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STOCK OPTIONS AND WARRANTS
 9 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
NOTE 10 - STOCK OPTIONS AND WARRANTS

On October 1, 2016 the Company granted 120,000 options to an employee of the Company as compensation for being appointed the US Finance Manager of the Company. The options have an exercise period of four years with an exercise price of $.20 per share. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly with 120,000 options fully vested as of September 30, 2017. The options were valued at $65,290 using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.58; Exercise price: $0.20; Option term: 4 years; Computed volatility: 159%. The Company expensed $16,636 in the year ended December 31, 2016. As of September 30, 2017 the Company has expensed an additional $48,654.

 

On January 1, 2017 the Company entered into an agreement whereby the employee was granted compensation of €1,000 per month and an annual retainer of 250,000 stock options as compensation for being appointed the International Finance Manager of the Company. The options have an exercise period of four years with an exercise price of $0.10. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly, with a total of 187,500 options fully vested as of September 30, 2017. The options were valued at $195,307 using the Black Scholes Option Pricing Model with the following inputs: stock price on measurement date: $0.82; Exercise price: $0.10; Option term: 4 years; Computed volatility: 136.76%. The fair value of the options will be amortized over a year with $146,079 expensed during the nine months ended September 30, 2017.

 

On January 3, 2017 the Company determined to create an advisory board and appointed Mr. Orestes Varvitsiotes as its first member. Mr. Varvitsiotes is a registered broker dealer who is currently engaged with Aegis Capital Corp. In connection therewith, the Company entered into an Advisory Board Member Consulting Agreement, dated as of January 3, 2017 whereby an annual retainer of 120,000 stock options was granted as compensation for services. The options have an exercise period of five years with an exercise price of $0.20. In the event that he ceases to work for the Company for any reason, he will be entitled to a pro rata portion of the annual options. The options vest monthly, with a total of 90,000 options fully vested as of September 30, 2017. The options were valued at $94,830 using the Black Scholes Option Pricing Model, with the following inputs: stock price on measurement date: $0.82; Exercise price: $0.20; Option term: 5 years; Computed volatility: 155.37%. The fair value of the options will be amortized over the year with $70,796 expensed during the nine months ended September 30, 2017.

 

A summary of the Company’s option activity during the nine months ended September 30, 2017 is presented below:

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
Options   Shares     Price     Term     Value  
Balance Outstanding, December 31, 2016     120,000     $ 0.20       3.75     $ 74,400  
Granted     370,000       .13       3.58       150,800  
Forfeited     -       -       -       -  
Exercised     -       -       -       -  
Expired     -       -       -       -  
Balance Outstanding, September 30, 2017     490,000     $ .15       3.44       191,600  
                                 
Exercisable, September 30, 2017     397,500     $ .15       3.41     $ 153,900  

 

In connection with a private placement that took place on April 7, 2017, the Company issued warrants at a 1:1 ratio for shares purchased by investors. The warrants were valued using the Black Scholes valuation model. A summary of the Company’s warrant activity for the nine months ending September 30, 2017 is as follows:

 

     September 30,
2017		  
Volatility     76.66%-90.86 %
Expected term (in years)     1  
Risk-free interest rate     1.07% - 1.11 %
Expected dividend yield     None  

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
Warrants   Shares     Price     Term     Value  
Balance Outstanding, December 31, 2016     -     $ -       -     $ -  
Granted     100,400       3.00       1       -  
Forfeited     -       -       -       -  
Exercised     -       -       -       -  
Expired     -       -       -       -  
Balance Outstanding, September 30, 2017     100,400     $ 3.00       .55     $ -  
                                 
Exercisable, September 30, 2017     100,400     $ 3.00       .55     $ -