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Stock Options and Warrants | 12 Months Ended
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Dec. 31, 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 and warrants vest and expire according to terms established at the grant date. Options Employee options vest according to the terms of the specific grant and expire from 5 to 10 years from date of grant. The weighted average, remaining contractual life of employee and non-employee options outstanding at December 31, 2021 was 4.9 years. Stock option activity for the period January 1, 2020 to December 31, 2021, was as follows:
Stock options outstanding |  |  |  |  |  |  |  |
|  | Options |  |  | Weighted Avg. Exercise Price |
Options outstanding, December 31, 2019 |  |  | 39,750,603 |  |  | $ | 0.20 |
Options granted |  |  | 3,599,998 |  |  |  | 0.12 |
Options exercised |  |  | (60,000 | ) |  |  | 0.05 |
Options cancelled |  |  | (10,810,000 | ) |  |  | 0.25 |
Options outstanding, December 31, 2020 |  |  | 32,480,601 |  |  | $ | 0.18 |
Options granted |  |  | 800,000 |  |  |  | 0.03 |
Options exercised |  |  | – |  |  |  | – |
Options cancelled |  |  | (2,200,000 | ) |  |  | 0.30 |
Options outstanding, December 31, 2021 |  |  | 31,080,601 |  |  | $ | 0.17 |
The weighted average exercise prices, remaining contractual lives for options granted, exercisable, and expected to vest as of December 31, 2021 were as follows:
Options outstanding by Per Share Price |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 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 |  |  |  | 6.1 |  |  | $ | 0.10 |  |  |  | 22,305,551 |  |  | $ | 0.10 |
$ 0.25 - $ 0.49 |  |  | 8,153,552 |  |  |  | 2.0 |  |  |  | 0.30 |  |  |  | 8,153,552 |  |  |  | 0.30 |
$ 0.50 - $ 0.99 |  |  | 471,052 |  |  |  | 2.3 |  |  |  | 0.85 |  |  |  | 471,052 |  |  |  | 0.85 |
$ 1.00 - $ 2.00 |  |  | 150,446 |  |  |  | 1.6 |  |  |  | 1.18 |  |  |  | 150,446 |  |  |  | 1.18 |
|  |  | 31,080,601 |  |  |  | 4.9 |  |  | $ | 0.17 |  |  |  | 31,080,601 |  |  | $ | 0.17 |
As of December 31, 2021, the market price of the Company’s stock was $0.04 per share. At December 31, 2021 the aggregate intrinsic value of the options outstanding was $22,000. Future unamortized compensation expense on the unvested outstanding options at December 31, 2021 is $0. Year Ending December 31, 2021 During the year ended December 31, 2021, the Company issued options to purchase a total of 800,000 shares of common stock to an employee and former officer with a fair value of $32,000 determined using the Black-Scholes Option Pricing model. The options are exercisable at $0.02 to $0.05 per share, vesting immediately or over one month and expire ten years from the date of grant. During the year ended December 31, 2021, the Company recognized compensation costs of $32,000 based on options that vested. Year Ending December 31, 2020 During the year ended December 31, 2020, the Company issued options to purchase a total of 3,599,998 shares of common stock to employees, officers and members of the Board of Directors with a fair value of $373,000 determined using the Black-Scholes Option Pricing model. The options are exercisable at $0.02 to $0.15 per share, vesting over three to twelve months and expiring ten years from the date of grant. During the year ended December 31, 2020, the Company recognized compensation costs of $361,000 based on options that vested. Black-Scholes Option Pricing The Company used the following average assumptions in its calculation using the Black-Scholes Option Pricing model:
Assumptions used for option valuation |  |  |  |  |  |  |  |
|  | Years Ended |
|  | 2021 |  |  | 2020 |
Expected life (years) |  |  | 4.9 |  |  |  | 5.5 |
Risk free interest rate |  |  | 1.3% |  |  |  | 1.7% |
Volatility |  |  | 148% |  |  |  | 138% |
Expected dividend yield |  |  | 0% |  |  |  | 0% |
The assumptions used in the Black Scholes models referred to above are based upon the following data: (1) the contractual life of the underlying non-employee options is the expected life. The expected life of the employee option is estimated by considering the contractual term of the option, the vesting period of the option and the employees’ expected exercise behavior. (2) The expected stock price volatility was based upon the Company’s historical stock price over the expected term of the option. (3) The risk-free interest rate is based on published U.S. Treasury Department interest rates for the expected terms of the underlying options. (4) The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future. Warrants The following table summarizes certain information about the Company’s stock purchase warrants.
Warrants outstanding |  |  |  |  |  |  |  |
|  | Warrants |  |  | Weighted Avg. Exercise Price |
Warrants outstanding, December 31, 2019 |  |  | 13,065,084 |  |  | $ | 0.11 |
Warrants granted |  |  | 6,117,013 |  |  |  | 0.03 |
Warrants exercised |  |  | (1,155,000 | ) |  |  | 0.05 |
Warrants cancelled |  |  | (9,343,420 | ) |  |  | 0.07 |
Warrants outstanding, December 31, 2020 |  |  | 8,683,677 |  |  | $ | 0.11 |
Warrants granted |  |  | 19,307,153 |  |  |  | 0.04 |
Warrants exercised |  |  | – |  |  |  | – |
Warrants cancelled |  |  | (8,013,681 | ) |  |  | 0.10 |
Warrants outstanding, December 31, 2021 |  |  | 19,977,149 |  |  | $ | 0.04 |
At December 31, 2021 the price of the Company’s common stock was $0.04 per share and the aggregate intrinsic value of the warrants outstanding was $76,000. As of December 31, 2021, 19,943,816 warrants were fully vested and 33,333 warrants vest in January 2022.
Warrants outstanding by Per Share Price |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 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 |  |  | 19,907,149 |  |  |  | 0.7 |  |  | $ | 0.04 |  |  |  | 19,873,816 |  |  | $ | 0.04 |
$ 0.25 - $ 0.49 |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
$ 0.50 - $ 1.00 |  |  | 70,000 |  |  |  | 2.3 |  |  |  | 0.80 |  |  |  | 70,000 |  |  |  | 0.80 |
|  |  | 19,977,149 |  |  |  | 0.7 |  |  | $ | 0.04 |  |  |  | 19,943,816 |  |  | $ | 0.04 |
Year Ending December 31, 2021
| · | In February through December 2021, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 18,907,157 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 4 for further discussion.
| · | In January through December 2021, pursuant to terms of a consulting agreement, the Company granted warrants to purchase 399,996 shares of common stock with an exercise price of $0.02 to $0.05 per share, 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 approximately $13,000 determined using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 0.11% to 0.7%; volatility of 204% to 242%; and dividend yield of 0%. During the year ended December 31, 2021, the Company recognized compensation expense of $13,000 based on the fair value of the warrants that vested.
Year Ending December 31, 2020
| · | In March through December 2020, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 5,717,017 shares of common stock with an exercise price of $0.03 to $0.035 per share, vesting immediately upon grant and expiring one year from the date of grant. See Note 4 for further discussion.
| · | In April through December 2020, pursuant to terms of a consulting agreement, the Company granted warrants to purchase 399,996 shares of common stock with an exercise price of $0.02 to $0.08 per share, vesting 1 to 3 months from the date of grant and expiring two years from the date of grant. Total fair value of these options at grant date was approximately $16,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 0.11% to 0.19%; volatility of 188% to 200%; and dividend yield of 0%. During the year ended December 31, 2020, the Company recognized compensation expense of $16,000 based on the fair value of the warrants that vested.

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