8. STOCKHOLDERS DEFICIT | 6 Months Ended |
Jun. 30, 2013 |
Equity [Abstract] | ' |
STOCKHOLDERSb DEFICIT | ' |
(A) Common Stock Issued for Cash |
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On April 28, 2006, the Company issued 8,000 shares of common stock for cash of $400 ($0.05 per share). |
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On January 8, 2007 the Company issued 1,750,000 shares of common stock for $15,000 ($0.01/share). This agreement was subsequently terminated effective May 23, 2007. |
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On January 22, 2007 the Company issued 12,000,000 shares of common stock for $103,000 ($0.01/share). In addition, 9,000,000 shares were issued for $3,000 ($0.0003/share). |
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On April 4, 2007, the Company issued 1,875,000 shares of common stock for cash of $15,000 ($0.01 per share). |
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On April 20, 2007, the Company issued 1,875,000 shares of common stock for cash of $15,000 ($0.01 per share). |
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On May 18, 2007, the Company issued 13,125,000 shares of common stock for cash of $105,000 ($0.01 per share). |
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On August 28, 2007 the Company entered into a stock purchase agreement to issue 80,495,000 shares common stock in the amount of $241,485 ($0.003/share). |
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On August 29, 2007 the Company entered into a stock purchase agreement to issue 200,000 shares common stock in the amount of $600 ($0.003/share). |
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On August 29, 2007 the Company entered into a stock purchase agreement to issue 8,300,000 shares common stock in the amount of $24,900 ($0.003/share). |
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On September 1, 2007 the Company entered into a stock purchase agreement to issue 25,000 shares common stock in the amount of $75 ($0.003/share). |
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On September 5, 2007 the Company entered into a stock purchase agreement to issue 120,000 shares common stock in the amount of $360 ($0.003/share). |
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On September 12, 2007 the Company entered into a stock purchase agreement to issue 1,025,000 shares common stock in the amount of $3,075 ($0.003/share). |
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In accordance with the May 2007 stock purchase agreement which contains an anti-dilution clause which requires the Company to issue additional common shares under the stock purchase agreement for any subsequent issuance at a price below $.08 per share for a period of 12 months, the Company has issued 28,125,000 additional shares through May 2008 as a result of the subsequent stock issuances at $0.003/share. |
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On April 24, 2009 the Company issued 2,000,000 shares of common stock for $20,000 ($0.01/share). |
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On May 22, 2009, the Company issued 500,000 shares of common stock for $5,000 ($0.01/share). |
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On September 30, 2009, the Company issued 366,599 shares of common stock for $3,000 ($0.01/share). |
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On May 18, 2010, the Company issued 4,000,000 shares of common stock for cash of $21,642 and in exchange of $6,990 in note payables ($0.007158 per share). |
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On July 21, 2010, the Company issued 1,875,000 shares of common stock for $15,000 ($0.008/share). |
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On September 10, 2010, the Company issued 1,351,351 shares of common stock for $20,000 ($0.0148/share). |
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On September 22, 2010, the Company issued 1,286,765 shares of common stock for $35,000 ($0.0272/share). |
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On October 15, 2010, the Company issued 1,179,245 shares of common stock for $100,000 ($0.084/share). |
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On December 7, 2010, the Company issued 1,157,407 shares of common stock for $75,000 ($0.065/share). |
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On January 25, 2011 the Company issued 1,470,588 shares of common stock for $100,000 ($0.068/share). |
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On March 22, 2011 the Company issued 2,083,333 shares of common stock for $100,000 ($0.048/share). |
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On April 18, 2011 the Company issued 1,029,412 shares of common stock for $70,000 ($0.07/share). |
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On April 22, 2011 the Company issued 1,420,455 shares of common stock for $100,000 ($0.07/share). |
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On September 22, 2011, the Company issued 1,372,119 shares of common stock for $100,000 ($0.07/share). |
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On November 9, 2011, the Company issued 1,314,406 shares of common stock for $100,000 ($0.08/share). |
