Quarterly report pursuant to Section 13 or 15(d)

8. Stock Options and Warrants

v3.21.2
8. Stock Options and Warrants
3 Months Ended
Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]  
Stock Options and Warrants

  8. 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 vest and expire according to terms established at the grant date.

 

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 March 31, 2021 was 5.3 years. Stock option activity for the period January 1, 2021 up to March 31, 2021, was as follows:

 

    Options     Weighted
Avg. Exercise
Price
 
January 1, 2021     32,480,601     $ 0.18  
Granted     300,000       0.03  
Exercised            
Forfeited            
March 31, 2021     32,780,601     $ 0.18  

 

The weighted average exercise prices, remaining contractual lives for options granted, exercisable, and expected to vest as of March 31, 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
 
$0.05 - $0.24   21,805,551   6.8   $ 0.10   21,705,551   $ 0.10  
$0.25 - $0.49   10,353,552   2.3     0.30   10,353,552     0.30  
$0.50 - $0.99   471,052   3.1     0.85   471,052     0.85  
$1.00 - $2.00   150,446   2.3     1.18   150,446     1.18  
    32,780,601   5.3     0.18   32,680,601     0.18  

 

During the three-month period ending March 31, 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 $9,000 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 three-month periods ended March 31, 2021 and 2020, the Company recognized compensation costs based on the fair value of options that vested of $10,000 and $115,000 respectively.

 

At March 31, 2021, the Company’s closing stock price was $0.03 per share. The aggregate intrinsic value of the options outstanding at March 31, 2021 was $3,000. Future unamortized compensation expense on the unvested outstanding options at March 31, 2021 is approximately $2,000 to be recognized through April 2021.

 

Warrants

 

The following table summarizes certain information about the Company’s stock purchase warrants activity for the period starting January 1, 2021 up to March 31, 2021.

 

    Warrants     Weighted Avg.
Exercise Price
 
January 1, 2021     8,683,677     $ 0.11  
Granted     924,999       0.03  
Exercised            
Cancelled     (550,000 )     0.04  
March 31, 2021     9,058,676     $ 0.11  

 

The weighted average exercise prices, remaining contractual lives for warrants granted, exercisable, and expected to vest as of March 31, 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   6,988,676   0.6   $ 0.04   6,955,343   $ 0.04  
$0.25 - $0.49   2,000,000   0.6     0.30   2,000,000     0.30  
$0.50 - $1.00   70,000   3.1     0.80   70,000     0.80  
    9,058,676   0.6     0.11   9,025,343     0.11  

 

In the three-month period ending March 31, 2021, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 825,000 shares of common stock with an exercise price of $0.03 per share, vesting immediately upon grant and expiring one year from the date of grant (see Note 5, above).

 

In the three-month period ending March 31, 2021, the Company issued warrants to purchase 99,999 shares of common stock in exchange for services. The warrants are exercisable at a price of $0.03 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 $3,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 0.13%; volatility of 204% to 219% and dividend yield of 0%. During the three-month periods ended March 31, 2021, the Company recognized compensation costs based on the fair value of warrants that vested of $3,000.

 

At March 31, 2021, the aggregate intrinsic value of the warrants outstanding was $1,000.