Stock-Based Compensation

9 Months Ended

Dec. 31, 2013

Note 9: Stock-Based Compensation

On August 26, 2013 and September 11, 2013, the Company executed separate agreements with three non-employees for consulting services to be performed. Each of the agreements call for 315,000 non-statutory stock options to be issued with an exercise price of $0.15 per share. Under each agreement, 15,000 shares vest immediately, and 5,000 shares shall vest each of the first 60 months starting October 1, 2013. No additional shares will be vested after the continuous employment with the Company if a consultant is terminated for any reason. During the nine months ended December 31, 2013, the Company recorded $26,696 as stock based compensation related to the fair market value of options vested immediately.

On June 7, 2013, the Company executed separate agreements with three non-employees for consulting services to be performed. Each of the three agreements call for 315,000 non-statutory stock options to be issued with an exercise price $0.15 per share. 15,000 shares shall invest immediately and 5,000 shares shall vest each of the first 60 months starting July 1, 2013. No additional shares will be vested after the continuous employment with the Company if a consultant is terminated for any reason.

From time to time, the Company grants stock option awards to officers and employees. Such awards are valued based on the grant date fair value of the instruments, net of estimated forfeitures, using a Black-Scholes option pricing model with the following assumptions:


Volatility		148-193.8%
Risk-free interest rate		1.03-2.31%
Expected term		5-7.5 years
Forfeiture rate		0-10%
Dividend yield rate		0%

The volatility used was based on historical volatility of similar sized companies due to lack of historical data of the Company's stock price. The risk free interest rate was determined based on treasury securities with maturities equal to the expected term of the underlying award. The expected term was determined based on the simplified method outlined in Staff Accounting Bulletin No. 110. Stock option awards are expensed on a straight-line basis over the requisite service period. During the nine months ended December 31, 2013 and 2012 the Company recognized $26,696 and $48,524 respectively, of compensation expense. Unamortized compensation expense related to the 1,575,000 options outstanding at December 31, 2013 is $275,521.

The following summarizes stock option activity for the nine months ended December 31, 2014


	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at March 31, 2013		500,000	$	0.04		8.61	$	0
Granted		1,575,000		0.11		9.23		0
Exercised		-		-		-		-
Forfeited		-		-		-		-
Outstanding at December 31		2,075,000	$	0.15		9.23	$	0
Exercisable		695,000	$	0.15		8.61	$	0

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

Mister Goody, Inc. 10-Q