NOTE 9 – STOCK OPTIONS

In January 2018, the Company granted options to purchase 1.45 million shares of common stock to the Company’s board members at exercise prices ranging from $0.14 to $0.77 and expiring between December 2020 and December 2022. The fair value of these options on grant date of approximately $458,000 was amortized over the six-month vesting period during the nine months ended September 30, 2018.

During the nine months ended September 30, 2018, the Company granted options to purchase 850,000 shares of common stock to newly-hired employees at exercise prices ranging from $0.90 to $2.65 per share, expiring five years from the grant date. As of September 30, 2018, the Company recorded approximately $181,000 of the total fair value of these grants of approximately $2,083,000, which is being amortized over the five-year vesting periods.

During the nine months ended September 30, 2017, the Company granted options to purchase 300,000 shares of common stock to newly-hired employees at exercise prices ranging from $0.26 to $0.55, and expiring in September 2020, March 2021, and April 2021. The fair value of these options on the grant date approximated $73,000, of which approximately $46,000 is being amortized over the respective vesting periods, and approximately $27,000 was forfeited by the option holder.

During the nine months ended September 30, 2018, options to purchase 700,000 shares of common stock were exercised at exercise prices ranging from $0.08 to $0.63 per share by a current board member (400,000 shares) and the former CFO of the Company (300,000 shares). During the same period ended September 30, 2017, options to purchase 4.8 million shares of common stock were exercised at prices ranging from $0.010 to $0.025. As discussed in Note 8 above, of the total exercised shares during this period, 4.5 million shares were exercised by the former CEO of the Company, who is currently a board member, and 300,000 shares were exercised by the former CFO of the Company. The former CEO’s exercise price of $0.01 per share, or $45,000 in the aggregate, was paid with the surrender of 90,000 shares of common stock. These surrendered shares were classified as treasury stock.

Options to purchase 300,000 shares of common stock were forfeited during the nine-month period ended September 30, 2018. No options were forfeited during the same period in 2017.

Stock options outstanding and exercisable as of September 30, 2018 were: