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Stock Options

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 15 – Stock Options

On July 30, 2014, the Company’s board of directors approved the Company’s 2014 Equity Incentive Plan and the reservation of 15,525,000 shares of common stock for issuance under such plan. Such plan was approved by the Company’s shareholders and became effective on August 5, 2015.

On April 2, 2014, the Company granted 1,000,000 options with an exercise price of $0.25 per share to the Company owned by Mr. Jack Ross, Chief Executive Officer of the Company.

On December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.25 per share to two Board Members of the Company.

On December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.65 per share to two employees of the Company.

On February 18, 2016, the Company granted 300,000 options with an exercise price of $0.70 per share to an employee of the Company.

On April 18, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company.

On July 4, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company. During 2017 333,333 unvested options were cancelled due to termination of employee.

On October 10, 2017, the Company granted 1,000,000 options with an exercise price of $0.70 per share to an employee of the Company.

On October 16, 2017, the Company granted 1,500,000 options with an exercise price of $0.55 per share to an employee of the Company.

On October 18, 2017, the Company granted 200,000 options with an exercise price of $0.70 per share to an employee of the Company.

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees and consultants under a stock option plan at December 31, 2017:

				Options Outstanding												Options Exercisable
Exercise Price ($)				Number Outstanding				Weighted Average Remaining Contractual Life (Years)				Weighted Average Exercise Price ($)				Number Exercisable				Weighted Average Exercise Price ($)
$	0.25 - 0.70				8,666,667				7.21			$	0.51				5,941,667			$	0.46

The stock option activity for the year ended December 31, 2017 is as follows:

		Options Outstanding				Weighted Average Exercise Price
Outstanding at December 31, 2015			5,000,000			$	0.41
Granted			2,300,000				0.50
Exercised			-				-
Expired or canceled			(1,000,000	)			(0.25	)
Outstanding at December 31, 2016			6,300,000			$	0.47
Granted			2,700,000				0.62
Exercised			-				-
Expired or canceled			(333,333	)			(0.70	)
Outstanding at December 31, 2017			8,666,667			$	0.51

Stock-based compensation expense related to vested options was $1,458,850 and $2,200,160 during the years ended December 31, 2017 and 2016, respectively. The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2016 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: estimated fair value of Company’s common stock of $0.40-0.61, risk-free interest rate of 0.90-1.24%, volatility of 135-160%, expected lives of 3-6 years, and dividend yield of 0%. The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2017 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: estimated fair value of Company’s common stock of $0.48-0.50, risk-free interest rate of 1.95-1.99%, volatility of 116-117%, expected lives of 10 years, and dividend yield of 0%. Stock options outstanding as of December 31, 2017, as disclosed in the above table, have an intrinsic value of $711,900.