Common Stock Options

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Common Stock Options

 In 2007, the Company adopted the 2007 Incentive and Non-Qualified Stock Option Plan (hereinafter the “Plan”), which replaced the 1997 Incentive and Non-Qualified Stock Option Plan, as amended in 2001, and under which 8,000,000 shares of Common Stock are reserved for issuance under qualified options, nonqualified options, stock appreciation rights and other awards as set forth in the Plan.

    Under the Plan, qualified options are available for issuance to employees of the Company and non-qualified options are available for issuance to consultants and advisors. The Plan provides that the exercise price of a qualified option cannot be less than the fair market value on the date of grant and the exercise price of a nonqualified option must be determined on the date of grant. Options granted under the Plan generally vest three to five years from the date of grant and generally expire ten years from the date of grant.

During the years ended December 31, 2014, no stock options were granted by the Company. During the year ended December 31, 2015, the Company issued options to purchase 2,300,000 shares of common stock to its management team. Each option has an expiration date of February 3, 2020, and are exercisable for $0.04 per share.

 The following is a summary of all Common Stock option activity during the year ended December 31, 2015 and 2014:

	Shares Under Options Outstanding			Weighted Average Exercise Price
Outstanding at December 31, 2013		304,500		$	0.91
Options granted		-		$	-
Options forfeited		(152,500	)	$	(0.47	)
Options exercised		-			-
Outstanding at December 31, 2014
Options granted		152,000		$	1.34
Options forfeited		2,300,000		$	0.04
Options exercised		-		$	-
Outstanding at December 31, 2015		2,452,000		$	0.12

	Options Exercisable		Weighted Average Exercise Price Per Share
Exercisable at December 31, 2014		52,000	$	0.85
Exercisable at December 31, 2015		2,352,000	$	0.06

 The following represents additional information related to Common Stock options outstanding and exercisable at December 31, 2015:

		Outstanding				Exercisable
Exercise Price		Number of Shares	Weighted Average Remaining Contract Life in Years	Weighted Average Exercise Price		Number of Shares	Weighted Average Exercise Price
$	0.04	2,300,000	4.10	$	0.04	2,300,000	$	$0.04
$	0.80	1,000	2.16	$	0.80	1,000	$	$0.80
$	0.85	51,000	1.77	$	0.85	51,000	$	0.85
$	1.60	100,000	0.26	$	$1.60	-	$	-
		2,452,000	3.89	$	$0.12	2,352,000	$	$0.06

 The weighted average remaining contractual term for both fully vested share options (exercisable, above) and options expected to vest (outstanding, above) is 3.89 years.  

 A summary of the status of the Company’s nonvested stock options as of December 31, 2015 and changes during the year ended December 31, 2015 is presented below:

Nonvested Stock Options	Shares			Weighted Average Grant Date Fair Value
Nonvested at December 31, 2013		162,500		$	162,500
Options granted		-			-
Options vested		-		$	-
Options forfeited		(62,500	)		(62,500)
Nonvested at December 31, 2014		100,000		$	100.000
Options granted		-			-
Options vested		-			-
Options forfeited		-			-
Nonvested at December 31, 2015		100,000			100,000