| Stock Options | On
July 1, 2015, the Board of Directors of the Company adopted the 2015 Stock Option and Stock Bonus Plan (the Plan).
The Board of Directors adopted this plan as it anticipates utilizing equity compensation as part of its ongoing standard corporate
operations and in connection with its contemplated activities going forward. Under
the Plan, the lesser of: (i) 20,000,000 shares; or (ii) 10% of the total number of the Companys common shares outstanding
are reserved to be issued upon the exercise of options or the grant of stock bonuses. As such, the Plan is subject to an
absolute cap of 20,000,000 shares. The Plan includes two types of options; options intended to qualify as incentive stock
options under Section 422 of the Internal Revenue Code of 1986, as amended are referred to as incentive options, and options which
are not intended to qualify as incentive options are referred to as non-qualified options. As
of March 31, 2016, 16,600,000 options and 2,000,000 shares of common stock have been granted under the Plan. The
Plan is administered by the Board of Directors, or a committee appointed by the Board of Directors. In addition to determining
who will be granted options or stock bonuses, the committee has the authority and discretion to determine when options and bonuses
will be granted and the number of options and bonuses to be granted. The committee also may determine a vesting and/or forfeiture
schedule for bonuses and/or options granted, the time or times when each option becomes exercisable, the duration of the exercise
period for options and the form or forms of the agreements, certificates or other instruments evidencing grants made under the
Plan. The committee may determine the purchase price of the shares of common stock covered by each option and determine the
fair market value per share. The committee also may impose additional conditions or restrictions not inconsistent with the
provisions of the Plan. The committee may adopt, amend and rescind such rules and regulations as in its opinion may be advisable
for the administration of the Plan. In
the event that a change, such as a stock split, is made in the Companys capitalization which results in an exchange or other
adjustment of each share of common stock for or into a greater or lesser number of shares, appropriate adjustments will be made
to unvested bonuses and in the exercise price and in the number of shares subject to each outstanding option. The committee
also may make provisions for adjusting the number of bonuses or underlying outstanding options in the event the Company effects
one or more reorganizations, recapitalizations, rights offerings, or other increases or reductions of shares of its outstanding
common stock. Options and bonuses may provide that in the event of the dissolution or liquidation of the Company, a corporate
separation or division or the merger or consolidation of the Company, the holder may exercise the option on such terms as it may
have been exercised immediately prior to such dissolution, corporate separation or division or merger or consolidation; or in the
alternative, the committee may provide that each option granted under the Plan shall terminate as of a date fixed by the committee. The
exercise price of any option granted under the Plan must be no less than 100% of the fair market value of the Companys
common stock on the date of grant. Any incentive stock option granted under the Plan to a person owning more than 10% of
the total combined voting power of the common stock must be at a price of no less than 110% of the fair market value per share
on the date of grant. The
exercise price of an option may be paid in cash, in shares of the Companys common stock or other property having a fair
market value equal to the exercise price of the option, or in a combination of cash, shares, other securities and property.
The committee determines whether or not property other than cash or common stock may be used to purchase the shares underlying
an option and shall determine the value of the property received. Stock
option transactions are summarized as follows:
Number
of Weighted Weighted Weighted
Average
$ $ (Years)
Outstanding, December 31, 2015 14,600,000 0.05 0.03
Options granted 15,000,000 0.08 0.05
Options expired (1,000,000 ) 0.10 0.03
Outstanding, March 31, 2016 28,600,000 0.06 0.04 3.42 The
fair values of the stock options granted during the three month periods ended March 31, 2016 and 2015 were estimated using the
Black-Scholes Option Pricing Model. The weighted average assumptions used in the pricing model for these options are as follows:
March
31, March
31,
Risk-free interest rate 0.81% 0.56%
Dividend yield 0.00% 0.00%
Expected stock price volatility 125.00% 125.00%
Expected forfeiture rate 0.00% 0.00%
Expected life 4.81 years 3.95 years The
following non-qualified stock options were outstanding and exercisable at March 31, 2016:
Expiry date Exercise Price
Number
of
Number
of Options
$
February 25, 2017 0.04 2,000,000 -
February 24, 2018 0.05 1,000,000 1,000,000
February 25, 2020 0.04 4,000,000 4,000,000
February 28, 2020 0.04 5,000,000 5,000,000
June 30, 2017 0.10 1,000,000 1,000,000
June 30, 2018 0.10 600,000 600,000
December 31, 2019 0.08 15,000,000 3,750,000
28,600,000 15,350,000 As
at March 31, 2016, the aggregate intrinsic value of the Companys stock options is $110,000 (December 31, 2015 $350,000).
The weighted average fair value of stock options granted during the three month period ended March 31, 2016 is $0.05 (2015 - $0.03). |
