STOCK OPTION PLAN AND STOCK-BASED COMPENSATION | NOTE 7 – STOCK OPTION PLAN AND STOCK-BASED COMPENSATION During the year ended December 31, 2010, the Company adopted a stock option plan entitled "The 2010 Stock Plan" (2010 Plan) under which the Company may grant Options to Purchase Stock, Stock Awards or Stock Appreciation Rights up to 15% of common stock, automatically adjusted on January 1 each year. As of December 31, 2018, there were no outstanding awards under the 2010 Plan. As of September 30, 2019, there were 293,000 outstanding stock options with a fair market value of $228,058 and 108,000 shares issued with a fair market value of $34,600 at the time of award. An additional 463,000 shares with a fair Market Value of $532,418 at the time of award, had not yet been issued on September 30, 2019, and are allocated to Current Liabilities (Note 4). At December 31, 2018, there were no outstanding stock options, nor any shares awarded. Under the terms of the stock plans, the Board of Directors shall specify the exercise price and vesting period of each stock option on the grant date. Vesting of the options is typically immediate and the options typically expire in five years. Stock Awards may be directly issued under the Plan (without any intervening options). Stock Awards may be issued which are fully and immediately vested upon issuance. Shares Awarded and Issued: On November 2, 2018, the Company granted 4,000 shares with a fair market value of $0.51 to four members of the Company Board as compensation for their contribution in the Company's Board of Directors, for a total of $2,040. The shares were issued on September 13, 2019. On March 11, 2019 the Company granted 100,000 shares with a fair market value of $0.27, to a consultant as compensation for their work with the Company's IR, for a total of $26,600. The shares were issued on September 4, 2019. On May 17, 2019, the Company granted 4,000 shares with a fair market value of $1.49 to four members of the Company Board as compensation for their contribution in the Company's Board of Directors, for a total of $5,960. The shares were issued on September 13, 2019. Shares Awarded, but not yet Issued: On November 6, 2018, the Company granted 1,000 shares with a fair market value of $0.52 to one member of the Audit Committee as compensation for his contribution in this Company Committee, for a total of $520. On November 29, 2018, the Company granted 4,000 shares with a fair market value of $1.00 to four members of the Audit Committee as compensation for his contribution in this Company Committee, for a total of $4,000. On March 7, 2019, the Company granted 3,000 shares with a fair market value of $0.27 to three members of the Audit Committee as compensation for his contribution in this Company Committee, for a total of $810. On May 10,2019 the Company granted 3,000 shares with a fair market value of $1.00 to three members of the Audit Committee as compensation for his contribution in this Company Committee, for a total of $3,000. On June 11, 2019 the Company granted 250,000 shares with a fair market value of $1.39 to a Financial Advisory Board Member for his contribution in the Company's Advisory Board, for a total of $347,500. On July 16, 2019 the Company granted 100,000 shares with a fair market value of $1.00 to a Financial Advisory Board Member for his contribution in the Company's Advisory Board, for a total of $100,000. On July 15, 2019 the Company granted 100,000 shares with a fair market value of $0.75 to a Financial Advisory Board Member for his contribution in the Company's Advisory Board, for a total of $75,000. On August 9, 2019, the Company granted 2,000 shares with a fair market value of $0.80 to two members of the Audit Committee as compensation for his contribution in this Company Committee, for a total of $1,600. The fair value of stock awards granted for the nine months ended September 30, 2019 was calculated based on stocks trading value at the date earned. Shares Fair Value Weighted Shares Granted as of December 31, 2018 - $ - $ - Shares Granted 571,000 0.27 - 1.49 0.99 Shares Issued 108,000 0.27 - 1.49 0.32 Shares Granted not Issued as of September 30, 2019 463,000 $ 0.75 - 1.39 $ 1.15 For the three and nine months ended September 30, 2019, the Company recorded stock-based compensation expense of $34,600 and $34,600, respectively, in connection with share-based payment awards. The Company did not record any recorded stock-based compensation expense during 2018. The granted, but not yet registered 463,000 shares for a total of $532,418 were allocated to Current Liabilities. See Un-issued shares liability under Note 4. Stock options granted: On May 1, 2019, the Company granted 45,000 three-year options at an exercise price of $1.21, to a Medical Advisory Board Member for his contribution in the Company's Advisory Board. The options total fair value at the time of award was $44,820. The options were issued on September 3, 2019. On July 1, 2019 the Company granted 3,000 three-year options at an exercise price of $1.09 to a Medical Advisory Board Member for his contribution in the Company's Advisory Board. The options total fair value at the time of award was $2,447. The options were issued on September 3, 2019. On August 1, 2019 the Company granted 45,000 three-year options at an exercise price of $1.10 a Medical Advisory Board Member for his contribution in the Company's Advisory Board. The options total fair value at the time of award was $39,731. The options were issued on September 3, 2019. On July 9, 2019 the Company granted 200,000 three-year options at an exercise price of $0.95 to two Financial Advisory Board Members for their contribution in the Company's Advisory Board. The options total fair value at the time of award was $141,060. The options were issued on September 13, 2019. The fair value of stock options granted and revaluation of non-employee consultant options for the nine months ended September 30, 2019 was calculated with the following assumptions: 2019 Risk-free interest rate 1.68 - 2.31 % Expected dividend yield 0 % Volatility factor (weekly) 126.89 % Expected life of option 3 years For the three and nine months ended September 30, 2019, the Company recorded compensation expense of $228,058 and $228,058, respectively, in connection with awarded stock options. The Company did not record any awarded option valuation as compensation expense during 2018. As of September 30, 2019, there was no unrecognized compensation expense related to non-vested stock option awards. The following table summarizes the Company's stock option activity during the nine months ended September 30, 2019: Shares Exercise Weighted Outstanding as of December 31, 2018 - $ - $ - Granted 293,000 0.95 - 1.21 1.01 Exercised - - - Options forfeited/cancelled - - - Outstanding as of September 30, 2019 293,000 $ 0.95 - 1.21 $ 1.01 The following table summarizes information about stock options that are vested or expected to vest at September 30, 2019: Options Outstanding Exercisable Options Exercise Number of Options Weighted Average Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Number of Options Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic $ 0.95 200,000 $ 0.95 2.95 $ - 200,000 $ 0.95 2.93 $ - 1.09 3,000 1.09 2.75 - 3,000 1.09 2.75 - 1.10 45,000 1.10 2.84 - 45,000 1.10 2.84 - 1.21 45,000 1.21 2.58 - 45,000 1.21 2.58 - $ 1.03-1.21 293,000 $ 1.01 2.88 $ - 293,000 $ 1.01 2.88 $ - The following table sets forth the status of the Company's non-vested stock options as of September 30, 2019 and December 31, 2018: Number of Weighted- Non-vested as of December 31, 2018 - $ - Granted 293,000 0.78 Forfeited - - Vested 293,000 0.78 Non-vested as of September 30, 2019 - $ - The weighted-average remaining contractual life for options exercisable at September 30, 2019 is 2.88 years. The aggregate intrinsic value for fully vested, exercisable options was $0 at September 30, 2019. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2019 was $0 as no options were exercised. The actual tax benefit realized from stock option exercises during the nine months ended September 30, 2018 was $0 as no options were exercised. At September 30, 2019 the Company has 11,901,551 options or stock awards available for grant under the 2010 Plan. |