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NOTE 6. STOCK OPTIONS
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9 Months Ended |
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Sep. 30, 2012
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| Other Liabilities Disclosure [Abstract] | |
| NOTE 6. STOCK OPTIONS |
The Company accounts for employee and non-employee stock options under ASC 718, whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Unless otherwise provided for, the Company covers option exercises by issuing new shares.
The Companys stock option activity is described below.
Non-employee stock options
At the beginning of 2010 the Company had 10,000 non-employee stock options outstanding in the Companys subsidiary TransBiotec, Inc. During 2010 the Company granted 22,500 options for services, allowing the holder to purchase one share of common stock per option, with 22,500 options exercisable immediately at prices from $0.10 - $0.15 per share with the option terms expiring from January 2012 through January 2015. During 2011 no options were exercised, and no options expired, leaving a 2010 year end outstanding balance of 32,500 non-employee stock options. The fair value of the 22,500 options granted in 2010 was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 1.08% - 2.67%, dividend yield of 0%, expected lives of 2 - 5 years, volatility of 100%. The Company incurred and recorded compensation expense under these stock option grants of $53,262 in 2010.
During the nine months ended September 30, 2012, 10,000 options were exercised, and no options expired, leaving a September 30, 2012 outstanding balance of 22,500 non-employee stock options, exercisable at prices from $0.10 - $0.15 per share with the option terms expiring from October 2012 through January 2015.
Employee stock options
The Company had no outstanding employee stock options in 2010 or 2011, or during the nine months ended September 30, 2012.
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