Competitive Companies Inc. (fka CCOP)

[LGL8054]

Stock-Based Compensation

All share based-based payments to service providers or employees, including grants of employee stock options, are recognized in the income statement based upon their fair values. Stock issued for services, compensation and expenses related to stock option awards totaled $97,850 and $31,684 for the years ended December 31, 2013 and 2012, respectively.



Result of Operations for the Years Ended December 31, 2013 and 2013



Revenues for the year ended December 31, 2013 was $514,484 compared to revenues of $85,889 for the year ended December 31, 2012. This resulted in an increase in revenues of $428,595, or 499%. Our revenues increased in 2013 compared to 2012 due to the recognition of revenue from 18 Registered Links that went live in 2013.



Cost of sales for the year ended December 31, 2013 was $258,765, an increase of $198,960, or 333%, from $59,805 for the year ended December 31, 2012. Our cost of sales increased primarily due to costs incurred in the operation of our Registered Links Program from which we have recognized $450,000 in link revenue for the year ended December 31, 2013.



General and administrative expenses were $2,884,467 for the year ended December 31, 2013, as compared to $872,024 for the year ended December 31, 2012. This resulted in an increase of $2,012,443 or 231%. The increase in our general and administrative expenses was largely a result of commissions paid for link sales. Commissions expense is recorded in the period in which the commission form the link sale has been earned and paid, even though the revenue from the sale may not be recognized until a future period.



Salary and wage expenses were $743,113 for the year ended December 31, 2013, versus $329,444 of salary and wage expenses for the year ended December 31, 2012, which resulted in an increase of $413,669, or 126%. The increase in salary and wages is due to the increase in compensation of the current employees, along with the addition of higher level employees throughout the Company. The number of employees has increased from 6 full time employees in 2012 to 13 full time employees in 2013.