Quarterly report pursuant to Section 13 or 15(d)

Note 2 - Summary of Significant Accounting Policies: Stock Based Compensation (Policies)

Note 2 - Summary of Significant Accounting Policies: Stock Based Compensation (Policies)
9 Months Ended
Sep. 30, 2018
Stock Based Compensation

Stock Based Compensation


We account for stock-based compensation in accordance with FASB ASC 718, Compensation – Stock Compensation. Under the provisions of FASB ASC 718, stock-based compensation cost is estimated at the grant date based on the award’s fair value and is recognized as an expense over the requisite service period. The Company, from time to time, issues common stock or grants common stock warrants to its employees, consultants and board members. At the date of grant, the Company determines the fair value of the stock or stock option award and recognizes compensation expense over the requisite service period. Issuances of common stock are valued at the closing market price on the date of issuance and the fair value of any stock option or warrant awards is calculated using the Black Scholes option pricing model.


During the nine months ended September 30, 2018 and 2017, common stock and warrants were granted to employees and consultants of the Company. As a result of these grants, the Company recorded compensation expense of  $969,821 and $1,337,289 for these periods, respectively.


The fair value of warrants was estimated on the date of grant using the Black-Scholes option-pricing model based on the following weighted average assumptions:



Nine months ended September 30,





Expected volatility

174.51% to 178.54%


175.05% to 177.58%

Expected dividends




Expected term

5 years


5 years

Risk free rate

2.36% to 2.96%


1.63% to 1.93%



The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option-pricing models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s employee warrants have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models may not necessarily provide a reliable single measure of the fair value of the warrants.