XML 37 R30.htm IDEA: XBRL DOCUMENT v2.4.0.6
Note 2 - Summary of Significant Accounting Policies: Stock-based Compensation (Policies)
3 Months Ended
Mar. 31, 2013
Policies  
Stock-based Compensation

Stock-Based Compensation

 

The Company accounts for employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation – Stock Compensation which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Stock-based compensation expense recognized in the periods ended March 31, 2013 and 2012 totalled $534,723 and $434,517, respectively, for these options. Unrecognized expense of $2,530,712 remains to be recognized through 2015.

 

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees.  In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined.  The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered. There were 2,500,000 options valued at $1,136,250 issued to an advisor in 2012. Based on the vesting term, $520,781 was charged to consulting expense and $615,469 was recorded as prepaid consulting in 2012. During the period ended March 31, 2013, $142,031 of the prepaid consulting balance was charged to consulting expense. There were 750,000 options issued in 2011 to settle a dispute with an advisor. These options were valued at $400,425 using the Black-Scholes pricing model.