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Stockholders' Equity
 6 Months Ended
Jun. 30, 2015
Equity [Abstract]  
Stockholders' Equity

9. Stockholders’ Equity

Preferred Stock – Our authorized preferred stock includes 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares have been issued or are outstanding.

Common Stock – Our authorized common stock includes 200,000,000 shares of common stock with a par value of $0.001, of which 111,714,938 and 111,601,304 shares were issued and outstanding as of June 30, 2015 and December 31, 2014, respectively.

 

During the six months ended June 30, 2015, we issued shares of common stock as follows:

 

 

 

Common Stock

 

 

 

Shares

 

 

Amount

 

Shares issued for vested restricted stock units

 

 

56,500

 

 

$

—

 

Shares issued for Employee Stock Purchase Plan options

 

 

57,134

 

 

 

60,705

 

 

 

 

113,634

 

 

$

60,705

 

·

Shares Issued for Vested Restricted Stock Units –

o

On March 5, 2015, we issued 56,500 shares to an employee for the restricted stock units that vested and were expensed during fiscal year 2014.  

·

Shares Issued for Employee Stock Purchase Plan Options –

o

On May 15, 2015, we issued 57,134 shares to employees for the Employee Stock Purchase Plan options that vested and were exercised.  

During the six months ended June 30, 2014, we issued shares of common stock as follows:

 

 

 

Common Stock

 

 

 

Shares

 

 

Amount

 

Sale of common stock and warrants

 

 

1,192,500

 

 

$

2,385,000

 

Shares issued upon conversion of note

 

 

23,201

 

 

 

29,001

 

Common stock issued for services

 

 

20,408

 

 

 

50,000

 

 

 

 

1,236,109

 

 

$

2,464,001

 

·

Sale of Common Stock and Warrants –

o

On April 18, 2014, we issued an aggregate of 1,192,500 units (the “Units”) to several accredited investors, for an aggregate purchase price of $2,385,000, with each Unit consisting of one share of our common stock and a warrant to purchase one share of our common stock for $2.00 per share. Additional warrants to purchase 248,500 shares of our common stock were issued as finder’s fees to third parties. Therefore, in total we issued 1,192,500 shares of common stock and warrants to purchase 1,441,000 shares of our common stock for $2.00 per share. Each warrant may be exercised by the holder thereof, in such holder’s sole discretion, in whole or in part, any time prior to April 1, 2017.

·

Shares Issued Upon Conversion of Note –

o

During September 2012, we issued a convertible note payable to an unrelated party.  During the six months ended June 30, 2014, $25,000 of principal and $4,001 of interest were converted into 23,201 shares of our common stock.

·

Common Stock for Services –

o

We issued 20,408 shares of common stock to consultants for $50,000 of services, of which $33,333 was expensed during the six months ended June 30, 2014 and $16,667 was prepaid for services in the subsequent period. We did not issue stock for services during the six months ended June 30, 2015.

Warrants – During the six months ended June 30, 2015 and 2014, we did not issue any warrants and no holders exercised warrants.  During the six months ended June 30, 2015, a third party forfeited 1,200,000 contingent warrants, with no corresponding expirations during the six months ended June 30, 2014.  At June 30, 2015, we had outstanding exercisable warrants to purchase 11,791,000 shares of common stock.  

·

Warrants for Services –

o

On May 7, 2014, we issued to a third party for services rendered warrants to purchase an aggregate of 200,000 shares of our common stock at $2.65 per share. Of the 200,000 warrants, 100,000 were exercisable immediately and the remaining become exercisable one year from the date of grant based on the achievement of performance conditions. We recorded stock-based compensation expense of $187,783 for the three and six months ended June 30, 2014.  Due to the decline in the fair value of these warrants, we recorded an increase of stock-based compensation expense of $6,081 and $141 for the three and six months ended June 30, 2015, respectively, related to these warrants. See Note 8 for a discussion of our Black-Scholes-Merton valuation assumptions.  

o

On May 28, 2014, we issued to a third party for services rendered contingent warrants to purchase an aggregate of 1,650,000 shares of our common stock at $4.31 per share. The warrants become exercisable at various times after achieving future performance conditions related to services and revenue targets for Earth911. During the six months ended June 30, 2014, we recorded no stock-based compensation expense for the three months ended June 30, 2014 related to these warrants due to the uncertainty of attaining any of the performance conditions. During the six months ended June 30, 2015, we terminated the contract with the third party, resulting in the forfeiture of 1,200,000 unvested warrants.  Due to the uncertainty of attaining any of the performance conditions, we had not recognized any additional expense for the non-vested warrants.  As these warrants related to internally developed software, we did not capitalize any costs or recognize any expense for the six months ended June 30, 2015.

