Note 11 - Stock Options

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Note 11 - Stock Options

NOTE 11 – STOCK OPTIONS

As of March 31, 2019, options to purchase 3,380,000 shares of common stock under the Company’s stock option plan were authorized and reserved for future grant.  A summary of activity in the stock option plan for the three months ended March 31, 2019 is as follows:

	2019
			Weighted-
			Average
	Number		Exercise
	of Shares		Price
Outstanding as of beginning of the period		1,580,000	$	0.25
Granted		1,950,000		0.89
Exercised		—		—
Forfeited or expired		—		—
Outstanding as of end of the period		3,530,000		0.60
Exercisable as of end of the period		3,530,000		0.60

As of March 31, 2019, options exercisable and options outstanding had a weighted average remaining contractual term of 3.04 years and had an aggregate intrinsic value of $584,216.

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for the grants made in the three months ended March 31, 2019:

	2019
Expected life (in years)	3.04
Risk free rate	2.9%
Volatility	459.7%
Dividend yield	-

Expected option life and volatility are based on historical data of the Company.   The risk-free interest rate is calculated based on the average US Treasury bill rate that corresponds with the option life.  Historically, the Company has not declared dividends and there are no foreseeable plans to do so.

As of March 31, 2019, there was $2,815,924 of unrecognized share-based compensation cost related to grants under the stock option plans that will be recognized over a weighted-average period of 3 years.

Share-based compensation expense included in selling, general and administrative expense in the statements of income for each of the three-month periods ended March 31, 2019 and 2018 was $113,247 and $0, respectively.