Stockholders' Equity

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

Stockholders' Equity

NOTE 9. STOCKHOLDERS’ EQUITY

Stock Options

The Company periodically issues non-qualified incentive stock options to key employees, officers and directors under a Stock Option Compensation plan approved by the Board of Directors in 2009. Terms of the option grants are at the discretion of the Board of Directors but historically have been seven years. During the three months ended March 31, 2017, the Company issued 13,750 stock options, with a weighted average exercise price of $5.20 per share. No stock options were granted during the three months ended March 31, 2018.

2017 Equity Incentive Plan

On August 23, 2017 and October 6, 2017, respectively, the board of directors and shareholders approved the 2017 Equity Incentive Plan (the “Equity Plan”). The Equity Plan is intended to make available incentives that will assist us to attract, retain and motivate employees, including officers, consultants and directors. We may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and units and other cash-based or stock-based awards.

A total of 1,187,500 shares of our common stock was initially authorized and reserved for issuance under the Equity Plan. This reserve will automatically increase on January 1, 2018 and each subsequent anniversary through 2027, by an amount equal to the smaller of (a) 3% of the number of shares of common stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the board. On January 1, 2018, the amount authorized and reserved increased to 1,424,630 shares.

Awards may be granted under the Equity Plan to our employees, including officers, directors or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. All awards will be evidenced by a written agreement between us and the holder of the award and may include any of the following: stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares and performance units and cash-based awards and other stock-based awards. To date, there have been no awards under this plan.

The assumptions used for the periods ended March 31, 2018 and 2017, and the resulting estimates of weighted-average fair value per share of options granted during those periods, are as follows:

	Three Months March 31,
	2018		2017
Volatility		-		99% to 101%
Risk-free interest rate		-		1-2%
Expected term		-		7 years

The following table summarizes all compensation plan stock options as of March 31:

	March 31, 2018				March 31, 2017
	Number of Stock		Weighted Exercise		Number of Stock			Weighted Exercise
	Options		Price		Options			Price
Options outstanding, beginning of year		531,667	$	1.80		557,917		$	1.55
Granted		-		-		13,750			5.20
Redeemed		-		-		(12,500	)		1.40
Exercised		-		-		-			-
Expired / terminated		-		-		-			-
Options outstanding, end of quarter		531,667	$	1.80		559,167		$	1.64
Options exercisable, end of quarter		521,667	$	1.82		539,167		$	1.68

Stock compensation expense was $69,163 for the three months ended March 31, 2017. No such expense occurred during the three months ended March 31, 2018. There are 10,000 non-vested stock options as of March 31, 2018 that will vest in October 2018.