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On December 16, 2011, the Company issued 1,543,210 shares of common stock for $100,000 ($0.06/share). |
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On January 20, 2012, the Company issued 1,562,500 shares of common stock for $100,000 ($0.06/share). |
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On April 19, 2012, the Company issued 2,403,846 shares of common stock for $100,000 ($0.06/share). |
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On May 19, 2012, the Company issued 1,923,077 shares of common stock for $100,000 ($0.05/share). |
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On June 29, 2012, the Company issued 2,155,172 shares of common stock for $100,000 ($0.04/share). |
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On December 21, 2012, the Company issued 1,004,832 shares of common stock for $25,000 ($0.02/share). |
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On February 19, 2013, the Company issued 961,538 shares of common stock for $50,000 ($0.05/share). |
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On March 4, 2013, the Company issued 945,537 shares of common stock for $50,000 ($0.05/share). |
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On April 1, 2013, the Company issued 822,368 shares of common stock for $50,000 ($0.06/share). |
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On April 15, 2013, the Company issued 884,434 shares of common stock for $75,000 ($0.08/share). |
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During the six months ended June 30, 2013, the Company had to issue an additional 845,800 make-up shares related to a transaction entered into during the year ended December 31, 2012. |
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(B) Common Stock Issued for Intellectual Property |
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On April 26, 2006, the Company issued 332,292,000 shares of common stock to its founder having a fair value of $180 ($0.000001/share) in exchange for intellectual property. The fair value of the patent was determined based upon the historical cost of the intellectual property contributed by the founder. |
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(C) Common Stock Issued for Services |
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On May 8, 2006, the Company entered into a license agreement for research and development. Pursuant to the terms of the agreement, the Company issued 17,500,000 shares of common stock upon execution of the agreement. The Company also received a five-year call option from the license holder to repurchase 7,000,000 common shares at an exercise price of $150,000 or $.02 per share. The option gives the Company the right, but not the obligation to repurchase the shares of common stock. The call option expires May 4, 2011. As of June 30, 2011 the value of the stock was $.07 per share. The Company does not have the obligation to repurchase the shares. |
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On July 1, 2006 the Company entered into a five year consulting agreement for research and development. Pursuant to the terms of the agreement, the Company paid 700,000 shares of common stock upon execution. These shares had a fair value of $5,600 ($0.01/share) based upon the recent cash offering price. Additionally, 2,000,000 shares of common stock were issued on May 18, 2007 with a fair value of $16,000 ($0.01/share). As of December 31, 2008, the Company issued 600,000 shares of common stock for consulting services rendered with a fair value of $6,000 ($0.01/share). On January 15, 2008 the Company authorized the issuance of 400,000 shares of common stock for consulting services rendered with a fair value of $4,000 ($0.01/share). |
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On July 1, 2009, the issuance of 280,000 shares was approved by the board of directors as repayment for services previously provided to the Company by a consultant having a fair value of $14,000 ($0.05/share) in accordance with a consulting agreement (See Note 9(C)). |
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On July 1, 2009, the issuance of 482,825 shares was approved by the board of directors as partial payment for services previously provided to the Company by a consultant in accordance with a consulting agreement. The total amount of issuable shares for the consultant is 1,122,311 shares, which includes 400,000 issuable shares previously approved by the board of directors and 239,486 shares were approved to be issued on November 19, 2009 for a fair value of $18,000 (See Note 9(C)). |
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On August 3, 2009, the Company entered into an agreement with a consultant to provide investor relations services. On October 5, 2009 the Company issued 10,000,000 shares with a fair value of $200,000 ($0.02/share) to a consultant for investor relations to be provided over a term of 180 days. The Company started receiving services beginning October 5, 2009. As of March 31, 2010 $200,000 was recorded (See Note 9(D)). |
