NOTE 10  STOCK OPTIONS

9 Months Ended 

Sep. 30, 2014


Disclosure Text Block Supplement [Abstract]  
Shareholders' Equity and Sharebased Payments [Text Block] 
NOTE 10 – STOCK OPTIONS
In February 2014, the Company granted 1,500,000 incentive stock options with an exercise price of $0.15 per option to certain nonexecutive employees under the 2004 Stock Incentive Plan. Approximately 750,000 of the options vest immediately with the remaining 50% vesting ratably over a threeyear period. The Company estimated the fair value of each option using the Black Scholes optionpricing model with the following weightedaverage assumptions: expected dividend yield of 0.0%, riskfree interest rate of 0.71%, volatility at 353.95% and an expected life of 5 years. The Company estimates the forfeiture rate based on historical data. Based on an analysis of historical information, the Company has applied a forfeiture rate of 15%. As a result, the Company estimated the value of these options at $115,488.
In May 2014, the Company granted 600,000 incentive stock options with an exercise price of $0.15 per option to Mr. Alan H. Hardy (see Note 6) under the 2004 Stock Incentive Plan. The Company recognizes compensation cost on awards on a straightline basis over the vesting period, approximately five years. The Company estimated the fair value of each option using the Black Scholes optionpricing model with the following weightedaverage assumptions: expected dividend yield of 0.0%, riskfree interest rate of 1.68%, volatility at 328.76% and an expected life of 5 years. The Company estimates the forfeiture rate based on historical data. Based on an analysis of historical information, the Company has applied a forfeiture rate of 15%. As a result, the Company estimated the value of these options at $77,981.
In July 2014, the Company granted 300,000 incentive stock options with an exercise price of $0.15 per option to certain nonexecutive employees under the 2004 Stock Incentive Plan. Options vest immediately. The Company estimated the fair value of each option using the Black Scholes optionpricing model with the following weightedaverage assumptions: expected dividend yield of 0.0%, riskfree interest rate of 1.0%, volatility at 323.81% and an expected life of 5 years. As a result, the Company estimated the value of these options at $44,987.
For the three and nine months ended September 30, 2014, sharebased compensation was $56,092 and $119,161, as compared to $25,404 and $34,212 for the three and nine months ended September 30, 2013.
