Stock Options and Warrants

3 Months Ended

Mar. 31, 2016

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

Stock Options and Warrants

NOTE 10 – STOCK OPTIONS AND WARRANTS

A. COMMON STOCK OPTIONS

Per the employment contracts with certain officers, for the three months ended March 31, 2016, the company issued 450,000 common stock options, valued at $855 ( pursuant to the Black Scholes valuation model) ) that are exercisable into shares of common stock at an average exercise price of $.0019 and with a maturity life of 10 years. For the three months year ended March 31, 2016, the amortization of stock options was $385 and the unamortized balance was $1,702.

A summary of the common stock options for the period from December 31, 2015 through March 31, 2016 follows:

	Number Outstanding			Weighted Avg. Exercise Price			Weighted Avg. Remaining Contractual Life (Years)
Balance, December 31, 2015		12,380,000		$	0.123			6.0
Options issued		450,000			0.002
Options exercised
Expired		(150,000	)		(.098	)
Balance, March 31, 2016		12,680,000		$	0.106			5.8

The vested and exercisable options at period end follows:

	Exercisable/ Vested Options Outstanding		Weighted Avg. Exercise Price		Weighted Avg. Remaining Contractual Life (Years)
Balance March 31, 2016		11,030,000	$	.128		5.1
Additional vesting by June 30, 2016		450,000		.0003		9.0

The fair value of new stock options, re-priced stock options, new purchase warrants and re-priced purchase warrants granted using the Black-Scholes option pricing model was calculated using the following assumptions:

	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
Risk free interest rate		.87	%		.89	%
Expected volatility		136	%		102	%
Expected term		3			3
Expected dividend yield		0	%		0	%
Average value per options and warrants	$	.0019		$	.0003

Expected volatility is based on historical volatility of the Company’s common stock price. Short Term U.S. Treasury rates were utilized at the risk free interest rate. The expected term of the options and warrants was calculated using the alternative simplified method newly codified as ASC 718 “Accounting for Stock Based Compensation,” which defined the expected life as the average of the contractual term of the options and warrants and the weighted average vesting period for all issuances.

B. COMMON STOCK WARRANTS

A summary of outstanding vested warrant activity for the period from December 31, 2014 to March 31, 2016 follows:

	Number Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Common Stock Warrants
Balance, December 31, 2015		1,125,000	$	.042		2.05
Warrants exercised-cashless		-		-		-
Warrants issued		-		-		-
Warrants expired		-		-		-
Warrants cancelled		-		-		-
Balance, March 31, 2016		1,125,000	$	.042		.91