8. STOCK OPTIONS

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK OPTIONS

The shareholders approved, by a majority vote, the adoption of the 1998 Stock Incentive Plan (the “Plan”). As amended on August 11, 2003, the Plan reserves 20,000,000 shares of common stock for issuance upon the exercise of options which may be granted from time-to-time to officers, directors, certain employees and consultants of the Company or its subsidiaries by the Board of Directors. The Plan permits the award of both qualified and non-qualified incentive stock options.

During the year ended December 31, 2015, the Company issued 100,000 options to an investor who simultaneously purchased common shares of the Company, 2,800,000 options to officers and directors for services, and 500,000 to a director in connection with a loan made to the Company. The Company estimated the weighted average grant date fair value of these options using the Black-Scholes option-pricing model with the following assumptions:

Risk free interest rate	0.07 – 0.83%
Expected life in years	0.58 – 2.83
Dividend yield	0%
Expected volatility	252.28 – 309.43%

Stock-based compensation expense included in general and administrative expenses was $162,911, and $13,170 was recorded to debt discount.

A summary of the Company’s stock option awards as of December 31, 2015, and changes during the year then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2014		–		$	–
Granted		3,400,000		$	0.051
Exercised		–		$	–
Forfeited or expired		(600,000	)	$	0.054
Outstanding and exercisable at December 31, 2015		2,800,000		$	0.050		2.09	$	–

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on our closing stock price of $0.035 as of December 31, 2015, which would have been received by the holders of in-the-money options had the option holders exercised their options as of that date.