4. CAPITAL STOCK

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

NOTE 4 - CAPITAL STOCK

Capitalization

The authorized capital of the Company is 500,000,000 shares of capital stock, divided into 480,000,000 shares of common stock with a par value of $0.001 per share, and 20,000,000 shares of preferred stock with a par value of $0.001 per share. The Company reserved 10,000,000 shares of common stock for issuance under its 2016 Omnibus Equity Incentive Plan. The Company has issued 50,605,965 common shares and no preferred shares. During the nine months ended September 30, 2019, the Company did not issue any shares of its common stock.

Options

A total of 10,000,000 options are issued and outstanding.

On November 20, 2018, the Company granted 500,000 non-qualified stock options pursuant to its Equity Incentive Plan, to key outside consultants, with 50% vesting after one year and 50% vesting after two years. Each option is exercisable into one share of the Company’s common stock at a price of $0.06 per share, for a term of five years. The options had an estimated grant date fair value of $10,408. For the nine month period ended September 30, 2019, $8,450 (September 30, 2018 - $0) was included in consulting services expense, based on fair value estimates determined using the Black-Scholes option pricing model with an average risk-free rate of 2.51%, a weighted average life of 4.89 years, volatility of 190.47%, and dividend yield of 0%. At September 30, 2019, the options had an intrinsic value of $0 (December 31, 2018: $0) based on the exercise price of $0.06 per option and a market price of $0.0425 per share on that date.

On February 14, 2017, the Company granted 9,500,000 non-qualified stock options pursuant to its Equity Incentive Plan, to key corporate officers and outside consultants, with 25% vesting immediately and a further 25% vesting every six months thereafter for eighteen months. Each option is exercisable into one share of the Company’s common stock at a price of $0.06 per share, equal to the closing price of the common stock on the grant date, for a term of five years. The options were fully expensed by the end of the third quarter of 2018, based on fair value estimates determined using the Black-Scholes option pricing model. Therefore, no related expense was incurred in the current period (nine-months ended September 30, 2018: $56,572). At September 30, 2019, the options had an intrinsic value of $0 (December 31, 2018: $0) based on the exercise price of $0.06 per option and a market price of $0.0425 per share on that date.

Summary of option activity in the current nine-month period and options outstanding at September 30, 2019:

	Options
	Issued	Vested		Exercise Price		Weighted Average Exercise Price		Weighted Average Life Remaining (Years)		Expiry Date	Intrinsic Value
	9,500,000		9,500,000	$	0.06					February 14, 2022
	500,000		-	$	0.06					November 20, 2023
Balance December 31, 2018	10,000,000		9,500,000			$	0.06		3.21			-
Issued	-		-		-		-		-	-		-
Expired	-		-		-		-		-	-		-
Exercised	-		-		-		-		-	-		-
Vested	-		-		-		-		-	-		-
Balance September 30, 2019	10,000,000		9,500,000			$	0.06		2.46			-

Warrants

During the nine months ended September 30, 2019, no warrants to purchase shares of common stock were issued, exercised, or expired. At September 30, 2019, warrants issued in 2015 had an intrinsic value of $75,061 (December 31, 2018: $6,672), based on the exercise price of $0.02 per warrant and a market price of $0.0425 per share on the closest trading date.

Summary of warrant activity in the current nine-month period and warrants outstanding at September 30, 2019:

	Number of Warrants		Exercise Price		Weighted Average Exercise Price		Weighted Average Life Remaining (Years)		Expiry Date	Intrinsic Value
Balance December 31, 2018		3,336,060	$	0.02	$	0.02		1.88	November 19, 2020	$	6,672
Issued		-		-		-		-	-		-
Expired		-		-		-		-	-		-
Exercised		-		-		-		-	-		-
Balance outstanding and exercisable at September 30, 2019		3,336,060	$	0.02	$	0.02		1.14	November 19, 2020	$	75,061