Note 5 - Stock-based Compensation

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

5. Stock-Based Compensation

In

March 2017,

Dennis Di Ricco surrendered his options to purchase up to

7,000,000

shares of Common Stock for forfeiture or cancellation. See Note

4.

In

March 2017,

the board of directors of the Company (the “Board”) consented to the grant of options to purchase an aggregate of

3,600,000

shares of Common Stock to

13

people (employees and current and prospective Board members). The options will vest over a

three

-year period, and the exercise price will be determined based on the average of the trading price of the Company’s Common Stock for the

first

ten

days following the close of the IPO. The options will be granted upon determination of the exercise price.

Stock option activity is as follows:

				Weighted		Weighted
				Average		Average
	Number of			Exercise		Remaining
	Shares			Price		Contractual Life (years)
Outstanding at December 31, 2016		33,775,000		$	0.10
Granted		-
Forfeited		(7,000,000	)
Outstanding at March 31, 2017		26,775,000		$	0.10		4.7
Exercisable at March 31, 2017		19,884,268		$	0.10		4.1

Stock-based compensation expense was

$606,216

and

$637,741

for the

three

months ended

March 31, 2017

and

2016,

respectively, and is included in general and administrative expense in the accompanying unaudited consolidated statements of operations. As of

March 31, 2017,

the Company expects to recognize

$3,820,600

of stock-based compensation for the non-vested outstanding options over a weighted-average period of

2.25

years.