The Company is authorized to issue 200,000,000
shares of common stock, par value of $0.001, and 10,000,000 shares of preferred stock, par value of $0.001.
Commencing on January 24, 2011, the Company
began the sale of up to 2,000,000 shares of its common stock at $.25 per share in a private placement. During fiscal
2011, the Company sold 962,000 shares for gross proceeds of $240,500. No selling commissions were incurred with respect to these
sales of stock.
As of September 30, 2012, the Company had 13,106,500
shares of common stock issued and outstanding and had not issued any of its preferred stock.
On September 15, 2011, the Company adopted the
West Texas Resources, Inc. 2011 Stock Incentive Plan (the Plan) providing for the grant of non-qualified stock options
and incentive stock options to purchase its common stock and for grant of restricted and unrestricted grants. The Company has reserved
3,000,000 shares of its common stock under the Plan. All officers, directors, employees and consultants to the Company are eligible
to participate under the Plan. The purpose of the Plan is to provide eligible participants with an opportunity to acquire an ownership
interest in the Company.
The Company granted options to certain consultants
to purchase 400,000 shares of the Companys common stock. The options vest immediately and expire on September 15, 2016.
The fair value of each share-based award was estimated using the Black-Scholes option pricing model or a lattice model. The fair
value of these options, determined to be $65,402, was included in general and administrative expenses for the year ended September
The following assumptions were used in the fair value method calculation:
||Risk free rate of return: 1%|
||Expected term: 5 years|
The following information applies to all options outstanding at September
||Weighted average exercise price: $0.25|
||Options outstanding and exercisable: 400,000|
||Average remaining life: 4 years|