NOTE 6 – STOCK OPTIONS AND WARRANTS

During 2017, the Company granted options to purchase 550,000 shares of common stock at exercise prices ranging from $0.26 to $0.55, vesting from the grant date through March 2019, and expiring between September 2020 and October 2021. The fair value of these options on grant date of approximately $159,000 shall be recorded as non-cash compensation expense over the vesting periods, with approximately $74,000 incurred during 2017. No warrants were exercised in 2017.

During 2017, options to purchase 4.8 million shares of common stock were exercised at prices ranging from $0.01 to $0.025. Of this amount, 4.5 million shares were exercised by the former CEO of the Company, who is currently a Board member. This individual’s exercise price of $0.01 per share, or $45,000 in total, was paid with the surrender of 90,000 shares of common stock. These surrendered shares were classified as treasury stock.

In December 2017, options to purchase 200,000 shares of commons stock at an exercise price of $0.025 were forfeited by the CEO and by an independent Board member (100,000 shares forfeited by each individual).

Stock options outstanding and exercisable as of December 31, 2017 were:

During 2017, the Company issued warrants to purchase approximately 3.1 million shares of common stock at exercise prices ranging from $0.40 to $0.62, expiring between March and December of 2020. The Company recorded non-cash compensation expense of approximately $1,004,000 on such issuances, representing the estimated fair value of these instruments on the issuance date.

During 2016, the Company issued warrants to purchase 1.07 million shares of common stock at exercise prices ranging from $0.10 to $0.20, expiring between February 2019 and August 2021. The Company recorded non-cash compensation expense of approximately $164,000, representing the estimated fair value of these instruments on the issuance date.

During 2016 no stock options were issued, nor were any stock options or warrants exercised.