NOTE

–

Stockholders’ Equity

Common Stock

A summary of the Company’s shares of Common Stock outstanding at

December 31, 2019

is presented in the table below:

:	Number of shares outstanding
January 1, 2018		1,070,586
Repurchase and cancellation of shares of Common Stock		(64,084	)
Shares issued in connection with exercise of stock options		266
December 31, 2018		1,006,768
Shares issued in connection with Reverse Split		525
Shares issued in connection with exercise of stock options		7,806
Shares issued in connection with Employment Agreement		5,036
December 31, 2019		1,020,135

Stock Options

August 27, 2019,

at the Company’s Annual Meeting, the stockholders of the Company approved the Stock Incentive Plan of

2019

(”the “Plan”). Also included are outstanding warrants granted under the Stock Option Plan of

2005,

which was approved during the Annual Meeting on

December 12, 2006.

The Plan is administered by the Company’s Compensation Committee and provides for

250,000

shares of common stock to be reserved for issuance under the Plan. Directors, officers, employees, and consultants of the Company are eligible to participate in the Plan. The Plan provides for the awards of incentive and non-statutory stock options. The Compensation Committee determined the vesting schedule to be up to

five

years at the time of grant of any options under the Plan, and unexercised options will expire in up to

ten

years. The exercise price is to be equal to at least

100%

of the fair market value of a share of the common stock, as determined by the Compensation Committee, on the grant date. The fair value of stock options are calculated in accordance with FASB ASC Topic

718.

As of

December 31, 2019

and

2018,

there were

196,672

and

186,673

shares available for grant as options under the Plan, respectively.

Details of all options outstanding under the Plan are presented in the table below:

	Number of Options			Weighted Average Exercise Price

Balance, December 31, 2017		56,661		$	2.606
Granted		13,332			2.400
Exercised		(6,666	)		2.310
Balance, December 31, 2018		63,327		$	2.594
Granted		13,332			5.600
Exercised		(13,332	)		2.350
Expired		(9,999	)		2.550
Balance, December 31, 2019		53,328		$	3.391

A summary of the Company’s stock options outstanding at

December 31, 2019

is presented in the table below:

Exercise Price	Outstanding	Weighted average remaining contractual life of options (in years)	Exercisable	Intrinsic Value
$5.60	13,332	4.92	---	$	---
$2.40	13,332	3.92	13,332	$	20,225
$3.24	13,332	2.92	13,332	$	9,026
$2.25	6,666	1.92	6,666	$	11,113
$2.40	6,666	.92	6,666	$	10,113
TOTALS	53,328		39,996	$	50,477

Warrants

The company does

not

have any warrants outstanding as of

December 31, 2019.

Preferred Stock

As of

December 31, 2019

and

2018,

the Company has

333,306

shares of preferred stock authorized and

none

of which is issued and outstanding. On

February 27, 2019,

the Company filed with the Secretary of State of the state of Nevada a certificate of amendment o our articles of incorporation. The amendment provided for, among other things, a reduction in the number of authorized shares of preferred stock to

333,306.

The Company’s Board of Directors currently has the right, with respect to the authorized shares of our preferred stock, to authorize the issuance of

one

or more series of preferred stock with such voting, dividend and other rights as the directors determine. As of

December 31, 2019

and

2018,

there were

shares of preferred stock outstanding.