NOTE 6  STOCK-BASED COMPENSATION

On June 29, 2016, the Board of Directors amended the 2015 Stock Option Plan authorizing the Company to grant awards to certain employees under the plan at fair market value, which was approved by shareholders at the Annual Meeting held on September 6, 2016.  The total number of shares of Common Stock, with respect to which awards may be granted pursuant to the Plan, shall not exceed 4,000,000 shares.

As of March 31, 2018, there were outstanding 1,038,000 options awarded to certain executives, key employees and advisory board members under the Plan.

On October 21, 2015, the Board of Directors of the Company approved non-employee director compensation of $25,000 each annually, to be paid quarterly half in cash and half in common stock, beginning September 1, 2015.

The per share weighted average fair value of stock options granted during the three months ended March 31, 2018 and March 31, 2017 was zero and $0.25, respectively. The fair value of each award is estimated on the grant date using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the three months ended March 31, 2018 and March 31, 2017. Historical information was the primary basis for the selection of the expected volatility, expected dividend yield and the expected lives of the options.  The risk-free interest rate was selected based upon yields of the U.S. Treasury issues with a term equal to the expected life of the option being valued:

The following table summarizes the status of the Plan:

Total stock-based compensation expense, net of estimated forfeitures for stock option awards totaled $12,183 and $16,580 for the three months ended March 31, 2018 and March 31, 2017, respectively.

The weighted-average grant-date fair value of options granted during the three months ended March 31, 2018 and March 31, 2017, was zero and $122,656, respectively.  There were no options exercised during the three months ended March 31, 2018 and March 31, 2017.

The following table presents information pertaining to options outstanding at March 31, 2018:

As of March 31, 2018, there was $65,437 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 17 months. The total fair value of shares vested as of March 31, 2018 and March 31, 2017, was $156,425 and $98,432, respectively.