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On January 15, 2010 the Company issued 500,000 shares with a fair value of $5,000 ($0.01/share) to a consultant for investor relations to be provided over a term of 12 months once certain conditions are met. As of March 31, 2010, $5,000 was recognized as deferred compensation (See Note 9). |
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On May 21, 2010 the Company issued 40,000 shares with a fair value of $400 ($0.01/share) to a consultant for research and development services (See Note 9(C )). |
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On July 30, 2010 the Company issued 2,400,000 shares with a fair value of $30,000 ($0.0125/share) to a consultant for legal services incurred in behalf of the Company. |
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On August 26, 2010 the Company issued 280,000 shares with a fair value of $14,000 ($0.05/share) to a consultant for research and development services provided in the past. |
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On August 26, 2010 the Company issued 985,915 shares with a fair value of $14,000 ($0.0142/share) to a consultant for research and development services provided in the past (See Note 9 (C)). |
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On August 26, 2010 the Company issued 4,500,000 shares with a fair value of $90,000 ($0.02/share) to a consultant for research and development services (See Note 9 (C)). |
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On August 26, 2010 the Company issued 10,000,000 shares with a fair value of $200,000 ($0.02/share) to a consultant for research and development services (See Note 9 (C)). |
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On September 16, 2010, the Company entered into an agreement with a consultant to provide technical support. On September 16, 2010 the Company issued 100,000 shares, as a sign on bonus, with a fair value of $15,000 ($0.15/share) to the consultant for technical support to be provided over the next 3 years. In addition, the consultant shall receive 30,000 shares for three years commencing on or about September 10 of each of the next three years (See Note 9(C)). |
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On September 16, 2010, the Company entered into an agreement with a consultant to provide technical support. On September 16, 2010 the Company issued 100,000 shares, as a sign on bonus, with a fair value of $15,000 ($0.15/share) to the consultant for technical support to be provided over the next 3 years. In addition, the consultant shall receive 30,000 shares for three years commencing on or about September 10 of each of the next three years (See Note 9(C)). |
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On September 23, 2010 the Company issued 387,500 shares with a fair value of $31,000 ($0.08/share) to a consultant for legal services incurred on behalf of the Company. |
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On April 1, 2011 the Company issued 1,000,000 shares with a fair value of $70,000 ($0.07/share) to a consultant for research and development services. |
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On April 18, 2011, the Company issued 1,029,412 shares of stock with a fair value of $70,000 based on the average trading price over a 30 day period for a research and development consulting agreement. |
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On October 28, 2011, the Company issued 2,200,000 shares of stock with a fair value of $242,000 ($0.11/share) to obtain the use of a license. |
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On May 24, 2012 the Company issued 3,200,000 shares with a fair value of $192,000 ($0.06/share) to a consultants for research and development services. |
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On May 24, 2012 the Company issued 300,000 shares with a fair value of $18,000 ($0.06/share) to a consultant for research and development services provided in the past. |
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On May 24, 2012 the Company issued 3,000,000 shares with a fair value of $300,000 ($0.10/share) to a consultant for research and development services provided in the past. |
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On December 18, 2012 the Company issued 1,000,000 shares with a fair value of $40,000 ($0.04/share) to a consultant for research and development services provided in the past. |
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(D) Cancellation and Retirement of Common Stock |
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On December 29, 2006, the Company’s founder returned 11,666,500 shares of common stock to the Company. These shares were cancelled and retired. Accordingly, the net effect on equity is $0. |
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(E) Common Stock Warrants (Restated) |
