STOCK OPTION PLAN

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

STOCK OPTION PLAN

Note 11 – Stock Option Plan

On July 29, 2015 as approved by the Board of Directors, the Company granted 4,700,000 stock options to three members of management and to three members of the Board of Directors.  These options vest over a three year period, at $0.15 per share for a term of seven years.  The total fair value of these options at the date of grant was estimated to be $376,490 and was determined using the Black Scholes option pricing model with an expected life of 7 years, risk free interest rate of 1.872%, dividend yield of 0%, and expected volatility of 333%. During the year ended December 31, 2015, $152,198 was recorded as a stock based compensation expense.

The following is a summary of the status of all of the Company’s stock options as of December 31, 2016 and changes during the period ended on that date:

	Number of Options		Weighted-Average Exercise Price		Aggregate Intrinsic Value		Weighted-Average Remaining Life (Years)
Outstanding at January 1, 2015		4,800,000	$	0.26	$	—		5.65
Exercisable at January 1, 2015		3,200,000	$	0.22	$	—		3.79
Granted		4,700,000	$	0.15	$	—		6.58
Exercised		—	$	0.00	$	—		—
Cancelled		—	$	0.00	$	—		—
Outstanding at December 31, 2015		9,500,000	$	0.20	$	—		5.26
Exercisable at December 31, 2015		7,902,000	$	0.20	$	—		4.55
Granted			$	0.00	$	—
Exercised		—	$	0.00	$	—		—
Cancelled		—	$	0.00	$	—		—
Outstanding at December 31, 2016		9,500,000	$	0.20	$	—		5.26
Exercisable at December 31, 2016		7,902,000	$	0.20	$	—		4.00