|12 Months Ended|
Dec. 31, 2014
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
NOTE 15 STOCK OPTIONS
Stock based compensation
During the twelve months ended December 31, 2014, the Company issued options to employees and outside consultants, which allowed the employees and outside consultants to purchase an aggregate of 16,100,000 shares of the common stock exercisable at prices ranging from $0.05 to $0.25 per share. The options vested immediately and have a term of three years. These options have a fair value of approximately $5,000,000, which was calculated using the Black-Scholes option pricing model, and has been included as a separate line item in the accompanying consolidated statement of operations for the twelve months ended December 31, 2014.
During the twelve months ended December 31, 2014, three option holders exercised their options to purchase 448,993 shares of the Companys common stock in a non-cash transaction and received approximately 448,993 shares of the Companys common stock.
During the twelve months ended 2013, the Company issued 4,820,000 options to purchase common stock to various employees for services rendered. These options were granted with an exercise price of $0.05, have a contract term of three years and vested immediately. The options have a fair value of $238,761, which was calculated using the Black-Scholes option pricing model, and has been shown as a separate line item in the accompanying consolidated statement of operations for the twelve months ended December 31, 2013.
Stock option activity is presented in the table below:
The Company recognized stock compensation expense as follows:
The total remainder of stock compensation expense to be recognized through the vesting period of the above options, at December 31, 2014, was approximately $385,000.
The fair value of the options granted during the various periods was estimated at the date of grant using the Black-Scholes option-pricing model and the following assumptions:
The total number of options vested as of December 31, 2014 was 22,684,292 and the total options expected to vest, as of December 31, 2014, was 25,761,647.
Stock Incentive Plan
On November 11, 2014, the Company adopted the 2014 Stock Incentive Plan. The plan provides for Options, Stock Appreciation Rights, Dividend Equivalent Rights Restricted Stock, Restricted Stock Units or other rights or benefits under the Plan. The maximum aggregate number of Shares which may be issued pursuant to all Awards (including Incentive Stock Options) is five million (5,000,000) Shares. The Shares may be authorized, but unissued, or reacquired Common Stock. In addition, Dividend Equivalent Rights shall be payable solely in cash and therefore the issuance of Dividend Equivalent Rights shall not be deemed to reduce the maximum aggregate number of Shares which may be issued under the Plan. The plan has a term of ten years.
Under the terms of this plan, shares vest as follows: 25% of the shares subject to the Option shall vest twelve (12) months after the Vesting Commencement Date, and 1/48 of the Shares subject to the Option shall vest on each monthly anniversary of the Vesting Commencement Date thereafter. From November 11, 2014 to December 31, 2014, a minor number of shares vested.
Stock option under the Incentive Stock Option Plan activity is presented in the table below:
None of the above options were exercised or forfeited in 2014.
Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.
Reference 1: http://www.xbrl.org/2003/role/presentationRef