Stockholders' Equity (Deficiency) | 12 Months Ended |
Dec. 31, 2014 |
Stockholders' Equity (Deficiency) [Abstract] | |
Stockholders' Equity (Deficiency) | 12 | Stockholders’ Equity (Deficiency) | | | | | | | | | | | | | | | | | | | | | | | | | |
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Common Stock |
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For the year ended December 31, 2013, the Company sold an aggregate of 74,388,766 shares of its common stock for an aggregate purchase price of $2,827,700 (weighted average per share price of $0.038). Included in these amounts were 8,333,334 shares of the Company’s common stock that were sold to E. Wayne Kinsey, III, a member of the Company’s board of directors, in a private placement for an aggregate purchase price of $250,000, or $0.03 per share, which was the same price that the Company sold shares of its common stock to other non-affiliated investors in the private placement. The Company paid an aggregate of $64,095 of offering costs in cash and issued 1,649,874 shares of common stock to non-affiliated third parties as payment of $109,100 of offering costs related to these sales of common stock. |
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For the year ended December 31, 2013, the Company issued an aggregate of 1,000,000 shares of common stock to non-affiliated third parties as payment for investor relations services. The total expense associated with these issuances was $43,550, representing the fair value of the shares of common stock on the dates of issuance (weighted average per share price of $0.044). |
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For the year ended December 31, 2013, the Company issued an aggregate of 1,713,839 shares of common stock as payment of $70,250 of accounts payable due certain members of the Company’s board of directors for board-related services rendered to the Company. The common stock was issued at per share prices equal to the Company’s quoted market price on the dates the issuances were either authorized by the Company’s board of directors (weighted average per share price of $0.041). |
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For the year ended December 31, 2014, the Company sold an aggregate of 20,973,693 shares of its common stock for an aggregate purchase price of $1,093,690 (weighted average per share price of $0.052). The Company paid an aggregate of $47,694 of offering costs in cash and issued 758,711 shares of common stock to non-affiliated third parties as payment of $44,252 of offering costs related to these sales of common stock. |
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For the year ended December 31, 2014, the Company issued 250,000 shares of common stock to a non-affiliated third party as payment for marketing services. The total expense associated with this issuance was $20,000, representing the fair value of the shares of common stock on the date of issuance (per share price of $0.08). |
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For the year ended December 31, 2014, the Company issued an aggregate of 786,628 shares of common stock as payment of $32,250 of accounts payable due certain members of the Company’s board of directors for board-related services rendered to the Company and $20,875 of accounts payable due non-affiliated third parties for investor relations services. The common stock was issued at per share prices equal to the Company’s quoted market price on the dates the issuances were either authorized by the Company’s board of directors or occurred (weighted average per share price of $0.068). |
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Stock Options |
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The Company currently has two stock option/stock compensation plans in place: the 2010 Stock Incentive Plan and the 2012 Equity Incentive Plan (collectively, the “Equity Incentive Plans”). |
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The 2010 Stock Incentive Plan was approved by the stockholders in September 2010. The Company had reserved for issuance an aggregate of 10,000,000 shares of common stock under the 2010 Stock Incentive Plan. As of December 31, 2014, stock options to purchase 3,846,920 shares of the Company’s common stock were outstanding under the 2010 Stock Incentive Plan and 90,500 shares of the Company’s common stock had been issued under the 2010 Stock Incentive Plan. As a result of the adoption of the Company’s 2012 Equity Incentive Plan, no further awards are permitted under the 2010 Stock Incentive Plan. |
