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9. Stock Options
 6 Months Ended
Jun. 30, 2014
Notes  
9. Stock Options

9.             Stock Options

 

In April 2014 the Company established a stock option plan to authorize the granting of stock options to officers and employees. Upon exercise of the options shares are issued from the available authorized shares of the the Company.

 

On April 30, 2014, 2,250,000 options were issued to management, 750,000 options vested immediately and the remaining 1,500,000 vested at a rate of 750,000 each year on the anniversary for 2 additional years, and they expire after 3 years. Each option allows the holder to purchase one share of the Company’s stock at $0.10 prior to expiration. Utilizing the Black Scholes option pricing model, an expected life of three years, a risk free rate of 0.87%, and expected volatility of 170.80% compensation cost of $173,250 is associated with the options. Of this $57,750 was recorded as a general and administrative expense in the second quarter of 2014 and a like amount will be recorded in 2015 and 2016 related to these options.

 

 

 

 

Number of Options

 

Exercise Prices

Balance January 1, 2014

 

0

 

0

Issued

 

2,250,000

$

0.10

Balance June 30, 2014

 

2,250,000

$

0.10

Exercisable at June 30, 2014

 

750,000

$

0.10

 

 

These options expire as follows:

 

 

Options

Exercise Price

Expiration Date

750,000

$0.10

April 30, 2017

750,000

$0.10

April 30, 2018

750,000

$0.10

April 30, 2019