SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2018

Share-based Compensation [Abstract]

SHARE-BASED COMPENSATION

2.         SHARE-BASED COMPENSATION

Share-Based Compensation – Contractors

For the nine months ended September 30, 2018 and 2017, share-based compensation expense totaled approximately $46,000 and $65,000, respectively.

There was no related income tax benefit recognized because our deferred tax assets are fully offset by a valuation allowance.

We determine the fair value of option grant share-based awards at their grant date, using a Black-Scholes-Merton Option-Pricing Model applying the assumptions in the following table:

	Nine months ended September 30,
	2018		2017
Expected life (years)		N/A		5
Dividend yield		N/A		0	%
Expected volatility		N/A		80	%
Risk free interest rates		N/A		1.97	%
Weighted average fair value of options at grant date		N/A	$	0.02980

For the nine months ended September 30, 2018, no options to purchase stock were granted, additionally, no options to purchase stock were exercised, expired or forfeited; no restricted stock units were granted, vested or forfeited; and no restricted stock awards were granted, vested or forfeited. At September 30, 2018, options to purchase 14,000,000 shares of common stock were outstanding with a weighted average exercise price of $0.136 with a weighted average remaining contract term of approximately 3.5 years with an aggregate intrinsic value of $103,000. At September 30, 2018 options for 3,500,000 shares were exercisable.

As of September 30, 2018, there was approximately $51,000 of unrecognized compensation cost related to unvested stock options granted and outstanding, net of estimated forfeitures. The cost is expected to be recognized on a weighted average basis over a period of approximately three years.

During the nine months ended September 30, 2017 the company granted each member of the Scientific Advisory Board options to purchase 2 million shares of $.001 par value common stock at a price of $0.05 per share for a total of 8,000,000 shares being granted. These options have a five year term and vest to the extent of 500,000 shares on the first anniversary of the grant and to the extent of 62,500 options per month during the 24 months following the initial vesting date.

During the nine months ended September 30, 2017 the company also granted each member of the Scientific Advisory Board performance options to purchase 1.5 million shares of $0.001 par value common stock at a price of $0.25 per share for a total of 6,000,000 shares being granted. These options have a five year term and vest on the date the company has cumulative revenues of $5 million.

On July 16, 2018, the company entered into a Master Services Agreement (the “Agreement”) with Westpark Advisors, LLC. The Agreement calls for Westpark Advisors to perform certain development and operational services, subject to a minimum hours requirement of 1,920, as follows:

In exchange for services detailed in the Agreement, Westpark Advisors is to receive compensation as follows: $16,700 per month in cash; upon signing of the Agreement, options to purchase 250,000 shares of the Company’s common stock, at an exercise price of $0.13 per share, which vest every 90 days in four equal tranches and expire as to each tranche three years after the vesting date; and additional options to purchase one million shares of the Company’s common stock, at an exercise price of $0.13 per share, upon the successful award of a contract in excess of $500,000 which Westpark Advisors sourced, captured and pursued. The Agreement also calls for the Company to reimburse Westpark Advisors for all reasonable expenses that have been pre-approved in writing. The option agreements have not yet been issued.