3. STOCK BASED COMPENSATION

3 Months Ended

Mar. 31, 2020

Notes

3. STOCK BASED COMPENSATION

3.     STOCK BASED COMPENSATION

The following table summarizes the Company’s employee stock option activity for the three months ended March 31, 2020:

 

Schedule of Employee Stock Option Activity
	Options	Weighted average exercise price	Weighted average remaining contractual life (yrs)	Aggregate Intrinsic value
Options outstanding, December 31, 2019	2,318,835	$0.010	6.42
Options exercisable, December 31, 2019	1,628,165	$0.007	6.00	$ 37,682
Options issued during the period	1,108,000	$0.010
Options expired during the period	-	-
Options outstanding March 31, 2020	3,426,835	$0.010	7.39
Options exercisable March 31, 2020	2,116,835	$0.008	6.02	$ 7,902

During the three months ended March 31, 2020, 1,108,000 nonqualified employee stock options were granted with an exercise price of $0.01 per option. The options were valued using Black-Scholes option pricing model on the respective date of issuance and the fair value of the shares was determined to be $11,052 of which $307 was recognized as stock-based compensation expense for the three months ended March 31, 2020. These stock options will vest one-third on each annual anniversary of the grant date (February 28, 2020) and will expire ten years from the date of the grant.  

Total stock-based compensation expense for the three months ended March 31, 2020 was $1,231 of which $307 was related to options issued during the three months ended March 31, 2020 and $924 was related to options issued in prior years. Stock-based compensation is measured at the grant date, based on the calculated fair value of the option, and is recognized as an expense on a straight-line basis over the requisite employee service period (generally the vesting period of the grant).  

The Black-Scholes option pricing model was used with the following weighted-average assumptions for options granted during the three   months ended March 31, 2020:

	2020
Risk free interest rate	0.89%
Expected lives (in years)	5
Expected volatility	208%
Dividend yield	0%