2. STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

Notes

2. STOCK BASED COMPENSATION

2.     STOCK BASED COMPENSATION

The following table summarizes our employee stock option activity for the nine months ended September 30, 2022:

Schedule of Employee Stock Option Activity
	Options	Weighted average exercise price	Weighted average remaining contractual life (yrs)	Aggregate Intrinsic value
Options outstanding, December 31, 2021	2,342,629	$0.023	7.20	$1,522,619
Options exercised during the period	1,746,633	$0.015
Options canceled during the period	43,666	$0.007
Options issued during the period	4,500	$0.200
Options outstanding September 30, 2022	556,830	$0.051	6.98	$266,705
Options exercisable September 30, 2022	63,667	$0.114	3.35	$26,475

During the nine months ended September 30, 2022, 4,500 nonqualified employee stock options were granted with an exercise price of $0.20 per option. The options were valued using Black-Scholes option pricing model on the date of issuance, and the fair value of the options was determined to be $1,547 of which $129 was recognized as stock-based compensation expense for the nine months ended September 30, 2022. The 4,500 options will vest one-third on each annual anniversary of the grant date and will expire ten years from the date of grant.

During the nine months ended September 30, 2022, certain employees of ours exercised options to purchase 1,746,633 restricted shares of our common stock, par value $00001 per share. Proceeds from the exercise of the Options were $26,174. The common shares were issued pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, without payment of any form of commissions or other remuneration.

On June 15, 2022, we paid the May 13, 2022 dividends declared on our common stock of $537,425, to shareholders of record on May 31, 2022. On September 15, 2022, we paid the August 15, 2022 dividends declared on our common stock of $57,581, to shareholders of record on August 31, 2022.

Total stock-based compensation expense for the nine months ended September 30, 2022 was $9,041, of which $129 was related to options issued during the nine months ended September 30, 2022, and $8,912 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).