9. Stock Options

9 Months Ended

Sep. 30, 2021

Notes

9. Stock Options

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.

On July 19, 2021, management and Board members exercised stock options for 710,000 shares of common stock for total consideration $71,000. The Company issued 354,648 common shares in exchange for advanced funds, accounts payables, and accrued interest payable to management for a nonmonetary value of $35,466.  An additional 355,352 common shares were exercised for cash consideration of $35,534.

The Company’s President and Chief Executive Officer, Eric Jones, exercised stock options representing 200,000 shares of common stock for total consideration of $20,000. This payment was noncash representing $7,146 from the accounts payable and $12,854 net of accrued wages. James Collord, the Company’s Vice President and Chief Operating Officer exercised stock options in the amount of $10,000 representing 100,000 shares of common stock Mr. Collord exercised stock options, using $8,163 of accrued interest plus $2,500 in accrued wages, net of $663 in related taxes, to cover the option exercise price of $10,000. Additionally, Larry Thackery, Company’s CFO, exercised stock options for 160,000 shares of common stock for $16,000 with $10,535 in cash, and $5,917 in accrued wages, net of $453 in related taxes.

Board Members, Ralph Noyes, and Doug Glaspey exercised stock options of 150,000 and 100,000 shares of common stock, respectively. This transaction was a cash transaction of $15,000 for Ralph Noyes, and $10,000 for Doug Glaspey for a total of $25,000 in cash.

On March 30, 2020, the Company granted 1,630,000 stock options to officers and directors of the Company. The fair value of the options was determined to be $152,580 using the Black Scholes model.  The options are exercisable on or before March 29, 2025 and have an exercise price of $0.099.  The options were fully vested upon grant and the entire fair value was recognized as compensation expense during the quarter ended March 31, 2020.

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

	March 30, 2020
Stock price	$0.095
Exercise price	$0.099
Expected volatility	218.6%
Expected dividends	-
Expected terms (in years)	5.0
Risk-free rate	0.39%

No stock options were granted, and 1,640,000 options expired for the quarter ended September 30, 2021.   

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, 2019	5,035,000	0.09
Granted	1,630,000	0.099
Expired	(960,000)	(0.06)
Outstanding and exercisable at December 31, 2020	5,705,000	$0.10
Exercised	(710,000)	-
Expired	(1,640,000)	-
Outstanding and exercisable at September 30, 2021	3,355,000	$0.09

The average remaining contractual term of the options outstanding and exercisable at September 30, 2021 was 2.74 years. At September 30, 2021, options outstanding and exercisable had an aggregate intrinsic value of  $114,498 based on the Company’s stock price of $0.126 at September 30, 2021. Intrinsic value of exercised stock options for 710,000 shares of common stock on July 19, 2021 was $18,460.