7. Stock Option Plans and Agreements

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Stock Option Plans and Agreements

The Company has approved stock options plans and agreements covering up to an aggregate of 11,255,000 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.

On August 20, 2019, the Company’s board of directors approved the 2019 stock option plan, which grants options to purchase up to an aggregate of 1,500,000 common shares. As of September 30, 2019, 1,371,500 options to purchase shares remain unissued under the 2019 plan. Options issued to date are nonqualified since the Company has decided not to seek stockholder approval of the 2019 Plan.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Options for 2,973,500 shares were granted for the nine months ended September 30, 2019. No options were granted for the nine months ended September 30, 2018. The following assumptions were used for the nine months ended September 30, 2019.

Risk-free interest rate	1.38% - 2.55	%
Expected dividend yield	0	%
Expected stock price volatility	100	%
Expected life of options	2.75 - 3.90 years

The Company recorded expense for options issued to employees of $5,796 and related-party loan financing consideration of $14,250 for the nine months ended September 30, 2019 and $0 for the nine months ended September 30, 2018.

At September 30, 2019, there was $0 of total unrecognized compensation cost related to non-vested options. No options vested during the nine months ended September 30, 2019.

A summary of all stock option activity for the nine months ended September 30, 2019 follows:

	Number of Options Outstanding			Weighted Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2018		7,920,000		$	.09
Granted		2,973,500			.02
Forfeited		(938,000	)		.23
Expired		(75,000	)		.17
Outstanding at September 30, 2019		9,880,500		$	.05	4.1 years	$	206,400
At September 30, 2019 - vested or
expected to vest		9,880,500		$	.05	4.1 years	$	206,400
Exercisable		9,755,500		$	.05	4.1 years	$	202,300