Stock Options

6 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options

11. Stock Options

The Company adopted a stock option plan (“Plan”). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promote the success of its business. It is intended that options issued under this Plan constitute non-qualified stock options. The general terms of awards under the option plan are that 100% of the options granted will vest the year following the grant. The maximum term of options granted is 5 years.

The Company may issue stock options to provide incentives to directors, key employees and other persons who contribute to the success of the Company. The exercise price of all incentive options are issued for not less than fair market value at the date of grant.

The following table summarizes the Company’s stock option activity for the year ended December 31, 2017 and the six-month period ended June 30, 2018:

	Number of shares			Exercise price per share		Weighted average exercise price
Balance, December 31, 2016		813,000		$	0.75 - $2.22	$	1.19
Granted		154,000		$	1.70	$	1.70
Cancelled or expired		(114,000	)	$	1.00 – 2.22	$	1.75
Exercised		(140,000	)	$	0.75 – 1.21	$	1.11
Balance, December 31, 2017		713,000		$	0.75 – 1.70	$	1.21
Granted		5,000		$	1.48	$	1.48
Cancelled or expired		3,000		$	1.70	$	1.70
Exercised		(33,000	)	$	1.00 - 1.42	$	1.10
Balance, June 30, 2018		682,000		$	0.75 – 1.70	$	1.22
Exercisable, June 30, 2018		526,000		$	0.75 – 1.41	$	1.08

The fair value of each option grant is calculated using the following weighted average assumptions:

	2018			2017
Expected life – years		3.0			3.0
Interest rate		2.69	%		2.23	%
Volatility		54.00	%		73.09	%
Dividend yield		—	%		—	%
Weighted average fair value of options granted	$	0.6656		$	0.8344

The Company granted 5,000 stock options to employees during the six months ended June 30, 2018 (2017 – nil). This resulted in $1,109 in expenses. Vesting of options granted in previous years resulted in expenses in the amount of $36,547 for employees (2017 - $34,375) during the six months ended June 30, 2018 and $13,350 for consultants (2017 - $11,317). There were 23,000 employee and 10,000 consultant stock options exercised during the during the six months ended June 30, 2018 (2017 – 28,000 employee stock options).

As of June 30, 2018, there was approximately $52,516 of compensation expense related to non-vested awards. This expense is expected to be recognized over a weighted average period of 0.5 years.

The aggregate intrinsic value of vested options outstanding at June 30, 2018 is $321,330.