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The 2012 Equity Incentive Plan was approved by the stockholders in May 2012. The 2012 Equity Incentive Plan is designed to encourage and enable employees and directors of the Company to acquire or increase their holdings of common stock and other proprietary interests in the Company. The 2012 Equity Incentive Plan is intended to promote these individuals’ interests in the Company, thereby enhancing the efficiency, soundness, profitability, growth and stockholder value of the Company. The 2012 Equity Incentive Plan provides for grants and/or awards in the form of incentive and non-qualified stock option grants, stock appreciation rights, restricted stock awards, performance share awards, phantom stock awards and dividend equivalent awards. |
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The original aggregate number of shares of common stock which could be awarded under the 2012 Equity Incentive Plan was 14,000,000 shares, subject to adjustment as provided in the 2012 Equity Incentive Plan. As of December 31, 2014, options to purchase 1,000,000 shares of the Company’s common stock were outstanding under the 2012 Equity Incentive Plan and up to 13,000,000 shares of the Company’s common stock remain available for awards under the 2012 Equity Incentive Plan. Effective February 25, 2015, as permitted under the 2012 Equity Incentive Plan, the Company’s board of directors increased the number of shares of common stock that could be awarded under the 2012 Equity Incentive Plan to 37,950,000 shares. |
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Common stock grants and stock option awards under the Equity Incentive Plans were granted or issued at prices as determined by the Company’s compensation committee, but such prices were not less than the fair market value of the Company's common stock on the date of grant or issuance. Stock options granted and outstanding to date consist of both incentive stock options and non-qualified stock options. |
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A summary of stock option transactions under the Equity Incentive Plans during the years ended December 31, 2014 and 2013 is set forth below: |
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| | Stock | | | Weighted Average Exercise Price Per Common Share | | | Aggregate Intrinsic Value | | | | | | | | | | | | | | | |
Option Shares | | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | | | 5,813,587 | | | $ | 0.18 | | | $ | -- | | | | | | | | | | | | | | | |
Granted during the period | | | -- | | | | -- | | | | | | | | | | | | | | | | | | | |
Exercised during the period | | | -- | | | | -- | | | | | | | | | | | | | | | | | | | |
Terminated during the period | | | (833,333 | ) | | $ | 0.2 | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 4,980,254 | | | $ | 0.18 | | | $ | 55,605 | | | | | | | | | | | | | | | |
Granted during the period | | | 1,000,000 | | | | 0.09 | | | | | | | | | | | | | | | | | | | |
Exercised during the period | | | -- | | | | -- | | | | | | | | | | | | | | | | | | | |
Terminated during the period | | | (1,133,334 | ) | | $ | 0.24 | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | | | 4,846,920 | | | $ | 0.15 | | | $ | -- | | | | | | | | | | | | | | | |
Exercisable at December 31, 2014 | | | 3,846,920 | | | $ | 0.16 | | | $ | -- | | | | | | | | | | | | | | | |
Exercisable at December 31, 2013 | | | 3,313,586 | | | $ | 0.12 | | | $ | 42,136 | | | | | | | | | | | | | | | |
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The fair value of stock options granted during the year ended December 31, 2014 was $57,035 and was calculated using the Black-Scholes pricing model with the following weighted average assumptions: |
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Exercise price | | $ | 0.09 | | | | | | | | | | | | | | | | | | | | | | | |
Grant date stock price | | $ | 0.09 | | | | | | | | | | | | | | | | | | | | | | | |
Expected volatility | | | 139 | % | | | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rates | | | 2.39 | % | | | | | | | | | | | | | | | | | | | | | | |
