4. Stockholders' Equity

6 Months Ended

Jun. 30, 2016

On May 21, 2014, the Company entered into a Non-Exclusive Sales, Distribution, Manufacturing and License Agreement and a Consulting Agreement with a consulting firm. In consideration of these services, the Company will issue 9,000,000 shares and a 10-year warrant for the purchase of 3,000,000 shares at an exercise price of $0.148 per share. The warrants vest immediately and have a fair value of $321,197 as calculated using the using Black-Scholes model. Assumptions used in the Black- Scholes model include: (1) a discount rate of 0%; (2) an expected term of 10 years; (3) an expected volatility of 117%; and(4) zero expected dividends. The shares are to be issued in quarterly installments beginning in August 2014. The fair value of the shares will be determined upon the completion of the services. The Company terminated the remaining contract in 2016. During the six months ended June 30, 2016, the remaining $32,341 in fair value was recognized under this award. All common shares have been issued under this agreement. There is no remaining unamortized expense as of June 30, 2016.

On June 17, 2014, the Company entered into a Consulting Agreement with an individual. In consideration for these services the Company will issue 2,000,000 shares to him. During the six months ended June 30, 2016, $2,593 in fair value was recognized under this award. The remaining fair value of the unvested portion as of June 30, 2016 was determined to be $7,247, which will be recognized over the remaining service period. The Company terminated the remaining contract in 2016. There is no remaining unamortized expense as of June 30, 2016. As of June 30, 2016, 1,333,336 shares have been issued under this agreement and 666,664 have not been issued as of June 30, 2016.

A summary of the Company’s option activity during the three months ended June 30, 2016, is as follows:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Balance outstanding, December 31, 2015		5,300,000		0.02		4.89
Granted		–		–		–
Exercised		–		–		–
Forfeited/expired		3,833,333		–		–
Balance outstanding, June 30, 2016		1,466,667	$	0.02		4.34
Exercisable, June 30, 2016		1,466,667	$	0.02		4.34

A summary of the Company’s warrant activity during the three months ended June 30, 2016, is as follows:

Number of Warrants

Weighted Average
Exercise Price

Weighted Average
Remaining
Contractual Term

Balance outstanding, December 31, 2015

3,350,000

0.20

7.75

Granted

–

Exercised

–

Forfeited/expired

–

Balance outstanding, June 30, 2016

3,350,000

0.20

7.45

Exercisable, June 30, 2016

3,350,000

0.20

7.45

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

PETROSONIC ENERGY, INC. 10-Q/A