Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Share Based Compensation

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Note 9 - Share Based Compensation
9 Months Ended
Sep. 30, 2018
Notes  
Note 9 - Share Based Compensation

NOTE 9 – SHARE BASED COMPENSATION

 

During the year ended December 31, 2017, the Company issued 5-year options to purchase 5,570,000 shares of common stock to employees and directors under the 2017 Stock Incentive Plan.  The options were valued at $1,557,089 using the Black-Scholes pricing model.  During the nine months ended September 30, 2018, the Company issued 5-year options to purchase 4,740,200 shares of common stock to an employee under the 2017 Stock Incentive Plan and cancelled 277,173 unvested options.  The issued options were valued at $1,127,292 using the Black-Scholes pricing model.  As of September 30, 2018, the total unrecognized expense for unvested share based compensation was $1,835,557.  The 2017 Stock Incentive Plan allows for a maximum 25,000,000 shares to be issued, of which 14,966,973 shares remain available for issuance as of September 30, 2018.

 

The fair values at the commitment date for the options were based upon the following management assumptions as of September 30, 2018:

 

 

 

Commitment Date

 

Expected dividends

 

 

0

%

Expected term

 

 

5 years

 

Risk free rate

 

 

1.73 – 2.80

%

 

The activity of options granted to during the nine months ended September 30, 2018 is as follows:

 

 

 

Employee and Director Options Outstanding

 

 

Weighted Average Exercise Price

 

Weighted Average Remaining Life

 

 

Weighted Average Grant Date Fair Value

 

 

Intrinsic Value

Beginning Balance – December 31, 2017

 

5,570,000

 

$

0.60

 

5 years

 

$

0.28

 

 

 

Granted

 

4,740,200

 

$

0.60

 

5 years

 

$

0.24

 

 

 

Exercised

 

-

 

 

 

 

 

 

 

 

 

 

 

Cancelled

 

(277,173)

 

$

0.60

 

4.33 years

 

$

0.28

 

 

 

Ending Balance – September 30, 2018

 

10,033,027

 

$

0.60

 

3.76 years

 

$

0.26

 

$

-

Exercisable options

 

3,127,420

 

$

0.60

 

3.76 years

 

$

0.26

 

$

-

 

The weighted average fair value per option issued during the nine months ended September 30, 2018 and the year ended December 31, 2017 was $0.23 and $0.28, respectively.

 

The following table summarizes non-vested option activity during the nine months ended September 30, 2018:

 

 

 

Non-Vested Options

 

 

Weighted Average Grant Date Fair Value

Beginning Balance – December 31, 2017

 

5,177,042

 

$

0.28

Granted

 

4,740,200

 

$

0.10

Vested

 

(3,127,420)

 

 

 

Forfeited

 

(277,173)

 

 

 

Ending Balance – September 30, 2018

 

6,905,607

 

$

0.25