STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2013 |
Equity [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
NOTE 4. STOCKHOLDERS' EQUITY |
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Common stock |
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The Company has 100,000,000 authorized shares of no par value Class A common stock (“Class A”) and 10,000,000 authorized shares of no par value convertible Class B common stock (“Class B”). Each Class B share is entitled to ten votes per share and is convertible into one Class A share anytime at the holder’s option, and automatically converts upon its issuance, sale, assignment, gift or transfer to a person or entity other than the person to whom such share was initially issued. Prior to August 31, 2012 there was no Class A or Class B common, only common stock. As pre-August 31, 2012 common and post-August 31, 2012 Class A common are essentially the same, no distinction has been made in these financial statements between them. All common share figures in these financial statements including stock options have been retroactively restated for a 5 for 1 forward stock split in April 2010 and a 1 for 12 reverse stock split in August 2012. |
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Preferred stock |
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The Company has 5,000,000 authorized shares of no par value preferred stock, to have such preferences as the Board of Directors may set from time to time, with no shares issued and outstanding. |
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Stock options |
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The Company accounts for employee and non-employee stock options under ASC 718, whereby option 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. |
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At September 30, 2013 and December 31, 2012 the Company had stock options outstanding as described below. |
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Non-employee stock options |
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In November 2010 the Company adopted an incentive stock option plan and granted 363,333 options, allowing the holder to purchase one share of common stock per option, exercisable at $.12 per share with the option term expiring in November 2020. The fair value of the 363,333 options granted in 2010 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 2.64%, dividend yield of 0%, expected life of ten years, volatility of 33%. Of the 363,333 options granted, 138,333 options vested immediately and are exercisable anytime at the holder’s discretion, 212,500 options vested partially at 25% in April 2011 (53,125 options) with the remaining 159,375 options vesting over the subsequent 48 months, and 12,500 options vested partially at 20% in April 2011 (2,500 options) with the remaining 10,000 options vesting over the subsequent 60 months. |
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At the beginning of 2012 the Company had 363,333 non-employee stock options outstanding, with 221,854 options exercisable and 141,479 remaining to vest. Of the 141,479 deferred options, 41,844 options vested in year ended December 2012 leaving a remainder to vest of 99,635 options at December 31, 2012. During 2012 in connection with the vested options $1,800 was accreted to expense from deferred compensation, leaving a December 31, 2012 balance in deferred compensation of $6,304. During 2012 no options were exercised, expired or were canceled, leaving a September 30, 2013 and December 31, 2012 outstanding balance of 363,333 non-employee stock options. |