Stockholders' Deficit

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Stockholders' Deficit

NOTE 10 — STOCKHOLDERS’ DEFICIT

In September 2016, Trans Energy issued 6,957 shares of common stock to Scott Jackson Consulting, LLC, for fees related to services rendered at a value of $1.20 per share.

In September 2016, Trans Energy issued 400,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.05 per share.

In August 2016, Trans Energy issued 3,604 shares of common stock to Scott Jackson Consulting, LLC, for fees related to services rendered at a value of $1.11 per share.

In August 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.11 per share.

In July 2016, Trans Energy issued 5,333 shares of common stock to Scott Jackson Consulting, LLC, for fees related to services rendered at a value of $1.11 per share.

In July 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.10 per share.

In June 2016, Trans Energy granted 64,300 shares of stock to seven employees and five outside board members under the long-term incentive bonus program. The 64,300 shares are not performance based and vest semi-annually over a three year period. The 64,300 shares were valued at $1.10 per share of common stock using the fair value of the common stock at the date of grant and the fair value will be amortized to compensation expense semi-annually over three years.

In June 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $0.75 per share.

In June 2016, Trans Energy issued 5,334 shares of common stock to Scott Jackson Consulting, LLC, for fees related to services rendered at a value of $0.75 per share.

In May 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.00 per share.

In May 2016, Trans Energy issued 7,143 shares of common stock to Scott Jackson Consulting, LLC, for fees related to services rendered at a value of $1.12 per share.

In April 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.00 per share.

In March 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.00 per share.

In February 2016, Trans Energy issued 50,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $0.41 per share.

In January 2016, Trans Energy issued 25,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $0.45 per share.

In December 2015, Trans Energy issued 25,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $0.60 per share.

In November 2015, Trans Energy issued 25,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $0.70 per share.

In October 2015, Trans Energy issued 25,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $0.80 per share.

In April 2015, Trans Energy issued 150,000 shares of common stock to Gordian Group, LLC, for fees related to services rendered at a value of $1.80 per share.

In February 2015, Trans Energy issued 100,000 shares of common stock to John G. Corp, President, for the 2014 Performance Payment at a price of $2.10 per share.

In February 2015, Trans Energy issued 100,000 shares of common stock to Stephen P. Lucado, Chairman of the Board, for the 2014 Performance Payment at a price of $2.10 per share.

In January 2015, Trans Energy issued 109,005 shares of common stock to William F. Woodburn, a related party, for the exercise of options at a price of $1.50 per share.

In January 2015, Trans Energy issued 109,005 shares of common stock to Loren E. Bagley, a related party, for the exercise of options at a price of $1.50 per share.

The Company has computed the fair value of all options granted using the Black-Scholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding components of the model, including the estimated fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to valuation. The Company estimated a volatility factor utilizing a weighted average of comparable published volatilities of peer companies. The Company has estimated a forfeiture rate of zero as the effect of forfeitures has not been significant and the small number of option holders does not provide a reasonable basis for prediction. The Company estimates the expected term based on the average of the vesting term and the contractual term of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The fair value of all options granted during the three and nine months ending September 30, 2016, was determined using the following assumptions:

Expected volatility		90	%
Risk free interest rate		1.75	%
Expected term (years)		3.0
Dividend yield		0	%
Estimated grant date fair value	$	0.35

As a result of the above stock and option transactions, we recorded total stock-based compensation of $91,124 and $125,027 for the three months ended September 30, 2016 and 2015, respectively and $289,113 and $817,030 for the nine months ended September 30, 2016 and 2015, respectively. This unrecognized cost is expected to be recognized over the next 2.0 years.

Stock option activity is as follows:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Fair Value
Outstanding December 31, 2015		2,137,000		$	2.53		.75 Years	$	5,406,610
Granted		200,000		$	0.60
Exercised		—			—
Forfeited		(169,000	)	$	2.77
Expired		(330,000	)	$	2.68
Outstanding September 30, 2016		1,838,000		$	2.27		1.48 Years	$	4,172,260
Exercisable at September 30, 2016		1,589,500		$	2.46			$	3,814,800
Unvested at September 30, 2016		248,500