Quarterly report pursuant to Section 13 or 15(d)

EQUITY TRANSACTIONS

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EQUITY TRANSACTIONS
 3 Months Ended
Mar. 31, 2015
Equity [Abstract]  
EQUITY TRANSACTIONS
6. 
EQUITY TRANSACTIONS
 
Common Stock
 
During the three months ended March 31, 2015, the Company entered into a settlement and release agreement with Songstagram and Jeff Franklin, pursuant to which the Company agreed to issue 500,000 shares of common stock valued at $250,000 to Mr. Franklin in full settlement and release of a claim he had on certain assets acquired from Songstagram (see Note 5).
 
During the three months ended March 31, 2014, the Company received capital contributions from stockholders' totaling $380,000, and granted its majority shareholder $62,500 of equity interests as payment of his accrued salary for the three months ended March 31, 2014.
 
Stock Options
 
Effective October 16, 2014, the Company adopted the 2014 Stock Option Plan (the "Plan") under the administration of the board of directors to retain the services of valued key employees and consultants of the Company.
 
On November 21, 2014, the Company entered into an executive employment agreement with Rory Cutaia, the Company's Chief Executive Officer, and issued the following stock options in connection with the agreement: (i) 800,000 stock options, each exercisable into one share of our common stock at a price of $0.50 per share, 400,000 of which vested immediately and 400,000 which will vest one year from the execution date, on November 21, 2015 and (ii) 250,000 stock options on each anniversary of the execution date.
 
On November 12, 2014, the Company granted an additional 7,350,000 stock options to various key employees and consultants which are exercisable into shares of common stock at a price of $0.50 per share. The options have a 5 year life and vest over periods ranging from immediately to 4 years from the date of grant.
 
There was no option activity during the three months ended March 31, 2014. A summary of option activity for the three months ended March 31, 2015 is presented below.
 
           
Weighted-
      
       
Weighted-
    
Average
      
       
Average
    
Remaining
    
Aggregate
  
       
Exercise
    
Contractual
    
Intrinsic
  
   
Options
    
Price
    
Life (Years)
    
Value
  
                 
Outstanding at December 31, 2014
    
6,470,000
    
$
0.50
      
4.87
    
$
-
  
Granted
    
-
                      
-
  
Forfeited
    
(10,000
)
    
0.50
              
-
  
Exercised
    
-
                      
-
  
Outstanding at March 31, 2015 (unaudited)
    
6,460,000
    
$
0.50
      
4.62
    
$
-
  
                                 
Vested and expected to vest
                                
  at March 31, 2015 (unaudited)
    
5,103,400
    
$
0.50
      
4.62
    
$
-
  
                                 
Exercisable at March 31, 2015 (unaudited)
    
1,925,000
    
$
0.50
      
4.62
    
$
-
  
 
The total expense recognized relating to stock options for the three months ended March 31, 2015 and 2014 amounted to $64,496 and $0, respectively.  As of March 31, 2015, total unrecognized stock-based compensation expense was $1,388,577, which is expected to be recognized as an operating expense through November 2019.
 
Warrants
 
On November 12, 2014, the Company granted warrants to a consultant to purchase 600,000 shares of common stock at an exercise price of $0.50 per share. The warrants expire on November 12, 2019 and were fully vested on the grant date. 
 
On March 21, 2015, the Company entered into an agreement with DelMorgan Group LLC to act as its exclusive financial advisor. In connection with the agreement, the Company granted 48,000 warrants with an exercise price of $0.10 per share.  The warrants were fully vested on the date of the grant and expire on March 20, 2018.  The warrants have been valued using the Black-Scholes pricing model as of the contract date.  The total value of $20,114 has been recorded as a component of prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet as of March 31, 2015 and is being amortized over the life of the agreement.