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9. Stock Options

12 Months Ended

Dec. 31, 2019

9.Stock Options

The Company has a Stock Incentive Plan (the “SIP”) that provides for the grant of stock options, incentive stock options, stock appreciation rights, restricted stock awards, and incentive awards to eligible individuals including directors, executive officers and advisors that have furnished bona fide services to the Company not related to the sale of securities in a capital-raising transaction. The SIP has a fixed maximum percentage of 10% of the Company’s outstanding shares The SIP also has terms and limitations, including that the exercise price for stock options and stock appreciation rights granted under the SIP must equal the stock’s fair value, based on the closing price per share of common stock, at the time the stock option or stock appreciation right is granted.

In March 2019 the Company granted 1,325,000 stock options to officers and directors of the Company. The options are exercisable on or before March 25, 2024 and have an exercise price of $0.09. The fair value of the options was determined to be $117,088 using the Black Scholes model. The options were fully vested upon grant and the entire fair value was recognized as compensation expense during the year ended December 31, 2019.

The fair value of each option award was estimated on the date of the grant using the assumptions noted in the following table:

Stock price	$0.09
Exercise price	$0.09
Expected volatility	209.5%
Expected dividends	-
Expected terms (in years)	5.0
Risk-free rate	2.21%

The following is a summary of the Company’s options issued and outstanding under the SIP:

	Shares	Weighted Average Exercise Price
Outstanding and exercisable at December 31, 2017	`4,700,000`	0.09
Granted	`-`	-
Expired	`(990,000)`	(0.07)
Outstanding and exercisable at December 31, 2018	`3,710,000`	$0.09
Granted	`1,325,000`	$0.09
Expired	`-`	-
Outstanding and exercisable at December 31, 2019	`5,035,000`	$0.09

The average remaining contractual term of the options outstanding and exercisable at December 31, 2019 was 2.03 years. As of December 31, 2019, options outstanding and exercisable had a $19,200 aggregate intrinsic value.