Common Stock, Options and Warrants

9 Months Ended

Sep. 30, 2014

Notes to Financial Statements

Note 9. Common Stock, Options and Warrants

he Company’s Articles of Incorporation authorize for issuance 150.0 million shares of its Common Stock, of which 63,341,163 and 52,728,644 shares were issued and outstanding at September 30, 2014 and December 31, 2013, respectively.  

On May 21, 2013, the Company authorized the issuance of 1.0 million shares of Common Stock to management as compensation for services with a fair value of $30,000.

On December 6, 2013, the Company authorized the issuance of 900,000 shares of Common Stock to management as compensation for services with a fair value of $9,000.

On May 1, 2014, the Company received and accepted a notice of conversion to, in accordance with the procedures set forth in the Certificate of Designation for the Series B Convertible Preferred Stock, convert 3,739,286 shares of Series B Preferred into the same number of shares of Common Stock.

Other than the issuances to certain New Note investors of 500,000 shares of Common Stock, issuances to certain 2014 Note investors of an aggregate total of 272,000 shares of Common Stock, 1.8 million shares of Common Stock issued in connection with the professional services agreement as described in Note 10 below, 300,000 shares of Common Stock issued to a consultant as described in Note 10 below, 300,000 shares of Common Stock issued as settlement of accounts payable, and 1.9 million shares of Common Stock issued to management, no Common Stock, or options to purchase Common Stock, were issued or granted during the nine months ended September 30, 2014.

During the nine months ended September 30, 2014, 140,000 stock options and 1,331,000 warrants to purchase the Company’s Common Stock expired.

2007 Incentive and Non-Qualified Stock Option Plan.  The fair value of options granted under the Company’s 2007 Incentive and Non-Qualified Stock Option Plan is recorded as compensation expense over the vesting period, or, for performance based awards, the expected service term.  During the three and nine months ended September 30, 2014 and 2013, the Company had no compensation expense related to employee stock options.