Quarterly report pursuant to Section 13 or 15(d)

Stockholders Equity

v3.3.0.814
Stockholders Equity
9 Months Ended
Sep. 30, 2015
Equity [Abstract]  
Stockholders Equity

NOTE 6 – STOCKHOLDERS EQUITY

 

Common Stock

 

In December 2014 the Company entered into an employment agreement with two officers effective February 2015. As part of the agreement, the Company agreed to issue a total of 5,500,000 shares of the Company’s restricted common stock as a form of signing bonus. The Company determined that it was contractually obligated to issue the 5,500,000 signing bonus shares at December 31, 2014 and as a result, recorded its fair value of $987,500 in the December 31, 2014 statement of stockholders’ equity as common stock issuable. The shares issuable were valued at the date of the respective agreements. These shares were issued on January 9, 2015.

 

During the period ended September 30, 2015, the Company issued an aggregate of 1,679,166 shares of common stock to employees with a total fair value of $879,183 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $879,183 upon issuance. The shares issued were valued at the date of the respective agreements.

 

During the period ended September 30, 2015, the Company issued an aggregate of 2,420,000 shares of common stock to consultants with a total fair value of $1,280,550 for services rendered. The shares issued are non-refundable and deemed earned upon issuance. As a result, the Company expensed the entire $1,280,550 upon issuance. The shares issued were valued at the date of the respective agreements.

 

On February 23, 2015 the Company issued 2,500,000 shares of the its restricted common stock valued at $1,700,000, pursuant to the acquisition of Franklin Networks, Inc. See Note 3.

 

Common Stock with Vesting Terms

 

In August 2015, the Company granted 100,000 shares of its restricted common stock to an employee pursuant to an employment agreement. The 100,000 shares vest over a period of one year with a fair value of $37,000 at the date of grant.

 

In February 2015, the Company granted 500,000 shares of its restricted common stock to a consultant pursuant to a consulting agreement. The 500,000 shares are forfeitable and are deemed earned upon completion of service over a period of twenty four months.

 

During the period ended September 30, 2015, 183,334 shares vested and as a result, the Company recognized compensation cost of $47,850. As of September 30, 2015, total unvested shares totaled 416,666 shares with compensation costs of approximately $114,200 which will be recognized in fiscal years 2016 and 2017.

 

Warrants

 

The following table summarizes certain information about the Company’s stock purchase warrants activity for the period starting December 31, 2014 up to September 30, 2015.

    Warrants   Weighted Avg.  
Exercise Price
  December 31, 2014       —       $ —    
  Granted       250,000       0.55  
  Exercised       —         —    
  Cancelled       —         —    
  September 30, 2015       250,000     $ 0.55  

 

On June 22, 2015, pursuant to an employment agreement, the Company granted an employee warrants to purchase 250,000 shares of common stock at $0.55 per share. The warrants vest one year after grant and expire in one year thereafter. Total fair value of the warrants at grant date amounted to $60,914 using the Black-Scholes Option Pricing model with the following assumptions: life of 0.5 year; risk free interest rate of 0.08%; volatility of 145% and dividend yield of 0%. During the period ended September 30, 2015, the Company recorded compensation expense of $16,564 pursuant to the vesting of the warrants. In addition, the Company is obligated to issue warrants to purchase between 100,000 to 300,000 shares of common stock upon achievement of certain milestones or benchmarks by the employee. As of September 30, 2015, the Company determined that the probability of achievement of these milestones or benchmark is remote. The Company will make a determination on the probability of its achievement in future reporting period

 

At September 30, 2015, the aggregate intrinsic value of the warrants outstanding was $0. Future unamortized compensation expense on the unvested outstanding warrants at September 30, 2015 is $44,350.