XML 33 R12.htm IDEA: XBRL DOCUMENT v2.4.0.8
Stockholders' Equity
3 Months Ended
Mar. 31, 2014
Stockholders' Equity [Abstract]  
Stockholders' Equity
6.        Stockholders’ Equity
 
Service-Based Stock Options
 
Service-based options issued by the Company to various employees and consultants amounted to 9,885,000 at December 31, 2013 and March 31, 2014.  In January 2014 the Company issued 100,000 shares of restricted common stock, valued at $28,000 to a consultant..
 
Stock based compensation expense amounted to $0 and $27,000 for the three months ended March 31, 2014 and 2013, respectively.  Such amounts are included in compensation and related expenses in the accompanying statement of operations.
 
Options exercisable at March 31, 2014 amounted to 9,835,000.  All outstanding options have a cashless exercise provision, and certain options provide for accelerated vesting provisions and modifications, as defined, if the Company is sold or acquired.  The intrinsic value of options outstanding and exercisable at March 31, 2014 amounted to $350,500.
 
The following is a summary of outstanding service-based options at March 31, 2014:
 
Exercise Price
   
Number of
Options
 
Weighted
Average
Remaining
Contractual
Life
           
$ 0.10     $ 1,000,000  
4 years
$ 0.20 - $0.25       7,735,000  
8 years
$ 0.40       1,150,000  
8 years
Total
    $ 9,885,000    
 
Performance-Based Stock Options
 
As of March 31, 2014 the Company granted performance-based options to purchase 6,950,000 shares of common stock at exercise prices ranging from $0.40 to $5,00. The options expire at various dates between 2021 and 2023 and are exercisable upon the Company achieving annual sales revenue ranging from $5,000,000 to $100,000,000. The fair value of these performance-based options aggregated $302,000 and will be expensed over the implicit service period commencing once management believes the performance criteria will be met. Accordingly, at March 31, 2014, the unearned compensation for performance based options is $302,000.

Warrants
 
Warrants outstanding and exercisable amounted to 3,887,720 at December 31, 2013 and March 31, 2014.  The weighted average exercise price of warrants outstanding at March 31, 2014 is $0.29.  The warrants expire between 2014 and 2016.