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9. Outstanding Warrants

12 Months Ended

Dec. 31, 2012

Text Block [Abstract]

9. Outstanding Warrants

9. Outstanding Warrants

For the twelve months ended December 31, 2012, the Company granted 1,816,000 common stock warrants, which had the potential to enhance returns for accredited investors who entered into additional Notes and Warrant Purchase Agreements. The accredited investors received 5-year warrants exercisable at $0.001 per share.

For the Twelve months ended December 31, 2012, Note investors exercised 1,432,667 warrant shares at a weighted average exercise price of $0.001 per share.

For the twelve months ended December 31, 2012, 392,479 Series B Preferred stock warrants and 5,000 common stock warrants expired, both classes of warrant shares having a weighted average exercise price of $3.00 per share.

A summary of historical warrant activity for the years ended December 31, 2011 and 2012 follows:

Preferred Stock
		Warrants Outstanding & Exercisable				Weighted - Average Exercise Price				Average Remaining Term in Years
Outstanding December 31, 2010			443,853				3.00				1.18
Expired			(51,374	)			3.00				-
Outstanding December 31, 2011			392,479				3.00				0.25
Expired			(392,479	)			3.00				-
Outstanding December 31, 2012			-			$	-				-

Common Stock
		Warrants Outstanding & Exercisable				Weighted - Average Exercise Price				Average Remaining Term in Years
Outstanding December 31, 2010			1,428,590				0.35				4.08
Expired			-				-				-
Outstanding December 31, 2011			1,428,590				0.35				3.08
Granted			1,816,000				0.001				-
Exercised			(1,432,667	)			0.001				-
Expired			(5,000	)			3.00				-
Outstanding December 31, 2012			1,806,923			$	0.27				2.67

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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