Common Stock, Options and Warrants

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

Note 9. Common Stock, Options and Warrants

The Company has authorized 150,000,000 shares of its common stock, $0.01 par value.  The Company had issued and outstanding 52,728,644 shares of its common stock at March 31, 2014 and December 31, 2013.  In December 2009, the shareholders of the Company approved an increase in the number of authorized common stock to 150,000,000 shares.  The increase took effect in January 2010 with the filing of the amendment to the articles of incorporation with the State of Nevada.

On May 21, 2013, the Company’s authorized the issuance of 1.0 million shares of common stock to management as compensation for services with a fair value of $30,000.

On December 6, 2013, the Company authorized the issuance of 900,000 shares of common stock to management as compensation for services with a fair value of $9,000.

Other than the issuances to certain Note investors of an aggregate of 272,000 shares of the Company’s common stock, as described in Note 6 above, 1,800,000 shares of the Company’s common stock issued related to a professional services agreement, as described in Note 11 below, 300,000 shares issued as settlement of accounts payable, and 1,900,000 issued to management, no common stock, or options to purchase common stock, were issued or granted during the three months ended March 31, 2014.

During the three months ended March 31, 2014, approximately 15,000 options and 763,000 warrants to purchase the Company’s common stock expired.

2007 Incentive and Non-Qualified Stock Option Plan.  The fair value of options granted under the Company’s 2007 Incentive and Non-Qualified Stock Option Plan is recorded as compensation expense over the vesting period, or, for performance based awards, the expected service term.  During the three months ended March 31, 2014 and 2013, the Company had no compensation expense related to employee stock options.