Stock Options, Warrants and 401(k) Savings Plan

12 Months Ended

Dec. 31, 2015

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

Stock Options, Warrants and 401(k) Savings Plan

13.

Stock Options, Warrants and 401(k) Savings Plan

The Company follows FASB ASC 718, Share Based Payment, which requires that the cost resulting from all share-based payment transactions be recognized in the Company’s financial statements. FASB ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values.

The 1999 Stock Option Plan provided for the granting of up to 2,000,000 incentive and non-qualified stock options to employees, non-employee directors, consultants and advisors to the Company. In the case of options designated as incentive stock options, the exercise price of the options granted must be not less than the fair market value of such shares on the date of grant. Non-qualified stock options may be granted at any amount established by the Stock Option Committee or, in the case of Discounted Options issued to non-employee directors in lieu of any portion of an Annual Retainer, in accordance with a formula designated in the Plan. The 1999 Stock Option Plan terminated in February 2009 and no further stock options can be granted under the plan; however, options granted before the termination date could be exercised through their expiration date.

The Company uses the Black-Scholes option pricing model to calculate the grant-date fair value of an award. There was no compensation expense recognized during the years ended December 31, 2015 and December 31, 2014 and there was no unrecognized portion of expense at December 31, 2015.

A summary of stock options under the Company’s stock option plans follows:

			Weighted
		Exercise	Average
	Number of	Price Range	Exercise
	Shares	Per Share	Price
Outstanding at December 31, 2013	245,000	0.12	0.12
Options expired	245,000	0.12	0.12
Outstanding at December 31, 2014 and 2015	0	–	–
	Option
	Shares
Exercisable options at year end:
2015	0
Weighted average remaining contractual life (years)	–
Options available for future grant:
2015	0

At December 31, 2015, the Company had 756,365 warrants to purchase common stock of the Company outstanding at exercise prices ranging from $0.01 to $0.07 and expiring at various dates through July 2021. The warrants are held by ten investors who acquired convertible debentures from the Company in 2013 and 2014 and by three individuals who provided loans and professional services to the Company.

A summary of outstanding warrants follows:

				Weighted
		Exercise		Average
	Number of	Price Range		Exercise
	Shares	Per Share		Price
Outstanding at December 31, 2013	660,500	0.01 to 0.07		0.026
Warrants granted	166,365	0.02		0.02
Warrants canceled	24,500	0.03 and 0.07		0.037
Outstanding at December 31, 2014	802,365	0.01 to 0.07		0.025
Warrants expired	46,000	0.06 and 0.07		0.068
Outstanding at December 31, 2015	756,365	$0.01 to $0.07		$0.022
Weighted average remaining contractual life (years)	4.51
					Weighted
			Exercise		Average
			Price Range		Exercise
	Shares		Per Share		Price
Exercisable warrants at year end:
2015	590,000	$0.01 to $0.07		$0.023
Weighted average remaining contractual life (years)	4.23

At December 31, 2015, the Company has reserved 5,846,989 shares of common stock for possible future issuance upon exercise of 756,365 warrants and for the conversion of approximately $128,300 of convertible debentures and accrued interest into 5,090,624 shares of common stock.

The Company sponsors a 401(k) savings plan, covering substantially all employees, providing for employee and employer contributions. Employer contributions are made at the discretion of the Company. There were no contributions charged to expense during 2015 or 2014.