Note 8 – Stock Options and Warrants

Stock Options and Compensation-Based Warrants

The Company has an incentive stock option plan wherein 20,000,000 shares of the Company’s common stock are reserved for issuance thereunder.

No income tax benefit has been recognized for share-based compensation arrangements.  The Company has recognized plantation development costs totaling $124,565 related to a liability that was satisfied by the issuance of warrants in 2008.  Otherwise, no share-based compensation cost has been capitalized in the consolidated balance sheet.

A summary of the status of options and compensation-based warrants at December 31, 2012 and 2013, and changes during the years then ended is presented in the following table:

The fair value of other stock option grants and compensation-based warrants is estimated on the date of grant or issuance using the Black-Scholes option pricing model.  Options to purchase 14,100,000 shares of common stock were issued in the year ended December 31, 2013 and 13,780,000 in the year ended 2012. The weighted average fair value of stock options issued during the years ended December 31, 2013 and 2012 as $0.015 and $.00916, respectively.   The weighted-average assumptions used for the stock options granted and compensation-based warrants issued during the years ended December 31, 2013 and 2012 were risk-free interest rate of 1.30% and . 628%, volatility of 181% and 178%, expected life of 5.0 years, and dividend yield of zero. The expected life of stock options represents the period of time that the stock options granted are expected to be outstanding prior to exercise. The expected volatility is based on the historical price volatility of the Company’s common stock. The risk-free interest rate represents the U.S. Treasury constant maturities rate for the expected life of the related stock options. The dividend yield represents anticipated cash dividends to be paid over the expected life of the stock options. The intrinsic values are based on a December 31, 2013 closing price of $0.01 per share.

Share-based compensation from all sources recorded during the year ended December 31, 2013 and 2012 was $124,492 and $86,015, respectively, and is reported as general and administrative expense in the accompanying condensed consolidated statements of operations.  As of December 31, 2013, there is approximately $148,567 of unrecognized compensation cost related to stock-based payments that will be recognized over a weighted average period of approximately 0.29 years.

Stock Warrants

A summary of the status of the warrants outstanding at December 31, 2012 and 2013, and changes during the years then ended is presented in the following table: