6. Share-based Compensation

12 Months Ended

Dec. 31, 2017

6. Share-based Compensation

In March 2017, the Company issued 750,000 warrants to the Company’s officers to purchase shares of our common stock at $0.40 per share. Estimated fair values of warrants granted have been determined using the Black-Scholes option pricing model with the following average assumptions:

Risk-free interest rate	1.55%
Expected term	3 years
Volatility	154%
Dividend yield	-
Fair value	$ 0.33

Expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The Company’s historical stock warrant exercise experience does not provide a reasonable basis upon which to estimate expected term. As such, the simplified method was used to calculate the expected term.

The Company calculated volatility based on the volatilities of comparable public companies.

Total share-based compensation was $224,446 and $0 for years ended December 31, 2017 and 2016, respectively.

Warrants

A summary of the activity of the Company’s outstanding warrants at December 31, 2016 and December 31, 2017 is as follows:

	Warrants	Weighted-average exercise price	Weighted-average grant date fair value

Outstanding and exercisable at December 31, 2015	8,000,000	$ 0.35	$ 0.00

Granted	75,000	0.75	-
Expired/Cancelled	-	-	-
Exercised	-	-	-

Outstanding and exercisable at December 31, 2016	8,075,000	$ 0.35	$ 0.00

Granted	935,000	0.41	0.33
Expired/Cancelled	-	-	-
Exercised	(250,000)	0.01	-

Outstanding and exercisable at December 31, 2017	8,760,000	$ 0.37	$ 0.33

The following table sets forth the exercise price range, number of shares, weighted average exercise price and remaining contractual lives of the warrants by groups as of December 31, 2017:

Exercise price range	Number of options outstanding	Weighted-average exercise price	Weighted-average remaining life

$0.10	3,000,000	$ 0.10	2.6 years

$0.40	375,000	0.40	4.2 years

$0.50	5,000,000	0.50	2.6 years

$0.75	385,000	0.75	2.5 years

	8,760,000	$ 0.37	2.8 years