Quarterly report pursuant to Section 13 or 15(d)

Stock Options

v3.5.0.2
Stock Options
9 Months Ended
Sep. 30, 2016
Stock Options [Abstract]  
STOCK OPTIONS
6. STOCK OPTIONS

 

On March 6, 2014, the Company’s Board of Directors (the “Board”) approved the 2014 Equity Incentive stock plan pursuant to which the Company may grant incentive and non-statutory options to employees, nonemployee members of the Board, consultants and other independent advisors who provide services to the Corporation. The maximum shares of common stock which may be issued over the term of the plan shall not exceed 2,500,000 shares. Awards under this plan are made by the Board or a committee of the Board. Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to holders of 10% or more of the Company’s common stock which is required to be issued at a price not less than 110% of the fair market value on the day of the grant. Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the Plan Administrator. However, no option shall have a term in excess of 5 years from the date of grant.


On March 6, 2014, the Company issued 650,000 options to its CEO, Darren Lampert, issued 400,000 options to its CFO, Irwin Lampert, issued 400,000 options to its President, Michael Salaman and issued 200,000 options to its COO, Jason Dawson exercisable at prices between $.60 and $.66 cents per share. On May 12, 2014, the Company issued 50,000 options to its director, Jody Kane and on May 14, 2014, the company issued 50,000 options to its director, Stephen Aiello, exercisable at prices between $.60 and $.66 cents per share. On July 7, 2014, the Company issued 100,000 options to 8 of its employees, exercisable at prices between $.60 and $.66 cents per share. On April 15, 2015, the Company issued 10,000 options to sales consultant Duane Nunez and on October 8, 2015, the Company issued 25,000 options to sales consultant Troy Sowers. The options vest 1/3 immediately, 1/3 one year after date of issuance and 1/3 two years after date of issuance. Compensation expense recorded for the nine months ended September 30, 2016 was $86,333. Each stock option is estimated as of the date of grant using a Black-Scholes Merton option valuation model that uses the assumptions noted in the table below. To address the lack of historical volatility data for the Company, expected volatility is based on the volatilities of peer companies.

 

As of September 30, 2016, there were 1,872,000 options issued and outstanding under the plan.

 

  Expected volatility   141.26 %
  Expected dividends   0.00  
  Expected term   3 years  
  Risk-free rate   2.0 %

 

A summary of option activity as of September 30, 2016:

 

  Options   Shares     Weight Average Exercise Price     Weighted-
Average Remaining Contractual Term
  Outstanding at December 31, 2015     1,885,000     $ .62     years
  Granted     -       -      
  Exercised     -       -      
  Forfeited or expired     -       -      
  Outstanding at March 31, 2016     1,885,000     $ .62     3 years
  Granted     -       -      
  Exercised     -       -      
  Forfeited or expired     13,000       -      
  Outstanding at September 30, 2016     1,872,000     $ .62     3 years

 

A summary of the status of the Company’s nonvested shares as of September 30, 2016 and changes during the nine months then ended September 30, 2016 is presented below:

 

  Nonvested shares   Shares     Weighted-
Average 
Fair Market Value
 
  Nonvested at December 31, 2015     639,999     $ .14  
  Granted                
  Vested     (626,999 )     .14  
  Forfeited     (13,000 )        
  Outstanding at September 30, 2016     -0-     $ .14