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5. Capital Stock
 3 Months Ended
Mar. 31, 2013
Stockholders' Equity Note Disclosure [Text Block]
5.    Capital Stock

a)    Authorized share capital

500,000,000 shares of common stock with a par value of $0.001 per share and 500,000,000 shares of preferred stock with a par value of $0.001 per share.

b)    Issued share capital

On January 2, 2013, a consultant of the Company exercised their option to acquire 1,000,000 shares of common stock of the Company at an exercise price of $0.03 per share. As consideration, the Company recorded a reduction of $30,000 in accrued interest due and payable to a Director and Officer of the Company.

c)    Stock options

On January 1, 2013, the Company granted options to acquire 1,000,000 shares of its common stock at an exercise price of $0.03 per share, to expire on December 31, 2017. The option was exercised on January 2, 2013. The compensation expense related to the stock options was $29,983.

On January 28, 2013, the Company granted consultants the option to acquire 2,300,000 shares of its common stock at an exercise price of $0.05 per share to expire on January 28, 2018. The compensation expense related to the stock options, which vested was $35,475. The compensation expense related to the unvested stock options to be recognized upon vesting is $54,960.

On March 26, 2013, the Company granted options to acquire 500,000 share of its common stock at an exercise price of $0.03 per share, to expire on March 26, 2018. The option does not vest until the consultant enters into a full-time employment role with the Company. Therefore, no compensation expense related to these options has been recognized.

A summary of stock option activity is as follows:

 
Three Months Ended
Year Ended
 
March 31, 2013 (unaudited)
December 31, 2012
 
Number of
 
Weighted Average
Number of
 
Weighted Average
 
Options
 
Exercise Price
Options
 
Exercise Price
Outstanding, beginning of period
125,000,000
$
0.03
62,800,000
$
0.04
Granted
3,800,000
 
0.04
84,700,000
 
0.03
Exercised
(1,000,000)
 
0.03
(22,500,000)
 
(0.05)
Expired
-
$
-
-
$
-
 
           
Outstanding, end of period
127,800,000
$
0.04
125,000,000
$
0.03
 
           
Exercisable, end of period
126,387,500
$
0.04
125,000,000
$
0.03

The options outstanding at March 31, 2013 and December 31, 2012 were as follows:

   
March 31, 2013
 
December 31, 2012
   
Expiry Date
 
Options
 
Exercise
Price
 
Intrinsic
Value
 
Options
 
Exercise
Price
 
Intrinsic
Value
 
                       
March 7, 2015
 
20,000,000
$
0.05
 
-
 
20,000,000
$
0.05
$
-
March 31, 2015
 
1,200,000
$
0.25
 
-
 
1,200,000
 
0.25
 
-
March 6, 2016
 
35,750,000
$
0.05
 
-
 
35,750,000
 
0.05
 
-
May 4, 2016
 
1,000,000
$
0.05
 
-
 
1,000,000
 
0.05
 
-
May 23, 2016
 
100,000
$
0.05
 
-
 
100,000
 
0.05
 
-
May 27, 2017
 
700,000
$
0.05
 
-
 
700,000
 
0.05
 
-
May 31, 2017
 
500,000
$
0.05
 
-
 
500,000
 
0.05
 
-
August 16, 2017
 
500,000
$
0.05
 
-
 
500,000
 
0.05
 
-
December 28, 2017
 
14,250,000
$
0.05
 
-
 
14,250,000
 
0.05
 
-
December 28, 2017
 
51,000,000
$
0.03
 
-
 
51,000,000
 
0.03
 
-
January 28, 2018
 
2,300,000
$
0.05
 
-
 
-
 
-
 
-
March 26, 2018
 
500,000
$
0.03
 
-
 
-
 
-
 
-
Total
 
127,800,000
$
0.04
 
-
 
125,000,000
$
0.03
   
Weighted Average Remaining
Contractual Life
 
3.76
         
3.98
       

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value for in-the-money options, based on the $0.03 (December 31, 2012: $0.03) closing stock price of the Company’s common stock on the NASDAQ over-the-counter market (OTC) on March 31, 2013. As of March 31, 2013, Nil (December 31, 2012: Nil) of the stock options outstanding were in-the-money.

The Company uses the fair value method for determining stock-based compensation for all options granted during the fiscal periods. The fair value was determined using the Black-Scholes Option Pricing Model based on the following weighted average assumptions:

 
March 31, 2013
(unaudited)
 
December 31, 2012
 
 
     
Risk-free interest rate
2.52%
 
1.76%
Expected life
5 years
 
5 years
Expected dividends
0%
 
0%
Expected volatility
305%
 
252%
Forfeiture rate
0%
 
0%

The weighted average fair value for the options granted during the three months ended March 31, 2013 was $0.04 (2012: $Nil).

The compensation cost of the stock options granted was allocated as follows:

   
Three months ended
March 31, 2013
(unaudited)
 
Three months ended
March 31, 2012
(unaudited)
Interest expense:
       
 
Unrelated parties
$
-
$
231,948
 
Related parties
 
-
 
-
Selling, general and administration
       
Unrelated parties
 
51,967
 
-
Professional fees
       
Unrelated parties
 
11,992
 
-
Product development
       
Unrelated parties
 
1,499
 
-
 
$
65,458
$
-