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Commitments and Contingencies
 9 Months Ended
Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
7.
Commitments and Contingencies
 
 
 
Leases
 
 
 
The Company leases a plant in Kentucky under an operating lease which expires May 31, 2016.  Future minimum base rental payments required under the lease are as follows:
 
Year ending December 31
 
 
 
 
2013 (3 months)
 
$
10,240
 
2014
 
 
41,675
 
2015
 
 
42,187
 
2016
 
 
17,578
 
Total
 
$
111,680
 
 
 
Rent expense for the three month periods ended September 30, 2013 and 2012, was $16,619 and $9,146, respectively.  Rent expense for the nine month periods ended September 30, 2013 and 2012, was $35,179 and $40,577, respectively.
 
 
 
Employment and Consulting Agreements
 
 
 
During 2013 the Company entered into a consulting agreement, effective February 1, 2013 with an unrelated third party.  Under the terms of the agreement, the consultant receives $15,000 per month, and an option to purchase 250,000 shares of common stock at $0.20 per share, which vested on May 1, 2013, and expires 2023.  In addition, the consultant received options to purchase 375,000 shares of common stock at $0.40 and $375,000 options at $0.80, contingent on the Company’s revenue exceeding $5,000,000 and $10,000,000, as defined.  In June 2013, the Company entered into an employment agreement with this individual and issued additional options which allow the employee to purchase an aggregate of 1,500,000 shares at exercise prices ranging from $1.50 to $5.00, contingent upon the Company’s revenue exceeding $20,000,000, $50,000,000 and $100,000,000 as defined.
 
 
The Company has entered into various other agreements with officers, directors, employees and consultants that expire in one to ten years. The Company President’s annual base salary of $120,000 was amended to $145,000 effective October 12, 2012. Annual compensation agreements for other officers, directors, employees and consultants range from $5,000 per month to amounts to $17,500 per month. In addition, the agreements provide for bonus compensation to these individuals aggregating 16.5 percent of the Company’s pretax income.
 
 
 
Legal Matters
 
 
 
In the normal course of business operations the Company may become involved in various legal matters. At September 30, 2013, the Company’s management does not believe that there are any potential legal matters that could have an adverse effect on the Company’s financial position.
 
 
 
In November 2009, the Company entered into a settlement agreement to resolve all aspects of litigation relating to a patent suit. As part of that settlement agreement, the Company received $440,000 as reimbursement for litigation costs. The Company also was awarded $200,000 in eight installments of $25,000 every six months beginning on January 15, 2011, in return for an exclusive patent license. The term of the license agreement is consistent with the term of the $25,000 semiannual payments. The $25,000 installments are being recorded as revenue only upon receipt of the funds. As of September 30, 2013, $50,000 remained to be paid to the Company under this agreement.