Note P - Stock Options

12 Months Ended

Dec. 31, 2015

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

NOTE P—STOCK OPTIONS

1999 Stock Option Plan

During 1999, the Board of Directors of the Company adopted the 1999 Stock Option Plan (the 1999 Plan). The 1999 Plan was not presented to stockholders for approval and thus incentive stock options are not available under the plan. Under the 1999 Plan, 1,000,000 shares of common stock are reserved for issuance to employees, officers, directors, and consultants of the Company at exercise prices which may not be below 85% of fair market value. The term of nonstatutory stock options granted may not exceed ten years. Options issued under the Plan vest pursuant to the terms of stock option agreements with the recipients. In the event of a change in control, as defined, all options outstanding vest immediately. The 1999 Plan expired in August 2009.

2004 Stock Option Plan

On October 12, 2004, the Board of Directors of the Company approved the 2004 Stock Option Plan (the 2004 Plan). The 2004 Plan has not yet been presented to stockholders for approval and thus incentive stock options are not available under this plan. Under the terms of this plan, 2,000,000 post-split shares of common stock are reserved for issuance to employees, officers, directors, and consultants of the Company at exercise prices which may not be below 85% of fair market value. The term of stock options granted may not exceed ten years. Options issued under the Plan vest pursuant to the terms of stock option agreements with the recipients. In the event of a change in control, as defined, all options outstanding vest immediately. The Plan expired in October 2014.

2015 Stock Option Plan

On January 27, 2016, the shareholders approved the 2015 Equity Incentive Plan (the 2015 Plan). Under the terms of this plan, 8,000,000 post-split shares of common stock are reserved for issuance to employees, officers, directors, and consultants of the Company at exercise prices which may not be below 100-110% of fair market value. The term of stock options granted may not exceed ten years. Options issued under the Plan vest pursuant to the terms of stock option agreements with the recipients. In the event of a change in control, certain stock awards issued under this plan may be subject to additional acceleration of vesting as may be provided in the participants’ written agreement. The Plan expires in December 2025.

Non-Plan Stock Options

Periodically, the Company has granted options outside of the 1999 and 2004 Plans to various employees and consultants. In the event of change in control, as defined, certain of the non-plan options outstanding vest immediately.

Stock Option Activity

Information summarizing option activity is as follows:

	Number of Options											Weighted average exercise		Weighted average remaining life		Aggregate intrinsic
	1999 Plan		2004 Plan			Non Plan			Total			price		(in years)		value

Outstanding, as of December 31, 2013		250,000		1,845,304			600,000			2,695,304		$	0.33

Granted		—		—			1,835,000			1,835,000			0.39
Exercised		—		(54,166	)		—			(54,166	)		0.25
Forfeited		—		(129,168	)		(225,000	)		(354,168	)		0.34
Expired		—		(26,665	)		—			(26,665	)		0.29
Outstanding, as of December 31, 2014		250,000		1,635,305			2,210,000			4,095,305		$	0.36		4.45	$	24,325

Granted		—		—			1,428,000			1,428,000			0.18
Exercised		—		—			—			—
Forfeited		—		(41,667	)		(462,585	)		(504,252	)		0.31
Expired		—		(573,638	)		(66,582	)		(640,220	)		0.25
Outstanding, as of December 31, 2015		250,000		1,020,000			3,108,833			4,378,833		$	0.32		4.57	$	240
Subject to vesting at December 31, 2015										3,628,853		$	0.34		4.22	$	129
Exercisable at December 31, 2015										1,931,653		$	0.38		2.94	$	0

The options outstanding and exercisable at December 31, 2015 were in the following exercise price ranges:

				Options Outstanding						Options Exercisable
Range of exercise prices				Number of shares		Weighted average exercise price		Weighted average remaining life (in years)		Number exercisable		Weighted average exercise price
$	0.15	-	0.40		2,893,000	$	0.24		4.68		1,244,167	$	0.28
	0.41	-	0.79		1,280,833		0.41		5.18		482,486		0.41
	0.80	-	0.92		205,000		0.90		1.02		205,000		0.90
$	0.15	-	0.92		4,378,833						1,931,653

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.16 as of December 31, 2015, which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options exercisable as of December 31, 2015 was 0.

The weighted average fair value of options granted during the years ended December 31, 2015 and 2014 was $0.14 and $0.32 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2015 and 2014 was $0 and 14,650, respectively. The total fair value of shares vested during the years ended December 31, 2015 and 2014 was $265,247 and $143,382 respectively.

As of December 31, 2015, future compensation cost related to nonvested stock options is $318,177 and will be recognized over an estimated weighted average period of 1.50 years.