an exercise price of $0.02.

On August 27, 2015, 1,250,000 warrants were isssues to an accredited investor as part of their Note and Share Purchase Agreement. The warrants expire on February 26, 2018 at an exercise price of $0.015.

Common Stock Options

Under the Company’s 2008 Equity Compensation Plan (the “2008 Plan”), we are authorized to grant stock options intended to qualify as Incentive Stock Options, “ISO”, under Section 422 of the Internal Revenue Code of 1986, as amended, non-qualified options, restricted and unrestricted stock awards and stock appreciation rights to purchase up to 7,000,000 shares of common stock to our employees, officers, directors and consultants, with the exception that ISOs may only be granted to employees of the Company and its subsidiaries, as defined in the 2008 Plan.  After adjusting for expired and estimated pre-vesting forfeitures, options for approximately 2,235,000 shares were still available for grant under the 2008 Plan as of September 30, 2015.

Stock option activity under the 2008 Plan for the nine months ended September 30, 2015 is summarized as follows:

	Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (in years)		Grant Date Fair Value
Outstanding at December 31, 2014	452,493		$0.08	1.09	$	46,901
Options granted	-		-	-		-
Options exercised	-		-	-		-
Options cancelled / forfeited / expired	(452,493)		-	-		(46,901)
Outstanding at September 30, 2015	-	$	0.00	-	$	-
Exercisable at September 30, 2015	-	$	0.00	-	$	-

The Company recognizes option expense ratably over the vesting periods.  As all outstanding options had vested as of December 31, 2012, we have recognized no compensation expense related to options granted under the 2008 Plan during the three and nine months ended September 30, 2015 and 2014.  The Company intends to issue new shares to satisfy share option exercises.