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During 2006, the Company issued 6,000,000 warrants to an officer under his employment agreement. The Company recognized an expense of $126,435 for the period from inception to December 31, 2006. The Company recorded the fair value of the warrants based on the fair value of each warrant grant estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in 2006, dividend yield of zero, expected volatility of 183%; risk-free interest rates of 4.98%, expected life of one year. The warrants vested immediately. The options expire between 5 and 9 years from the date of issuance and have an exercise price of between $.21 and $.40 per share. During November 2006, the Company and the officer entered into an amendment to the employment agreement whereby all the warrants were retired. |
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On July 29, 2010, the Company issued a warrant for 20,000,000 common shares in connection to a consulting agreement. The warrant was value at $200,000, the fair value of the services to be provided pursuant to the agreement. The warrant has a term of 2 years. |
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On October 4, 2010, the Company issued 5,177,801 shares in connection with the cashless exercise of the 6,000,000 warrants. |
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On May 11, 2011, the Company issued 19,767,985 shares in connection with the cashless exercise of the 20,000,000 warrants. |
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On November 21, 20112012, the Company issued 10-year warrants for 10,000,000 shares with a consultant, with an exercise price of $0.001 per share. The warrants were granted for services rendered (See Notes 2 and 8(D)). The warrants had a fair value of $400,000, based upon the Black-Scholes option-pricing model. The Company used the following weighted average assumptions: |
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Expected dividends | | | 0 | % | | | | | | | | | | | | | | |
Expected volatility | | | 283.23 | % | | | | | | | | | | | | | | |
Expected term | | 10 years | | | | | | | | | | | | | | | |
Risk free interest rate | | | 1.69 | % | | | | | | | | | | | | | | |
Expected forfeitures | | | 0 | % | | | | | | | | | | | | | | |
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| | Number of Warrants | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Life (in Years) | | | | | | | |
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Balance, December 31, 2011 | | | - | | | $ | - | | | | | | | | | | |
Granted | | | 10,000,000 | | | | 0.001 | | | | | | | | | | |
Exercised | | | | | | | | | | | | | | | | | |
Cancelled/Forfeited | | | - | | | | - | | | | | | | | | | |
Balance, December 31, 2012 | | | 10,000,000 | | | | 0.001 | | | | 9.9 | | | | | | | |
Granted | | | - | | | $ | - | | | | | | | | | | | |
Exercised | | | - | | | $ | - | | | | | | | | | | | |
Cancelled/Forfeited | | | - | | | | | | | | | | | | | | | |
Balance, June 30, 2013 | | | 10,000,000 | | | $ | 0.001 | | | | 9.4 | | | | | | | |
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Intrinsic Value | | | 590,000 | | | | | | | | | | | | | | | |
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For the six months ended June 30, 2013, the following warrants were outstanding: |
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Exercise | | | Warrants | | | Warrants | | | Remaining | | | Aggregate | |
Price | | | Outstanding | | | Exercisable | | | Contractual Life | | | Intrinsic Value | |
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$ | 0.001 | | | | 10,000,000 | | | | 10,000,000 | | | | 9.4 | | | $ | 590,000 | |
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For the year ended December 31, 2012, the following warrants were outstanding: |
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Exercise | | | Warrants | | | Warrants | | | Remaining | | | Aggregate | |
Price | | | Outstanding | | | Exercisable | | | Contractual Life | | | Intrinsic Value | |
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$ | 0.001 | | | | 10,000,000 | | | | 10,000,000 | | | | 9.895890411 | | | $ | 365,000 | |
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(F) Amendment to Articles of Incorporation |
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On February 16, 2009, the Company amended its articles of incorporation to amend the number and class of shares the Company is authorized to issue as follows: |
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● | Common stock Class A, unlimited number of shares authorized, no par value | | | | | | | | | | | | | | | | | |
● | Common stock Class B, unlimited number of shares authorized, no par value | | | | | | | | | | | | | | | | | |
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● | Preferred stock, unlimited number of shares authorized, no par value | | | | | | | | | | | | | | | | | |
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(G) Stock Split Effected in the Form of a Stock Dividend |
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On March 23, 2009, the Company's Board of Directors declared a nine-for-one stock split to be effected in the form of a dividend. The stock dividend was distributed to shareholders of record as of April 27, 2009. A total of 449,773,650 shares of common stock were issued. All basic and diluted loss per share and average shares outstanding information has been adjusted to reflect the aforementioned stock dividend. |
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