STOCKHOLDERS' EQUITY	12 Months Ended
Dec. 31, 2012
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	NOTE 3. STOCKHOLDERS' EQUITY Preferred Stock The Company has provided for the issuance of 250,000 shares, par value $1,000 per share, of convertible Preferred Series B stock ("Series B"). Each Series B share is convertible into 166.667 shares of the Company's common stock upon election by the stockholder, with dates and terms set by the Board. No shares of Series B preferred stock are outstanding. Common Stock The Company has 250,000,000 authorized shares of common stock, par value $.001, with 69,560,030 shares issued and outstanding as of December 31, 2012. Stock based Compensation During 2011, the Company recognized $41,100 in professional fees expense related to stock issued to unrelated parties for business development services performed. During 2012, the Company recognized $42,600 in professional fees expense related to stock issued to unrelated parties for business development services performed. Non-employee Stock Options and Warrants The Company accounts for non-employee stock options under FASB ASC Topic 505 "EQUITY-BASED PAYMENTS TO NON-EMPLOYEES", whereby options costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. During 2012 and 2011, no options were issued, exercised or cancelled. The Company currently has outstanding warrants expiring December 31, 2014 to purchase an aggregate of 6,000,000 shares of common stock; these warrants consist of warrants to purchase 2,000,000 shares at an exercise price of $.025 per share, and warrants to purchase 4,000,000 shares at an exercise price of $0.02 per share. In July 2009, the Company issued additional warrants expiring June 30, 2014 to purchase an aggregate of 500,000 shares of common stock at an exercise price of $0.125 per share. From June 2010 thru April 2011, the Company issued additional warrants expiring June 30, 2015 to purchase an aggregate of 420,000 shares of common stock at an exercise price of $0.125 per share. On December 31, 2012, the Company had the following outstanding warrants: Weighted Remaining Average Exercise Number of Contractual Life Exercise Price times Exercise Price Shares (in years) Number of Shares Price ----- ------ ---------- ---------------- ----- $0.025 2,000,000 2 $ 50,000 $0.020 4,000,000 2 80,000 $0.125 500,000 1.5 62,500 $0.125 420,000 2.5 52,500 --------- -------- 6,920,000 $245,000 $0.035 ========= ======== Remaining Number of Weighted Average Contractual Life Warrants Shares Exercise Price (in years) -------- ------ -------------- ---------- Outstanding at January 1, 2011 6,500,000 $0.035 --------- ------ Issued 420,000 -- Exercised -- -- Expired/Cancelled -- -- --------- ------ Outstanding at January 1, 2012 6,920,000 $0.035 --------- ------ Issued -- -- Exercised -- -- Expired/Cancelled -- -- --------- ------ Outstanding at December 31, 2012 6,920,000 $0.035 2.0 --------- ------ ------ Exercisable at December 31, 2012 6,920,000 $0.035 2.0 ========= ====== ====== Employee Stock Options The Company accounts for employee stock options under FASB ASC Topic 718 "COMPENSATION-STOCK COMPENSATION". The Company issued no employee stock options and had none outstanding as of the close of the year ended December 31, 2012 and 2011.

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2012

NOTE 3. STOCKHOLDERS' EQUITY

Preferred Stock

The Company has provided for the  issuance of 250,000  shares,  par value $1,000

per share, of convertible  Preferred  Series B stock ("Series B"). Each Series B

share is  convertible  into 166.667  shares of the  Company's  common stock upon

election by the stockholder, with dates and terms set by the Board. No shares of

Series B preferred stock are outstanding.

Common Stock

The Company has 250,000,000  authorized shares of common stock, par value $.001,

with 69,560,030 shares issued and outstanding as of December 31, 2012.

Stock based Compensation

During 2011, the Company recognized $41,100 in professional fees expense related

to  stock  issued  to  unrelated  parties  for  business   development  services

performed.

During 2012, the Company recognized $42,600 in professional fees expense related

to  stock  issued  to  unrelated  parties  for  business   development  services

performed.

Non-employee Stock Options and Warrants

The Company  accounts for  non-employee  stock  options under FASB ASC Topic 505

"EQUITY-BASED  PAYMENTS TO  NON-EMPLOYEES",  whereby  options costs are recorded

based on the fair value of the  consideration  received or the fair value of the

equity instruments issued,  whichever is more reliably  measurable.  During 2012

and 2011, no options were issued, exercised or cancelled.

The Company  currently has outstanding  warrants  expiring  December 31, 2014 to

purchase an  aggregate  of  6,000,000  shares of common  stock;  these  warrants

consist of warrants to purchase  2,000,000  shares at an exercise price of $.025

per share,  and warrants to purchase  4,000,000  shares at an exercise  price of

$0.02 per share. In July 2009, the Company issued  additional  warrants expiring

June 30, 2014 to purchase an aggregate  of 500,000  shares of common stock at an

exercise price of $0.125 per share.  From June 2010 thru April 2011, the Company

issued  additional  warrants  expiring June 30, 2015 to purchase an aggregate of

420,000 shares of common stock at an exercise price of $0.125 per share.

On December 31, 2012, the Company had the following outstanding warrants:

                                                                        Weighted

                                 Remaining                               Average

Exercise         Number of    Contractual Life   Exercise Price times   Exercise

 Price            Shares        (in years)         Number of Shares       Price

 -----            ------        ----------         ----------------       -----

$0.025          2,000,000          2                   $ 50,000

$0.020          4,000,000          2                     80,000

$0.125            500,000          1.5                   62,500

$0.125            420,000          2.5                   52,500

                ---------                              --------

                6,920,000                              $245,000           $0.035

                =========                              ========

                                                                   Remaining

                                   Number of  Weighted Average  Contractual Life

        Warrants                    Shares     Exercise Price      (in years)

        --------                    ------     --------------      ----------

Outstanding at January 1, 2011     6,500,000       $0.035

                                   ---------       ------

Issued                               420,000           --

Exercised                                 --           --

Expired/Cancelled                         --           --

                                   ---------       ------

Outstanding at January 1, 2012     6,920,000       $0.035

                                   ---------       ------

Issued                                    --           --

Exercised                                 --           --

Expired/Cancelled                         --           --

                                   ---------       ------

Outstanding at December 31, 2012   6,920,000       $0.035              2.0

                                   ---------       ------           ------

Exercisable at December 31, 2012   6,920,000       $0.035              2.0

                                   =========       ======           ======

Employee Stock Options

The  Company  accounts  for  employee  stock  options  under  FASB ASC Topic 718

"COMPENSATION-STOCK  COMPENSATION". The Company issued no employee stock options

and had none outstanding as of the close of the year ended December 31, 2012 and

2011.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

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+ Details

CHANCELLOR GROUP INC. 10-K