STOCKHOLDERS' EQUITY - Note 14

9 Months Ended

Sep. 30, 2013

Notes to Financial Statements

STOCKHOLDERS' EQUITY - Note 14

NOTE 14 - STOCKHOLDERS' EQUITY

COMMON STOCK

On January 25, 2013 the Company issued 186,000 shares of its common stock to its Board of Directors for the service period from January 1, 2013 to December 31, 2013. These shares were valued at $0.65 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $49,725 and $79,950 for the three and six months ended June 30, 2013 respectively. At June 30, 2013, the balance of unamortized stock compensation expense to be recognized in future periods related to such shares issuances was $40,950.

On January 25, 2013 the Company issued 20,000 shares of its common stock to consultants for the service period from January 1, 2013 to December 31, 2013. These shares were valued at $0.65 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $3,250 and $6,500 for the three and six months ended June 30, 2013 respectively. At June 30, 2013, the balance of unamortized stock compensation expense to be recognized in future periods related to such shares issuances was $6,500.

On November 12, 2012, the Company issued 100,000 shares of its common stock to consultants for the service period from November 1, 2012 to October 31, 2013. These shares were valued at $0.80 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $20,000 and $40,000 for the three and six months ended June 30, 2013 respectively. At June 30, 2013, the balance of unamortized stock compensation expense to be recognized in future periods related to such shares issuances was $26,667.

On October 8, 2012, the Company issued 30,000 shares of its common stock to legal counsel for services rendered and a consultant for the service period from October 1, 2012 to September 30, 2013, respectively. These shares were valued at $0.90 per share which was the closing price on the date of Board Approval. The Company recorded non-cash compensation expense of $6,750 and $13,500 for the three and six months ended June 30, 2013 respectively. At June 30, 2013, the balance of unamortized stock compensation expense to be recognized in future periods related to such shares issuances was $6,750.

On May 22, 2012, the Company issued 302,800 shares of its common stock to its employees, consultants and directors in replacement for cancelling 1,339,000 outstanding options that were held by the same recipients. The shares have the same vesting schedule as the options and were valued at $1.12 per share, the closing price on the date of Board Approval. Based on the difference between the market value of the shares and the Black-Scholes value of the cancelled options as of May 22, 2012, there is an incremental non-cash compensation expense of $308,553 to be recorded over the service period.

On October 4, 2011, the Board of Directors approved a grant of 1,130,000 shares of common stock to members of management for their services over the next three and a half years. The shares were valued at $1.19 per share, the closing price on the date of Board approval. As of December 31, 2011, 100,000 of such shares were recorded as shares to be issued; the shares were subsequently issued on February 28, 2012. The Company recorded non-cash compensation expense of $317,050 and $396,100 for the three and six months ended June 30, 2013, respectively. The Company recorded non-cash compensation expense of $96,050 and $192,100 for the three and six months ended June 30, 2012 respectively. At June 30, 2013, the balance of unamortized stock compensation expense to be recognized in future periods related to such shares issuances was $315,350.

On November 29, 2011, the Board of Directors approved a grant of 200,000 shares of common stock to management and one consultant for their services over the next two years. The shares were valued at $0.79 per share, the closing price on the date of Board Approval. For the three and six months ended June 30, 2013 and 2012, the Company recorded non-cash compensation expense of $19,750 and $19,750 and $39,500 and $39,500 respectively. At June 30, 2013, the balance of unamortized stock compensation expense to be recognized in future periods related to such shares issuances was $32,917.