Annual report pursuant to Section 13 and 15(d)

STOCK OPTIONS AND WARRANTS

v3.3.1.900
STOCK OPTIONS AND WARRANTS
 12 Months Ended
Dec. 31, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
STOCK OPTIONS AND WARRANTS

NOTE 16. STOCK OPTIONS AND WARRANTS

Warrant activity. We have accounted for warrants as equity instruments in accordance with Emerging Issues Task Force (“EITF”) 00-19 (ASC 815-40) Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, and as such, they will be classified in stockholders’ equity as they meet the definition of “…indexed to the issuer’s stock” in EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company’s Own Stock . In prior years, we estimated the fair value of the warrants using the Black-Scholes option pricing model based on assumptions at the time of issuance.

A summary of warrant activity is as follows:

 

 

 

Common Stock

Warrants

 

 

Weighted Average

Exercise Price

 

Outstanding - January 1, 2014

 

 

616,667

 

 

$

0.56

 

Issued

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

Expired

 

 

(616,667

)

 

 

0.56

 

Outstanding - December 31, 2014

 

 

—

 

 

 

—

 

Issued

 

 

—

 

 

 

—

 

Exercised

 

 

—

 

 

 

—

 

Expired

 

 

—

 

 

 

—

 

Outstanding - December 31, 2015

 

 

—

 

 

$

—

 

Exercisable - December 31, 2015

 

 

—

 

 

$

—

 

Stock options. For the years ended December 31, 2015 and 2014, we issued 675,000 and 289,583 stock options, respectively. Stock options issued to members of our Board of Directors were 275,000 and 158,333 or the years ended December 31, 2015 and 2014, respectively.   The stock options granted in 2015 were calculated to have a fair value of $76,227 using the Black-Scholes option pricing model with the following assumptions:

 

 

 

Options issued year ended

December 31, 2015

Dividend yield

 

0%

Expected volatility

 

84% - 85%

Risk free interest rate

 

1.18% - 1.81%

Expected life (years)

 

5

 

A summary of stock option activity is as follows:

 

 

 

Common Stock

Options

 

 

Weighted Average

Exercise Price

 

Outstanding - January 1, 2014

 

 

100,000

 

 

$

0.25

 

Issued

 

 

281,250

 

 

 

0.41

 

Exercised

 

 

—

 

 

 

—

 

Expired

 

 

—

 

 

 

—

 

Outstanding - December 31, 2014

 

 

381,250

 

 

 

0.36

 

Issued

 

 

675,000

 

 

 

0.23

 

Exercised

 

 

—

 

 

 

—

 

Expired

 

 

—

 

 

 

—

 

Outstanding - December 31, 2015

 

 

1,056,250

 

 

$

0.28

 

Exercisable - December 31, 2015

 

 

225,000

 

 

$

0.18

 

Share-based compensation.  The cost of all stock options and stock grants issued have been classified as share-based compensation on the statement of operations for the years ended December 31, 2015 and 2014.  Total share-based compensation was $119,677 and $323,759 for the years ended December 31, 2015 and 2014, respectively.