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Stock Options
 9 Months Ended
Sep. 30, 2018
Stock Options  
Stock Options

Note 7 – Stock Options

 

Stock option activity for the nine months ended September 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 cancelled and replaced with Common Stock Options     2,300,000       0.12       —  
Cancelled for Repricing     (3,675,000 )     0.16          
Reissued for Repricing     3,675,000       0.12          
Options outstanding at September 30, 2018     11,180,500     $ 0.20       7.02  

 

Total stock-based compensation for the nine months ended September 30, 2018 and 2017 was $480,649 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 and non-employee 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 (“adjusted terms”). The 2,300,000 warrants were cancelled and replaced with common stock options and the 3,675,000 options were terminated and reissued with the adjusted terms. These transactions 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 incremental increase in stock-based compensation expense of $136,349.

 

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.