Risk of forfeiture | | | 35 | % | | | | | | | | | | | | | | | | | | | | | | |
Expected life (in years) | | | 10 | | | | | | | | | | | | | | | | | | | | | | | |
Dividend yield | | | 0 | % | | | | | | | | | | | | | | | | | | | | | | |
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The risk-free interest rate is based on a treasury instrument, the term of which is consistent with the expected life of the stock options at the date of grant. In projecting expected stock price volatility, the Company used historical stock price volatility of its common stock which the Company believes is representative of future volatility. The Company estimated the expected life of stock options based on historical experience using employee exercise and option expiration data. |
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Information with respect to outstanding stock options and stock options exercisable as of December 31, 2014 that were granted to employees, directors and service providers is as follows: |
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| | | Stock Options Outstanding | | | Stock Options Exercisable | |
Exercise | | | Number of Shares Available Under Outstanding Stock | | | Weighted Average Exercise Price Per Common Share | | | Weighted Average Remaining Contractual Life (Years) | | | Number of Shares Available for Purchase Under Outstanding Stock | | | Weighted Average Exercise Price Per Common Share | | | Weighted Average Remaining Contractual Life (Years) | |
Price | Options | Options |
$ | 0.09 | | | | 1,000,000 | | | $ | 0.09 | | | | 9.7 | | | | -- | | | $ | 0.09 | | | | -- | |
$ | 0.1 | | | | 2,180,253 | | | $ | 0.1 | | | | 4.2 | | | | 2,180,253 | | | $ | 0.1 | | | | 4.2 | |
$ | 0.2 | | | | 833,333 | | | $ | 0.2 | | | | 7.3 | | | | 833,333 | | | $ | 0.2 | | | | 7.3 | |
$ | 0.3 | | | | 833,334 | | | $ | 0.3 | | | | 7.3 | | | | 833,334 | | | $ | 0.3 | | | | 7.3 | |
| | | | | 4,846,920 | | | $ | 0.15 | | | | 4.4 | | | | 3,846,920 | | | $ | 0.16 | | | | 5.5 | |
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A summary of the non-vested shares subject to options granted under the Equity Incentive Plans as of December 31, 2014 and 2013 is as follows: |
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| | Stock | | | Weighted Average Grant Date Fair Value | | | | | | | | | | | | | | | | | | | |
Option Shares | Per Share | | | | | | | | | | | | | | | | | | |
Non-vested at December 31, 2012 | | | 4,006,794 | | | $ | 0.05 | | | | | | | | | | | | | | | | | | | |
Granted during the period | | | -- | | | | -- | | | | | | | | | | | | | | | | | | | |
Vested during the period | | | (1,506,793 | ) | | $ | 0.05 | | | | | | | | | | | | | | | | | | | |
Terminated during the period | | | (833,333 | ) | | $ | 0.05 | | | | | | | | | | | | | | | | | | | |
Non-vested at December 31, 2013 | | | 1,666,668 | | | $ | 0.05 | | | | | | | | | | | | | | | | | | | |
Granted during the period | | | 1,000,000 | | | $ | 0.09 | | | | | | | | | | | | | | | | | | | |
Vested during the period | | | (833,334 | ) | | $ | 0.05 | | | | | | | | | | | | | | | | | | | |
Terminated during the period | | | (833,334 | ) | | $ | 0.05 | | | | | | | | | | | | | | | | | | | |
Non-vested at December 31, 2014 | | | 1,000,000 | | | $ | 0.09 | | | | | | | | | | | | | | | | | | | |
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As of December 31, 2014, there was $51,762 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Equity Incentive Plans. That cost is expected to be recognized over a weighted average period of forty-four months. |
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Warrants to Purchase Common Stock |
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A summary of warrant transactions during the years ended December 31, 2014 and 2013 is as follows: |
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| | Warrant Shares | | | Weighted Average Exercise Price Per Common Share | | | Aggregate Intrinsic Value | | | | | | | | | | | | | | | |
Outstanding at December 31, 2012 | | | 45,852,998 | | | $ | 0.17 | | | $ | -- | | | | | | | | | | | | | | | |
Issued during the period | | | 1,151,567 | | | $ | 0.04 | | | | | | | | | | | | | | | | | | | |
Exercised during the period | | | -- | | | | -- | | | | | | | | | | | | | | | | | | | |
