Quarterly report pursuant to Section 13 or 15(d)

Stock Options and Warrants

v3.21.2
Stock Options and Warrants
9 Months Ended
Sep. 30, 2021
Share-based Payment Arrangement [Abstract]  
Stock Options and Warrants

 

  9. Stock Options and Warrants

 

The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs.

 

Options

 

Options vest according to the terms of the specific grant and expire from 2 to 10 years from date of grant. The weighted-average, remaining contractual life of employee and non-employee options outstanding at September 30, 2021 was 4.9 years. Stock option activity for the period January 1, 2021 up to September 30, 2021, was as follows: 

               
    Options     Weighted
Avg. Exercise
Price
 
January 1, 2021     32,480,601     $ 0.18  
Granted     800,000       0.03  
Exercised            
Forfeited            
September 30, 2021     33,280,601     $ 0.18  

 

The weighted average exercise prices, remaining contractual lives for options granted, exercisable, and expected to vest as of September 30, 2021 were as follows: 

                             
    Outstanding Options     Exercisable Options  
Option
Exercise Price
Per Share
  Shares   Life
(Years)
    Weighted
Average Exercise
Price
    Shares       Weighted
Average Exercise
Price
 
$0.02 - $0.24   22,305,551   6.3   $ 0.10     22,305,551     $ 0.10  
$0.25 - $0.49   10,353,552   1.8     0.30     10,353,552       0.30  
$0.50 - $0.99   471,052   2.6     0.85     471,052       0.85  
$1.00 - $2.00   150,446   1.8     1.18     150,446       1.18  
    33,280,601   4.9   $ 0.18     33,280,601     $ 0.18  

 

 

During the nine-month period ending September 30, 2021, the Company granted options to purchase 300,000 shares of common stock to a former executive officer under terms of an employment agreement. The options are exercisable at $0.02 to $0.05 per share, vest monthly over a one-month period, and expire ten years from the date granted. Total fair value of these options at grant date was $11,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 10 years; risk free interest rate of 1.11%; volatility of 141% to 147% and dividend yield of 0%.

 

During the nine-month period ending September 30, 2021, the Company granted options to purchase 500,000 shares of common stock to an employee under terms of a raise in salary. The options are exercisable at $0.02 per share, vest immediately, and expire ten years from the date granted. Total fair value of these options at grant date was $20,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 10 years; risk free interest rate of 1.31%; volatility of 157% and dividend yield of 0%.

 

During the nine-month periods ended September 30, 2021 and 2020, the Company recognized compensation costs based on the fair value of options that vested of $32,000 and $283,000 respectively. During the three-month periods ended September 30, 2021 and 2020, the Company recognized compensation costs based on the fair value of options that vested of $20,000 and $81,000 respectively.

 

At September 30, 2021, the Company’s closing stock price was $.03 per share. The aggregate intrinsic value of the options outstanding at September 30, 2021 was $8,000. Future unamortized compensation expense on the unvested outstanding options at September 30, 2021 is approximately $0.

 

Warrants

 

The following table summarizes certain information about the Company’s stock purchase warrants activity for the period starting January 1, 2021 up to September 30, 2021. 

               
    Warrants     Weighted Avg.
Exercise Price
 
January 1, 2021     8,683,677     $ 0.11  
Granted     10,187,160       0.03  
Exercised            
Cancelled     (4,321,182 )     0.09  
September 30, 2021     14,549,655     $ 0.06  

 

The weighted average exercise prices, remaining contractual lives for warrants granted, exercisable, and expected to vest as of September 30, 2021 were as follows: 

                             
    Outstanding Warrants     Exercisable Warrants  

Warrant

Exercise Price

Per Share

  Shares   Life
(Years)
    Weighted
Average Exercise Price
    Shares       Weighted
Average Exercise Price
 
$0.02 - $0.24   13,279,655   0.7   $ 0.04     13,246,322     $ 0.04  
$0.25 - $0.49   1,200,000   0.2     0.30     1,200,000       0.30  
$0.50 - $1.00   70,000   2.6     0.80     70,000       0.80  
    14,549,655   0.6   $ 0.06     14,516,322     $ 0.06  

 

 

In the nine-month period ending September 30, 2021, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 9,887,163 shares of common stock with an exercise price of $0.03 to $0.04 per share, vesting immediately upon grant and expiring one year from the date of grant (see Note 5, above).

 

In the nine-month period ending September 30, 2021, the Company issued warrants to purchase 299,997 shares of common stock in exchange for services. The warrants are exercisable at a price of $0.02 to $0.05, vesting one month from the date of grant and expiring two years from the date of grant. Total fair value of these options at grant date was $9,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 0.13% to 0.27%; volatility of 204% to 240% and dividend yield of 0%. During the nine-month period ended September 30, 2021, the Company recognized compensation costs based on the fair value of warrants that vested of $9,000.

 

At September 30, 2021, the aggregate intrinsic value of the warrants outstanding was $2,000.