The following table summarizes the warrants issued and outstanding as of June 30, 2015:

 

Warrants Issued and Outstanding as of June 30, 2015

 

 

 

Date of

 

Exercise

 

 

Shares of

 

Description

 

Issuance

 

Expiration

 

Price

 

 

Common Stock

 

Exercisable warrants

 

 

 

 

 

 

 

 

 

 

 

 

Warrants

 

04/18/2014

 

04/01/2017

 

$

2.00

 

 

 

1,441,000

 

Warrant

 

05/07/2014

 

05/07/2017

 

$

2.65

 

 

 

200,000

 

Warrant

 

05/28/2014

 

10/31/2016

 

$

4.31

 

 

 

450,000

 

Warrants

 

09/24/2014

 

09/24/2019

 

$

2.50

 

 

 

9,000,000

 

Warrants

 

10/20/2014

 

10/20/2019

 

$

2.50

 

 

 

700,000

 

Total exercisable warrants

 

 

 

 

 

 

 

 

 

 

11,791,000

 

Contingent warrants

 

 

 

 

 

 

 

 

 

 

 

 

Warrants

 

05/28/2014

 

10/31/2018

 

$

4.31

 

 

 

1,200,000

 

Less warrants cancelled

 

 

 

 

 

 

 

 

 

 

(1,200,000

)

Total contingent warrants

 

 

 

 

 

 

 

 

 

 

—

 

Total warrants issued and outstanding

 

 

 

 

 

 

11,791,000

 

Restricted Stock Units – During April 2014, we granted restricted stock units representing 132,600 shares of common stock under our 2012 Incentive Compensation Plan. The restricted stock units vest based on a combination of financial performance factors and continued service. The financial performance factors are based on the revenue generated by new business activity of one of our subsidiaries. All payouts of restricted stock units that vest will be exercisable immediately and will be paid in the form of common stock. While we do not anticipate issuing dividends, the restricted stock unit awards will not participate in any dividends prior to vesting.

We determined the fair value of the restricted stock unit awards granted based on the market value of our common stock on the date of grant, which was $3.75 per share. We assumed a forfeiture rate of 0%. Due to the uncertainty of attaining any of the remaining performance conditions, we recorded no additional stock-based compensation expense for the remaining performance conditions for the six months ended June 30, 2015. We issued 56,500 shares during the six months ended June 30, 2015 for the restricted stock units that vested during 2014.  As of June 30, 2015 and December 31, 2014, outstanding restricted stock units totaled 76,100 and 132,600, respectively.  

Employee Stock Purchase Plan – On September 17, 2014, our stockholders approved the Quest Resource Holding Corporation 2014 Employee Stock Purchase Plan (the “ESPP”). We recorded expense of $25,102 and $36,924 related to the ESPP during the three and six months ended June 30, 2015, respectively.  On May 15, 2015, we issued 57,134 shares to employees for the ESPP options that vested and were exercised.    

Stock Options – The following table summarizes the stock option activity for the six month period ended June 30, 2015:

 

 

 

Stock Options

 

 

 

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

 

Exercise

 

Average

 

 

 

Number

 

 

Price Per

 

Exercise Price

 

 

 

of Shares

 

 

Share

 

Per Share

 

Outstanding at December 31, 2014

 

 

5,006,532

 

 

$    1.45 — 3.75

 

$

2.66

 

Granted

 

 

145,625

 

 

$    1.11 — 1.46

 

$

1.25

 

Canceled/Forfeited

 

 

(111,084

)

 

$    1.45 — 2.10

 

$

2.04

 

Outstanding at June 30, 2015

 

 

5,041,073

 

 

$    1.11 — 3.75

 

$

2.56