Terminated during the period | | | (10,160,000 | ) | | $ | 0.33 | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2013 | | | 36,844,565 | | | $ | 0.12 | | | $ | 95,584 | | | | | | | | | | | | | | | |
Issued during the period | | | 620,000 | | | $ | 0.06 | | | | | | | | | | | | | | | | | | | |
Exercised during the period | | | -- | | | | -- | | | | | | | | | | | | | | | | | | | |
Terminated during the period | | | (8,555,687 | ) | | $ | 0.16 | | | | | | | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | | | 28,908,878 | | | $ | 0.12 | | | $ | 42,006 | | | | | | | | | | | | | | | |
Exercisable at December 31, 2014 | | | 28,908,878 | | | $ | 0.12 | | | $ | 42,006 | | | | | | | | | | | | | | | |
Exercisable at December 31, 2013 | | | 36,844,565 | | | $ | 0.12 | | | $ | 95,584 | | | | | | | | | | | | | | | |
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Warrants issued by the Company contain exercise prices as determined by the Company’s board of directors, but such exercise prices were generally not less than the fair market value of the Company's common stock on the date of issuance. Warrants issued may vest over a period of up to three years and have a maximum term of ten years from the date of issuance. |
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The fair value of the warrants issued during the years ended December 31, 2014 and 2013 was $15,318 and $36,600, respectively, and was calculated using the Black-Scholes pricing model with the following weighted average assumptions: |
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| | Year Ended | | | | | | | | | | | | | | | | | | | |
| | December 31, | | | December 31, | | | | | | | | | | | | | | | | | | | |
2014 | 2013 | | | | | | | | | | | | | | | | | | |
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Exercise price | | | $0.06 - $0.08 | | | | $0.035 - $0.04 | | | | | | | | | | | | | | | | | | | |
Issue date stock price | | | $0.055 - $0.07 | | | | $0.035 - $0.095 | | | | | | | | | | | | | | | | | | | |
Expected volatility | | | 134% - 140% | | | | 123% - 141% | | | | | | | | | | | | | | | | | | | |
Risk-free interest rates | | | 0.47% - 0.49% | | | | 0.35% - 1.36% | | | | | | | | | | | | | | | | | | | |
Risk of forfeiture | | | 35 | % | | | 35 | % | | | | | | | | | | | | | | | | | | |
Expected life (in years) | | | 2.0 - 2.4 | | | | 3.0 - 5.0 | | | | | | | | | | | | | | | | | | | |
Dividend yield | | | 0 | % | | | 0 | % | | | | | | | | | | | | | | | | | | |
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The risk-free interest rate is based on a treasury instrument, the term of which is consistent with the expected life of the warrants. In projecting expected stock price volatility, the Company used historical stock price volatility of its common stock which the Company believes is representative of future volatility. The Company estimated the expected life of warrants based on historical experience using warrant exercise and warrant expiration data. |
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Information with respect to outstanding warrants and warrants exercisable at December 31, 2014 is as follows: |
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| | | Warrants Outstanding | | | Warrants Exercisable | |
Range of | | | Number of Shares Available Under Outstanding Warrants | | | Weighted Average Remaining Contractual Life (Years) | | | Weighted Average Exercise Price Per Common Share | | | Number of Shares Available for Purchase Under Outstanding Warrants | | | Weighted Average Exercise Price Per Common Share | | | Weighted Average Remaining Contractual Life (Years) | |
Exercise Prices |
$ | 0.03 - 0.04 | | | | 1,151,567 | | | | 2 | | | $ | 0.04 | | | | 1,151,567 | | | $ | 0.04 | | | | 2 | |
$ | 0.06 - 0.10 | | | | 20,176,061 | | | | 3.5 | | | $ | 0.09 | | | | 20,176,061 | | | $ | 0.09 | | | | 3.5 | |
$ | 0.2 | | | | 7,581,250 | | | | 0.5 | | | $ | 0.2 | | | | 7,581,250 | | | $ | 0.2 | | | | 0.5 | |
| | | | | 28,908,878 | | | | 2.7 | | | $ | 0.12 | | | | 28,908,878 | | | $ | 0.12 | | | | 2.7 | |
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As of December 31, 2014 and 2013, there were no non-vested shares subject to warrants and no unrecognized compensation cost related to warrants. |
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