Quarterly report pursuant to Section 13 or 15(d)

Share-based Payments

v2.4.0.8
Share-based Payments
9 Months Ended
Sep. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-based Payments
Note 9 - Share-based Payments
 
(a)
Stock Warrants
The Company has issued warrants to various employees, consultants and members of the Board of Directors of the Company for their services either in connection with the Company’s ongoing efforts to raise capital or the development of the Company’s products. In addition, the Company has granted warrants to lenders in connection with the issuance of debt. Each warrant granted may be exchanged for a prescribed number of shares of common stock. The warrants expire March 18, 2015.
 
 
 
2014
 
2013
 
 
 
 
 
 
Weighted
 
 
 
 
Weighted
 
 
 
 
 
 
Average
 
 
 
 
Average
 
 
 
Warrants
 
Exercise Price
 
Warrants
 
Exercise Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
 
1,989
 
$
71.76
 
 
47,211
 
$
48.54
 
Cancelled during period
 
 
-
 
 
-
 
 
-
 
 
-
 
Expired during period
 
 
-
 
 
-
 
 
-
 
 
-
 
Outstanding at September 30
 
 
1,989
 
$
71.76
 
 
47,211
 
$
48.54
 
 
On January 23, 2014, upon effectiveness of the registration statement filed with the SEC, the Company adopted the 2013 Stock Incentive Plan (the “Plan”) which will provide for the issuance of up to 400,000 shares. The purpose of the Plan is to provide additional incentive to those officers, employees, consultants and non-employee directors of the Company and its parents, subsidiaries and affiliates whose contributions are essential to the growth and success of the Company’s business.
 
The 2013 Plan may be administered by the board or a board-appointed committee. Eligible recipients of option awards are employees, officers, consultants or directors (including non-employee directors) of the Company or of any parent, subsidiary or affiliate of the Company. The board has the authority to grant to any eligible recipient any options, restricted stock or other awards valued in whole or in part by reference to, or otherwise based on, our common stock.
 
(b)
Stock options
Qualified option holders may exercise their options at their discretion. Each option granted may be exchanged for a prescribed number of shares of common stock.
 
Employee's Plan
 
2014
 
2013
 
 
 
 
 
 
Weighted
 
 
 
 
Weighted
 
 
 
 
 
 
Average
 
 
 
 
Average
 
 
 
Options
 
Exercise Price
 
Options
 
Exercise Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
 
-
 
$
-
 
 
1,579
 
$
42.12
 
Forfeited during period
 
 
-
 
 
-
 
 
-
 
 
-
 
Expired during period
 
 
-
 
 
-
 
 
(1,579)
 
 
42.12
 
Outstanding at September 30
 
 
-
 
$
-
 
 
-
 
$
-
 
 
Director's Plan
 
2014
 
2013
 
 
 
 
 
Weighted
 
 
 
Weighted
 
 
 
 
 
Average
 
 
 
Average
 
 
 
Options
 
Exercise Price
 
Options
 
Exercise Price
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
-
 
$
-
 
352
 
$
312.00
 
Cancelled during period
 
-
 
 
-
 
-
 
 
-
 
Expired during period
 
-
 
 
-
 
-
 
 
-
 
Outstanding at September 30
 
-
 
$
-
 
352
 
$
312.00
 
 
2013 Incentive Stock &
 
2014
 
2013
 
Award Plan
 
 
 
 
Weighted
 
 
 
 
Weighted
 
 
 
 
 
 
Average
 
 
 
 
Average
 
 
 
Options
 
Exercise Price
 
Options
 
Exercise Price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1
 
 
-
 
$
-
 
 
-
 
$
-
 
Granted during period
 
 
175,000
 
 
4.98
 
 
-
 
 
-
 
Cancelled during period
 
 
-
 
 
-
 
 
-
 
 
-
 
Expired during period
 
 
-
 
 
-
 
 
-
 
 
-
 
Outstanding at September 30
 
 
175,000
 
$
4.98
 
 
-
 
$
-
 
  
On June 10, 2014 the Company approved issuance of 115,000 options to purchase common shares to Directors and Officers at an exercise price of $5.50 per common share and 60,000 options to purchase common shares to key employees at an exercise price of $3.98 per common share. These options were issued under the 2013 Incentive Stock and Award Plan, in which an aggregate of up to 400,000 shares of the Company’s common shares are reserved for issuance. All options are immediately exercisable and carry a five year expiration.
 
The calculated fair value of these options was distributed to the following categories on the Statement of Operations:
 
 
 
Fair
 
Expense Category
 
Value
 
Cost of Goods
 
$
24,040
 
General & Administrative
 
 
357,276
 
Sales & Marketing
 
 
48,081
 
Research & Development
 
 
120,203
 
 
 
$
549,600
 
  
The options and warrants issued under the above four plans were valued using a Black Scholes option pricing model. The assumptions utilized in calculating the value of the issued options under Black Scholes are as follows:
 
 
 
2014
 
Expected option term
 
5 yrs
 
Expected volatility
 
127.32%
 
Expected divident yeild
 
0.00%
 
Risk free interest rate
 
1.71%
 
 
A summary of warrants and stock options outstanding and exercisable as of September 30, 2014 follows:
 
 
 
 
 
 
 
 
 
 
 
Outstanding
 
Exercisable
 
 
 
 
 
 
 
 
 
 
 
 
Wgtd Avg
 
Wgtd Avg
 
 
 
 
Wtgt Avg
 
 
 
 
 
 
 
 
 
 
 
 
Life
 
Exercise
 
 
 
 
Exercise
 
 
 
Low
 
High
 
Shares
 
Remaining
 
Price
 
Shares
 
Price
 
2013 Stock Incentive Plan
 
$
3.98
 
$
5.50
 
 
175,000
 
 
4.75
 
$
4.98
 
 
175,000
 
$
4.98
 
Warrants
 
 
71.76
 
 
71.76
 
 
1,989
 
 
0.46
 
 
71.76
 
 
1,989
 
 
71.76