Stock Compensation
In consideration for being the Company's strategic business advisor,
in 2007 the Company issued a warrant to Martin Magida to purchase up
to 160,480 shares of the Company's common stock at $.24 per share.
The warrant is valid from September 1, 2007 for a period of five
years. This warrant was fair valued under the Black-Scholes Model and
amortized over the life of the warrant agreement. For the three
months ended March 31, 2011, $1,114 was recognized as share-based
compensation in connection with this agreement.
In consideration for providing advisory services in 2007, the Company
issued a warrant to Robert Guinta to purchase up to 160,480 shares of
the Company's common stock at $.24 per share. The warrant is valid
from September 1, 2007 for a period of five years. This warrant was
fair valued under the Black-Scholes Model and amortized over the life
of the warrant agreement. For the three months ended March 31, 2011, $1,114
was recognized as share-based compensation in connection with this
agreement.
Under the terms of a consulting agreement dated February 2010, the
Company issued warrants to Fountainhead Capital Management to
purchase up to 39,063,670 shares of the Company's common stock at
$.0125 per share. The warrants are valid from February 10, 2010 for a
period of five years. This warrant was fair valued under the
Black-Scholes Model and amortized over the life of the warrant
agreement. For the three months ended March 31, 2011, $17,523 was
recognized as share-based compensation in connection with this
agreement.
Under the terms of a twelve month sales and marketing consulting
agreement dated March 2010, the Company issued 750,000 shares of its
Common Stock to Joe Simone, valued at $9,375. For the three months
ended March 31, 2011, $1,921 was recognized as share-based
compensation in connection with this agreement.
Under the terms of an Extension of Funding Commitment agreement dated
September 2010, the Company issued warrants to Fountainhead Capital
Management to purchase up to 50,627,407 shares of the Company's
common stock at $.0175 per share. The warrants are valid from
September 29, 2010 for a period of five years. This warrant was fair
valued under the Black-Scholes Model and amortized over the life of
the warrant agreement. For the three months ended March 31, 2011,
$22,710 was recognized as share-based compensation in connection with
this agreement.
Under the terms of a consulting agreement dated December 6, 2010, the
Company issued a warrant to Market Media Connect, LLC to purchase up
to 500,000 shares of the Company's common stock at $.07 per share.
The warrant is valid from December 1, 2010 for a period of three
years. This warrant was fair valued under the Black-Scholes Model and
amortized over the life of the warrant agreement. For the three
months ended March 31, 2011, $278 was recognized as share-based
compensation in connection with this agreement.
In March 2011 the Company entered into a one year consultancy
agreement with Mr Jerold Ginder, a sales executive of Stryker
Corporation, effective April 1, 2011. Mr Ginder has extensive
experience in sales and marketing and the development of medical
device products, and has contacts which will be of use to the
Company. Under the terms of the one year agreement, which the Company
has the right to terminate with 30 days notice, Mr Ginder will
receive $5,000 a month and 18,000,000 restricted shares of common
stock of the Company. The stock has been valued by the Company at
$360,000 and will be amortized over the life of the agreement as
share-based compensation expense.
Stock-based compensation expense charged to operations on employee
options and on stock and warrants granted to the above non-employees
for the three months ended March 31, 2011 is $79,455. As of March 31,
2011, there was approximately $1,054,786 of total unrecognized
compensation costs related to non-vested option, warrant and stock
awards, which are expected to be recognized over a weighted average
period of approximately 3.1 years.
Stock-based compensation expenses related to employee options and
warrants granted to non-employees is recognized as the stock options
and warrants are earned. The Company believes that the fair value of
the stock options and warrants is more reliably measured than the
fair value of the services received. The fair value of the stock
options or warrants granted is calculated at the grant date, using
the Black-Scholes option-pricing model, and the expense recognized
over the vesting period or life of the warrant, as applicable. The
following assumptions were used in calculations of the Black Scholes
option pricing model in the three months ended March 31, 2011:
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Risk-free interest rates
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1.26 %
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Expected life
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3 years
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Expected dividends
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0%
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Expected volatility
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96%
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The weighted-average remaining contractual life of outstanding
warrants and options is 1.86 and 7.88 years, respectively.