Share-based Compensation

3 Months Ended

Mar. 31, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-based Compensation

Note 9 - Share-based Compensation

Options

At our Annual Meeting of Shareholders during the year ended December 31, 2013, our shareholders approved an amendment to our 2010 Stock Plan to increase the number of shares of common stock reserved thereunder by 2,000,000 shares. In addition, during the three months ended March 31, 2014 the board approved an additional 2,000,000 shares to be available for award under the 2010 Stock Plan, subject to shareholder approval, which brought the total available for award under the 2010 Stock Plan to 7,000,000 shares. The exercise price of an option is established by the Board of Directors on the date of grant and is generally equal to the market price of the stock on the grant date.  The Board of Directors may determine the vesting period for each new grant. Options issued are exercisable in whole or in part for a period as determined by the Board of Directors of up to ten years from the date of grant. 

During the three months ended March 31, 2015, we awarded options to purchase 3.3 million shares of our common stock at an exercise price of $0.30 to our leadership team. The right to exercise these options vests in 90 days of the award. We estimated the fair value of these options to be $690,129 with one-third charged to expense in our statement of operations during the period. The remaining two-thirds will be charged to expense the following quarter. We use the Black-Scholes option pricing model to estimate the fair values, with the following range of assumptions: (i) no dividend yield, (ii) expected volatility of 90%, (iii) risk-free interest rates of 1.5%, and (iv) expected lives of five years.

In addition to the options which vested on the date of award, we amortize certain options over vesting periods which included the three months ended March 31, 2015. We charged to operating expenses $22,512 during the three months ended March 31, 2015.

The following table summarizes our stock option activity for the three months ended March 31, 2015:

			Weighted-
	Number		Average
	of Shares		Exercise
	Issuable		Price
Balance, January 1, 2015		4,128,128	$	1.04
Granted		3,300,000		0.30
Exercised		-		-
Cancelled		(128,128)		1.01
Balance, March 31, 2015		7,300,000	$	0.70

The following table summarizes options outstanding at March 31, 2015:

					Weighted-
			Weighted-		Average
	Number		Average		Remaining		Aggregate
	of Shares		Exercise		Term		Intrinsic
	Issuable		Price		(Years)		Value
Exercisable		3,310,000	$	1.03		2.4	$	-
Not vested		3,990,000		0.43		4.7		33,000
Balance, March 31, 2015		7,300,000	$	0.70		3.6	$	33,000

Warrants

From time to time, we compensate consultants, advisors and investors with warrants to purchase shares of our common stock, in lieu of cash payments. Net share settlement is available to warrant holders.

The following table sets forth our warrant activity during the three months ended March 31, 2015:

			Weighted-
	Number		Average
	of Shares		Exercise
	Issuable		Price
Balance, January 1, 2015		1,166,146	$	1.13
Granted		-		-
Exercised		-		-
Expired		(76,808)		0.70
Balance, March 31, 2015		1,089,338	$	1.16

The following table sets forth the warrants outstanding at March 31, 2015:

			Weighted-
	Number		Average
	of Shares		Exercise
	Issuable		Price
10% convertible debenture - bonus warrants		33,334	$	0.60
10% convertible preferred stock – warrants		580,000		1.00
Consultants		476,004		1.39
Total		1,089,338	$	1.16