14. Options

12 Months Ended

Dec. 31, 2015

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

Options

The following table presents all options granted during the year ended December 31, 2015:

			Number				Term		Vesting		Black-Scholes Options				Total		Expense		Expense
Grant			of		Strike		in		Term in		Pricing Model:				Fair		Recognized		Recognized
Date		Recipient	Options		Price		Years(1)		Years(1)		Volatility		Call Value		Value		in 2015		in 2014
	9/30/15	Kenneth DeCubellis, CEO		200,000	$	0.172		10		5		106%	$	0.1434	$	28,676	$	1,434	$	–
	9/30/15	James Moe, CFO		150,000	$	0.172		10		5		106%	$	0.1434		21,507		1,075		–
	9/30/15	Michael Eisele, COO		200,000	$	0.172		10		5		106%	$	0.1434		28,676		1,434		–
	9/30/15	Employee		150,000	$	0.172		10		5		106%	$	0.1434		21,507		1,075		–
	9/30/15	Employee		30,000	$	0.172		10		5		106%	$	0.1434		4,301		215		–
	9/30/15	Employee		30,000	$	0.172		10		5		106%	$	0.1434		4,301		215		–
	9/30/15	Employee		30,000	$	0.172		10		5		106%	$	0.1434		4,301		215		–
	9/30/15	Employee		10,000	$	0.172		10		5		106%	$	0.1434		1,434		72		–
	9/30/15	Joseph Lahti, Director		100,000	$	0.172		10		5		106%	$	0.1434		14,338		717		–
	9/30/15	Benjamin Oehler, Director		100,000	$	0.172		10		5		106%	$	0.1434		14,338		717		–
				1,000,000											$	143,379	$	7,169	$	–

The following table presents all options granted during the year ended December 31, 2014:

			Number				Term		Vesting		Black-Scholes Options				Total		Expense		Expense
Grant			of		Strike		in		Term in		Pricing Model:				Fair		Recognized		Recognized
Date		Recipient	Options		Price		Years(1)		Years(1)		Volatility		Call Value		Value		in 2015		in 2014
	12/22/14	Kenneth DeCubellis, CEO		58,000	$	0.280		10		5		198%	$	0.2237	$	12,974	$	2,596	$	64
	12/22/14	James Moe, CFO		40,000	$	0.280		10		5		198%	$	0.2237		8,947		1,788		44
	12/22/14	Michael Eisele, COO		40,000	$	0.280		10		5		198%	$	0.2237		8,947		1,788		44
	12/22/14	Employee		36,000	$	0.280		10		5		198%	$	0.2237		8,053		1,612		40
	12/22/14	Employee		12,000	$	0.280		10		5		198%	$	0.2237		2,684		536		13
	12/22/14	Employee		12,000	$	0.280		10		5		198%	$	0.2237		2,684		536		13
	12/22/14	Employee		2,000	$	0.280		10		5		198%	$	0.2237		447		88		2
	12/8/14	Joseph Lahti, Director		100,000	$	0.374		10		5		202%	$	0.2956		29,563		5,912		372
	12/8/14	Benjamin Oehler, Director		100,000	$	0.374		10		5		202%	$	0.2956		29,563		5,912		372
	12/8/14	Bradley Berman, Director		100,000	$	0.374		10		5		202%	$	0.2956		29,563		5,912		372
	12/1/14	Employee		100,000	$	0.379		10		5		193%	$	0.2999		29,988		5,996		500
	02/10/14	Employee		27,500	$	0.782		10		5		116%	$	0.6778		18,639		–		1,976
	01/30/14	Employee		5,000	$	0.630		10		5		115%	$	0.5471		2,735		548		499
				632,500											$	184,787	$	33,224	$	4,311

⁽¹⁾All options vest in equal annual installments, commencing one year from the date of the grant, are exercisable for 10 years from the date of the grant and are being amortized over the implied service term, or vesting period, of the options.

Options Cancelled

On September 30, 2015, 1,000,000 common stock options were voluntarily forfeited by our chairman of the board.

On August 22, 2014, 27,500 common stock options with a strike price of $0.782 were forfeited pursuant to the resignation of an employee.

No other options were cancelled during 2015 or 2014.

Options Expired

On November 30, 2015, a total of 66,667 options with a strike price of $0.30 per share expired.

On October 17, 2015, a total of 86,667 options with a strike price of $1.00 per share expired.

On November 30, 2014, a total of 12,000 options with a strike price of $0.92 per share expired.

On August 8, 2014, a total of 24,000 options with a strike price of $0.51 per share expired.

No other options expired during 2015 or 2014.

Options Exercised

No options were exercised during the year ended December 31, 2015 and 2014.

The following is a summary of information about the Stock Options outstanding at December 31, 2015.

				Shares Underlying
Shares Underlying Options Outstanding				Options Exercisable
		Weighted
	Shares	Average	Weighted	Shares	Weighted
	Underlying	Remaining	Average	Underlying	Average
Range of	Options	Contractual	Exercise	Options	Exercise
Exercise Prices	Outstanding	Life	Price	Exercisable	Price
$0.03 - $1.00	7,055,500	7.51 years	$0.44	3,111,000	$0.47

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

	December 31,		December 31,
	2015		2014
Average risk-free interest rates		1.75%		2.00%
Average expected life (in years)		5		5
Volatility		106%		97%

The Black-Scholes option pricing model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During the years ended December 31, 2015 and 2014 there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.

The following is a summary of activity of outstanding stock options:

				Weighted
				Average
	Number			Exercise
	of Shares			Prices
Balance, December 31, 2013		6,639,834		$	0.59
Options expired		(36,000	)		(0.65	)
Options cancelled		(27,500	)		(0.78	)
Options granted		632,500			0.36
Options exercised		–			–
Balance, December 31, 2014		7,208,834			0.56
Options expired		(153,334	)		(0.70	)
Options cancelled		(1,000,000	)		(1.00	)
Options granted		1,000,000			0.17
Options exercised		–			–
Balance, December 31, 2015		7,055,500			0.44
Exercisable, December 31, 2015		3,111,000		$	0.47

The Company expensed $623,700 and $578,919 from the amortization of common stock options during the years ended December 31, 2015 and 2014, respectively.