6. COMMON STOCK

6 Months Ended

Jun. 30, 2015

Equity [Abstract]

COMMON STOCK

At June 30, 2015, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had outstanding 41,925,765 shares of common stock, and no shares of preferred stock.

2015 Transactions: During the six months ended June 30, 2015, the Company issued shares of common stock as follows:

· 31,659 shares of common stock for services valued at $0.23 per share.

· 25,000 shares of common stock for prior services which had previously been recorded as accrued liability for $5,384 or $0.24 per share.

· 200,000 shares of common stock for prior services which had previously been recorded as accrued liability for $65,211 or $0.18 per share.

· 5,000,000 shares of common stock issued related to a previously recorded stock payable for $680,000 or $0.14 per share.

2014 Transactions: During the six months ended June 30, 2014, the Company issued shares of common stock as follows:

· 100,000 shares of common stock for an employee contract bonus valued at $0.15 per share.

Common Stock Repurchase Program

On October 29, 2014, the Company’s board of directors approved a share repurchase program that enables the Company to purchase shares of common stock. Under this program, the Company is authorized, but not obligated to repurchase, through open market purchases or privately negotiated transactions up to two million seven hundred thousand (2,700,000) of its shares of common stock, depending on market conditions, share price and other factors, subject to relevant rules and regulations under U.S. securities law. No shares were repurchased during the three and six months ended June 30, 2015, under this program. The Company acquired 2,442,000 shares through this program in 2014, and remains eligible to purchase 258,000 shares. The share repurchase program will expire on October 29, 2015.

Stock and Warrant Grants:

In March 2015 the Company granted 200,000 shares of common stock along with 200,000 warrants to a consultant. The shares were valued at $30,600 or $0.16 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The warrants were valued at $34,611, using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $0.18 per share; exercise price of $0.25, 3 year life; discount rate of 2.00%; and volatility rate of 245%. The 200,000 shares and 200,000 warrants granted have a vesting period of six months of which four months has vested as of June 30, 2015. The approximate value vested during the three and six months ended June 30, 2015 was $32,600 and $37,200. A payable has been recorded for the vested amounts as of June 30, 2015. As of June 30, 2015, none of the 200,000 shares or 200,000 warrants granted have been issued.

In August 2014 the Company granted 150,000 shares of common stock to a consultant with a total value of $25,500 or $0.17 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 150,000 shares granted have a vesting period of three years of which eleven months have vested as of June 30, 2015. The approximate value vested for the three and six months ended June 30, 2015 was $2,100 and $4,200. For the year ended December 31, 2014 $3,500 was vested, and as a result the total amount vested as of June 30, 2015 was $7,700. A payable has been recorded for the vested amounts as of June 30, 2015. As of June 30, 2015, none of the 150,000 shares granted have been issued.

In September 2014 the Company granted 150,000 shares of common stock along with 150,000 Class A warrants and 150,000 Class B warrants to an advisory board member. The shares were valued at $19,250 or $0.13 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity. The warrants were valued at $42,761, using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $0.15 per share; exercise price of $0.25 for the Class A warrants and $0.50 for the Class B warrants, 3 year life; discount rate of 2.00%; and volatility rate of 245%. The 150,000 shares and 300,000 warrants granted vest over a 3 year period, at 50,000 shares and 100,000 warrants per year of which ten months have vested as of June 30, 2015. The approximate value vested for the three and six months ended June 30, 2015 was $4,900 and $10,000, and for the year ended December 31, 2014 $6,400 vested, for a total of $11,500 as of June 30, 2015. A payable has been recorded for the vested amounts as of June 30, 2015. As of June 30, 2015, none of the 150,000 shares or 300,000 warrants granted have been issued.

In September 2014 the Company granted 200,000 shares of common stock along with 200,000 warrants to a consultant. The shares were valued at $30,600 or $0.16 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The warrants were valued at $34,611, using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $0.18 per share; exercise price of $0.25, 3 year life; discount rate of 2.00 %; and volatility rate of 245%. The 150,000 shares and 200,000 warrants granted have a vesting period of six months. The approximate value vested for the year ended December 31, 2014 was $37,000, and the remainder vested in the six months ended June 30, 2015. During the six months ended June 30, 2015 the company issued the 200,000 shares and warrant for 200,000 shares of common stock.

On October 17, 2014 the Company granted 150,000 shares of common stock to an advisory board member with a total value of $32,400 or $0.21 per share (including a 10% discount of fair market value due to these shares being restricted and lacking market liquidity). The 150,000 shares granted vest over a 3 year period, at 50,000 shares per year of which nine months have vested as of June 30, 2015. The approximate value vested for the three and six months ended June 30, 2015 was $2,100 and $4,300. A payable has been recorded for the vested amounts as of June 30, 2015. As of June 30, 2015, 12,500 of the shares previously vested have been issued, the remaining 137,500 shares granted have not been issued.

In October 2013, the Company granted 300,000 shares of common stock to an employee of the Company with a total value of $38,250 or $0.15 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 300,000 shares granted have a vesting period of three years of which twenty months have vested as of June 30, 2015. The approximate value vested for the three and six months ended June 30, 2015 was $3,200 and $6,000, and for years ended December 31, 2014 and 2013 was $12,700 and $2,600, for a total of $21,600. A payable has been recorded for the vested amounts as of June 30, 2015. As of June 30, 2015, none of the 300,000 shares granted have been issued.

In August 2012, the Company granted a total of 5,000,000 shares of common stock to various officers and directors of the Company with a total value of $680,000 or $0.14 per share (including a 15% discount of fair market value due to these shares being restricted and lacking market liquidity). The 5,000,000 shares granted had a vesting period of five years of which all have been fully vested as of December 31, 2014. The approximate value vested for the year ended December 31, 2014 was $680,000. A payable has been recorded for the vested amounts as of December 31, 2014. During the six month ended June 30, 2015, the Company issued the 5,000,000 shares of common stock.