| 7. Options and warrants | On September 8, 2015, the Company adopted the
2015 Incentive Compensation Plan ("the 2015 Plan") which authorizes up to 5,000,000 shares of common stock issuance to
certain employees and consultants as defined in the 2015 Plan and approved by the Company's Board of Directors. The 2015 Plan authorizes up to 5,000,000 shares
of common stock issuance to persons employed by the Company either as an employee, officer, director or independent consultant
or other person employed by the Company, provided that no person can be granted shares under the 2015 Plan for services related
to raising capital or promotional activities. There are no restrictions on resale upon the purchases of the stock from the employees
or the consultants, unless contained in the written award approved by the Board of Directors, or otherwise as provided by law.
During the three month periods ended March 31, 2017 and 2016, the Company did not grant any common stock options or warrants to
consultants, directors and employees under the 2015 Plan. As of March 31, 2017, 4,987,500 shares are available under the 2015 Plan
for future grants, awards, options or share issuance. There were 500,000 options granted to an officer
for past services during the three month period ended March 31, 2016. These options were issued outside of the 2015 Plan, have
an exercise price of $0.16 per share, fully vested on the grant date, expire 5 years from the date of grant and have a grant date
fair value of $0.06 per share. In addition, during the three month period
ended March 31, 2016, the officer was also granted an additional 500,000 options at an exercise price of $0.16 per share. As of
March 31, 2017, these options fully vested on February 19, 2017, have a grant date fair value of $0.06 per share and expire
5 years from the vesting date. The fair value of each option granted is estimated
on the date of grant using the Black Scholes model that uses assumptions noted in the following table. Expected volatility is based
on the Company's historical market price at consistent points in periods equal to the expected life of the options. The expected
term of options granted is based on the Company's historical experience. The risk-free interest rate for the periods within the
contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimates
forfeitures; both at the date of grant as well as throughout the requisite service period, based on the Company's historical experience
and future expectations. The following table represents our stock option
and warrant activity for the three month period ended March 31, 2017:
Shares
Weighted Prices
Weighted Average Remaining Contractual Life Aggregate Intrinsic Value
Outstanding
Outstanding at December 31, 2016 5,610,000 $ 0.17 3.62 -
Options and warrants granted - $ - - -
Options and warrants cancelled or expired - $ - - -
Outstanding at March 31, 2017 5,610,000 $ 0.17 3.38 2,934,000
Exercisable at March 31, 2017 5,610,000 $ 0.17 3.38 2,934,000 Net cash proceeds from the exercise of options
and warrants were $0 for each of the three month periods ended March 31, 2017 and 2016. Stock based compensation was $4,024 and
$33,750 for the three month periods ended March 31, 2017 and 2016, respectively. |
