XML 23 R12.htm IDEA: XBRL DOCUMENT

Stock Options

6 Months Ended

Jun. 30, 2018

Stock Options

Note 7 – Stock Options

Stock option activity for the six months ended June 30, 2018, is summarized as follows:

		Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (Years)
Options outstanding at December 31, 2017			5,750,500			$	0.31				4.12
Granted			3,130,000				0.12				—
Warrants Converted to Common Stock Options			2,300,000				0.12				—
Expired/forfeited			—				—				—
Terminated for Repricing			(3,675,000	)			0.16
Reissued for Repricing			3,675,000				0.12
Options outstanding at June 30, 2018			11,180,500			$	0.20				7.02

Total stock option compensation for the six months ended June 30, 2018 and 2017 was $444,800 and $0, respectively. There is no unrecognized compensation expense associated with the options.

On May 30, 2018, the Board of Directors agreed to extend all outstanding management stock options and warrants (covering 5,975,000 shares) to a common expiration date of June 30, 2026 and adjust the exercise prices to $0.12. The warrants converted to common stock options and the options terminated and reissued for repricing were accounted for as modifications of the original instruments. The net effect of the change in the value of the repriced options and warrants was an increase in stock-based compensation expense of $100,500. As part of this transaction, the management warrants for 2,300,000 shares were converted to stock options.

The Company also issued new, immediately vesting, stock options with an exercise price of $0.12 and an expiration date of June 30, 2026, to Richard Davis for 1,300,000 shares; Hank Leibowitz for 500,000 shares; John Hofmann for 800,000 shares; Richard McKee for 500,000 shares and Michael McKee for 30,000 shares. The fair market value of these options was determined to be $0.11 per option, or $344,300, which was recognized as stock-based compensation expense of $344,300.