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Stock options
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
7. Stock options

At the Company's 2006 Annual Meeting of Stockholders, the stockholders approved the 2006 Stock Incentive Plan (the "Plan").  The Plan permits the issuance of stock options, restricted stock awards, and performance shares to employees, officers, directors, and consultants of the Company.  Initially, and until such time as the Board creates a Compensation Committee, the Board of Directors will administer the Plan.  The total number of shares of common stock that may be issued pursuant to awards under the Plan is 5,000,000.  Under the Plan, no participant may receive awards of stock options that cover, in the aggregate, more than 500,000 shares of common stock in any fiscal year.  The plan terminated on June 5, 2016.

 

The Company expenses the cost of options granted over the vesting period of the option based on the grant-date fair value of the award.  Option fair values are estimated at the grant date using the Black-Scholes option valuation model.  The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable.  For purposes of determining the expected life of the options, the Company utilizes the Simplified Method as defined in Staff Accounting Bulletin No. 107 issued by the Securities and Exchange Commission.  In addition, the Black-Scholes option valuation model requires the input of other highly subjective assumptions including stock price volatility.

 

On June 1, 2016 the Company issued options to purchase a total of 1,150,000 shares of the Company's common stock under the 2006 Stock Incentive Plan for services rendered to the Company, including capital formation, prospective deal origination, evaluation, due diligence, and administrative support. The options immediately vested and expire after 2 years. Options totaling 600,000 have a strike price of $0.15, with the remainder 550,000 having a strike price of $.25. The Company recorded an expense of $65,660 for the options; $27,500 related to options with a strike price of $0.25 and $38,160 related to options with a strike price of $0.15.

 

A summary of the Company's Incentive Plan as of December 31, 2016 and changes during the year is presented below:

 

          Weighted Average  
    Options     Exercise Price  
             
Outstanding at Beginning of Year 2015     6,250     $ 2.56  
                 
Granted     0          
                 
Cancelled or Exercised     0     $ 0  
                 
Outstanding at End of Year 2015     6,250     $ 2.56  
                 
Granted     600,000     $ 0.15  
                 
Granted     550,000     $ 0.25  
                 
Cancelled or Exercised     2,083     $ 1.44  
                 
Outstanding at End of Year 2016     1,154,167     $ 0.21  

 

The following table summarizes information about stock options outstanding at December 31, 2016:

 

    Options Outstanding   Options Exercisable  
          Weighted                  
          Average   Weighted           Weighted  
Range of   Number     Remaining   Average     Number     Average  
Exercise   Outstanding     Contractual   Exercise     Exercisable     Exercise  
Prices   at 12/31/16     Life   Price     at 12/31/16     Price  
                             
$0.15 - $3.12     1,154,167     1.42 years   $ 0.21       1,154,167     $ 0.21