Stock Option Plans and Agreements

6 Months Ended

Jun. 30, 2021

Stock Transactions

Note 10. Stock Option Plans and Agreements

Note 10. Stock Option Plans and Agreements

The Company has approved stock options plans and agreements covering up to an aggregate of 13,190,000 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. 1,705,000 options were granted for the six months ended June 30, 2021. 575,000 options were granted for the six months ended June 30, 2020. The following assumptions were used for the six months ended June 30, 2021.

Risk-free interest rate	0.16% -0.38%
Expected dividend yield	0%
Expected stock price volatility	100%
Expected life of options	2.75 – 5.25 years

The Company recorded expense for options issued to employees and independent service providers of $81,920 and $110,168 for the three and six months ended June 30, 2021, respectively ($16,850 and $18,980 in 2020).

The Company issued 750,000 performance-based stock options during the three months ended June 30, 2021 at $0.245 per share to an executive of the Company. Certain revenue targets must be made to grant the options in three tranches of 250,000 shares each. The unrecognized compensation expense for these options is approximately $135,800 at June 30, 2021.

1,165,000 options vested during the six months ended June 30, 2021.

A summary of all stock option activity for the six months ended June 30, 2021 follows:

	Number of Options Outstanding			Weighted Average Exercise Price		Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at December 31, 2020		12,430,500		$	.05
Granted		1,705,000			.21
Exercised		(284,000	)		.02
Forfeited		(823,000	)		.08
Expired		(45,000	)		.10
Outstanding at June 30, 2021		12,983,500		$	.07	3.3 years	$	2,006,500
At June 30, 2021 - vested or
expected to vest		12,983,500		$	.07	3.3 years	$	2,006,500
Exercisable		11,923,500		$	.06	3.2 years	$	1,965,000