8. Stock Option Plans and Agreements

3 Months Ended

Mar. 31, 2017

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

Stock Option Plans and Agreements

The Company has approved stock options plans and agreements covering up to an aggregate of 9,786,000 shares of common stock. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock based compensation consists of charges for stock option awards to employees, directors and consultants.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were used for the three months ended March 31, 2017 and 2016:

	2017	2016
Risk-free interest rate	1.50%	1.07%
Expected dividend yield	0%	0%
Expected stock price volatility	100%	100%
Expected life of options	2.75 years	2.50 years

The Company recorded expense for options issued to employees and independent service providers of $7,120 and $6,764 for the three months ended March 31, 2017 and 2016, respectively.

At March 31, 2017, there was approximately $10,700 of total unrecognized compensation cost related to non-vested options. That cost is expected to be recognized over a weighted average period of approximately one year. The total fair value of shares that vested during the three months ended March 31, 2017 was approximately $4,000.

A summary of all stock option activity for the three months ended March 31, 2017 follows:

	Number of Options Outstanding			Weighted Average Exercise Price	Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2016	8,583,000		$	0.12
Granted	150,000		$	0.045
Expired	(22,500	)	$	0.26
Forfeited	(12,500	)	$	0.04
Outstanding at March 31, 2017	8,698,000		$	0.12	4.0 years	2,700
At March 31, 2017:
Vested or expected to vest	6,310,000		$	0.09	5.1 years	2,700
Exercisable	6,110,000		$	0.09	5.1 years	2,700