STOCKHOLDER'S EQUITY

3 Months Ended

Mar. 31, 2018

Equity [Abstract]

STOCKHOLDER'S EQUITY (DEFICIT)

NOTE 8 – STOCKHOLDER’S EQUITY

Common Stock

During the quarter ended March 31, 2018, the Company granted 720,000 shares of Restricted Stock to the non-employee Directors in connection with their compensation to serve as Board Members. The shares were valued at the fair market value at the date of grant and vest quarterly.

During the quarter ended March 31, 2018, an investor exercised 2,200,000 warrants at $0.05 cents on a cashless exercise basis in exchange for 1,672,190 shares of common stock of the Company.

Warrants

The following is a summary of the Company’s warrant activity for the three months ended March 31, 2018:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding at December 31,2017		48,164,543	$	0.08		2.9 Years
Exercised		2,200,000	$	0.05		—
Outstanding at March 31, 2018		45,964,543	$	0.08		2.6 Years

Stock Options

During the three months ended March 31, 2018, the Company granted options to acquire 4,750,000 shares of common stock to four employees and one non-employee of which 2,750,000 options are exercisable at $0.22 per share and 2,000,000 are exercisable at $0.25 cents share. The options have a term of ten years, were granted at fair market value at the date of grant .and vest over three years. The grant date fair value of the options totaled approximately $700,000, which will charged to expense over the three year vesting term of which approximately $167,000 was related to non-employees.

The Company determined the grant date fair value of the options granted during the three months ended March 31, 2018 using the Black Scholes Method and the following assumptions:

Expected Volatility – 77-78%

Expected Term – 6.5 Years

Risk Free Rate – 2.4-2.7%

Dividend Rate – 0.00%

Activity related to stock options for the three months ended March 31, 2018 is summarized as follows:

			Weighted Average		Weighted Average
			Exercise		Contractual		Aggregate
	Number of Shares		Price		Term (Yrs.)		Intrinsic Value
Outstanding as of December 31, 2017		103,208,331	$	0.19		8.3	$	11,457,291
Granted		4,750,000	$	0.23		9.8	$	237,500
Forfeitures		—		—
Outstanding as of March 31, 2018		107,958,331		0.20		8.18	$	14,544,583
Exercisable as of March 31, 2018		86,162,500	$	0.21		8.17	$	11,129,208

The following table summarizes stock option information as of March 31, 2018:

			Weighted Average
			Contractual
Exercise Prices	Outstanding		Life		Exercisable
$ 0.00		3,500,000		7.50 Years		3,500,000
$ 0.05		33,450,000		8.36 Years		25,937,500
$ 0.10		27,250,000		8.80 Years		20,166,669
$ 0.13		250,000		9.75 Years		—
$ 0.15		5,258,331		7.60 Years		4,258,331
$ 0.22		2,750,000		9.80 Years		—
$ 025		2,500,000		9.5 Years		300,000
$ 0.29		1,000,000		9.25 Years		—
$ 0.40		l,000,000		7.92 Years		l,000,000
$ 0.45		31,000,000		7.55 Years		31,000,000
Total		107,958,331		8.18 Years		86,162,500

During the three months ended March 31, 2018, the Company recognized approximately $648,000 of stock-based compensation expense related to options of which non-employees expense was approximately $167,000. As of March 31, 2018, there was approximately $3,700,000 of unrecognized compensation costs related to stock options outstanding of which approximately $829,000 was related to non-employees and will be expensed through 2010.