STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2012

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 9 – STOCKHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of noncumulative, non-voting, nonconvertible preferred stock, $0.001 par value per share. At December 31, 2012 and 2011, no shares of preferred stock were outstanding.

Common Stock

On November 20, 2012, stockholders of the Company approved to increase the authorized shares of common stock from 120,000,000 to 200,000,000 shares, $0.001 par value per share. At December 31, 2012 and 2011, 90,619,444 and 89,119,405 shares were issued and outstanding, respectively.

2012

During the year ended December 31, 2012, the Company issued a total of 103,580 shares of restricted common stock to directors and consultants as payment of fees. The value of the restricted shares was recorded at $151,059. During the year ended December 31, 2012, warrant holders received 106,774 shares of the Company's common stock through cashless exercises. During the year ended December 31, 2012 option holders received 39,685 shares of the Company's common stock through a cashless exercise. Also during the year ended December 31, 2012 the Company sold a total of 1,250,000 shares of common stock priced at $1.30 per share at the then current share price.

2011

During the year ended December 31, 2011, the Company issued a total of 97,612 shares of restricted common stock to directors and consultants as payment of fees. The value of the restricted shares was recorded at $118,436. During the year ended December 31, 2011, a warrant holder received 5,570 shares of the Company's common stock through a cashless exercise. During the year ended December 31, 2011 an option holder received 41,935 shares of the Company's common stock through a cashless exercise. Also during the year ended December 31, 2011, the Company sold a total of 14,250,000 shares of common stock at pricing between $1.25 and $1.53 per share, collecting a total of $10,805,000, less $230,000 of offering expenses. A portion of these shares was purchased by a related party. (See Note 14).

2010

During the year ended December 31, 2010, the Company issued a total of 40,606 shares of common stock to directors as payment of director's fees. The value of these shares was recorded at $30,000.

During the year ended December 31, 2010, the Company issued a total of 41,305 shares of common stock to outside consultants for the performance of services. The value of these shares was recorded at $35,079.

During the year ended December 31, 2010, the Company exercised its ability to mandatorily convert portions of its convertible debt and unpaid interest to 2,457,500 shares of common stock.

During the year ended December 31, 2010, the Company issued 427,714 shares of common stock to related parties as part of a forbearance agreement signed in connection with the shareholders' class action lawsuit. The value of such shares was recorded at $320,786. (See Note 14)

During the year ended December 31, 2010, the Company received 3,044,083 shares from its former CEO who relinquished his rights to them as part of the settlement of the shareholders' class action lawsuit. The shares of common stock were considered forfeited and returned to unissued shares. The Company paid $170,000 related to the finalization of the share forfeiture and cancellation. (See Note 14)

During the year ended December 31, 2010, the Company filed an S-1 registration statement allowing for the registration of 12,981,412 shares of common stock some of which are issuable upon the conversion of 10% PIK Convertible Notes due 2018.