Note 10. Stock Warrants: Warrants Exercised (Policies)	9 Months Ended
Sep. 30, 2014
Policies
Warrants Exercised	In February 2013, the Board of Directors approved a plan to modify all Company warrants by offering any warrant holder who exercises a “replacement warrant”. All other terms and conditions of all outstanding warrants remain unchanged. In February and March 2013, five warrant holders exercised a total of 127,264 warrants at $1.00 and were issued a total of 127,264 shares of restricted common stock and 127,264 replacement warrants. All of the $123,878 in proceeds from the exercises were used in operations. The incremental fair value of $178,200 associated with the exercises and concurrent issuances of replacement warrants was determined using the Black-Scholes model was recorded as a deemed dividend to common stockholders in the Statement of Stockholders’ Equity in the first quarter of 2013. In all instances the shares and the warrants issued and sold were in a private offering transaction pursuant to an exemption under Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving a public offering. In September 2014, the Board of Directors approved a plan to offer to all Company warrants holders a 25% discount on the exercise price to any warrant holder who exercises warrants, and a second 25% discount on any subsequent warrant exercise, but within a specific “discount period” and only on a temporary basis. Any warrant holder who exercised within the discount period also received a “replacement warrant” on a 1.5 to 1 basis. All other terms and conditions of all outstanding warrants remain unchanged, and the discount offer was temporary. During the discount period, five warrant holders exercised a total of 250,009 warrants at various exercise prices and were issued a total of 250,009 shares of restricted common stock and 375,014 replacement warrants. As a condition of exercise, all of the $121,952 in cash proceeds from the exercises were restricted for future payment to specific creditors as agreed upon with the warrant holders. The balance at September 30 2014 of the restricted cash balance from these warrant exercises was $83,405 and is classified as restricted in the balance sheet. The incremental fair value of $502,890 associated with the exercises and concurrent issuances of replacement warrants was determined using the Black-Scholes model and was recorded as a deemed dividend to common stockholders in the Statement of Stockholders’ Equity in the third quarter of 2014. In all instances the shares and the warrants issued and sold were in a private offering transaction pursuant to an exemption under Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving a public offering.

Note 10. Stock Warrants: Warrants Exercised (Policies)

9 Months Ended

Sep. 30, 2014

In February 2013, the Board of Directors approved a plan to modify all Company warrants by offering any warrant holder who exercises a “replacement warrant”. All other terms and conditions of all outstanding warrants remain unchanged. In February and March 2013, five warrant holders exercised a total of 127,264 warrants at $1.00 and were issued a total of 127,264 shares of restricted common stock and 127,264 replacement warrants. All of the $123,878 in proceeds from the exercises were used in operations. The incremental fair value of $178,200 associated with the exercises and concurrent issuances of replacement warrants was determined using the Black-Scholes model was recorded as a deemed dividend to common stockholders in the Statement of Stockholders’ Equity in the first quarter of 2013. In all instances the shares and the warrants issued and sold were in a private offering transaction pursuant to an exemption under Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving a public offering.

In September 2014, the Board of Directors approved a plan to offer to all Company warrants holders a 25% discount on the exercise price to any warrant holder who exercises warrants, and a second 25% discount on any subsequent warrant exercise, but within a specific “discount period” and only on a temporary basis. Any warrant holder who exercised within the discount period also received a “replacement warrant” on a 1.5 to 1 basis. All other terms and conditions of all outstanding warrants remain unchanged, and the discount offer was temporary. During the discount period, five warrant holders exercised a total of 250,009 warrants at various exercise prices and were issued a total of 250,009 shares of restricted common stock and 375,014 replacement warrants. As a condition of exercise, all of the $121,952 in cash proceeds from the exercises were restricted for future payment to specific creditors as agreed upon with the warrant holders. The balance at September 30 2014 of the restricted cash balance from these warrant exercises was $83,405 and is classified as restricted in the balance sheet. The incremental fair value of $502,890 associated with the exercises and concurrent issuances of replacement warrants was determined using the Black-Scholes model and was recorded as a deemed dividend to common stockholders in the Statement of Stockholders’ Equity in the third quarter of 2014. In all instances the shares and the warrants issued and sold were in a private offering transaction pursuant to an exemption under Section 4(2) of the Securities Act of 1933 for transactions by an issuer not involving a public offering.