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Stock Options and Warrants
 9 Months Ended
Sep. 30, 2025
Share-Based Payment Arrangement [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

 

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, 2025 was 6.9 years. Stock option activity for the period January 1, 2025 up to September 30, 2025, was as follows:

        
   Options   Weighted
Avg. Exercise
Price		 
January 1, 2025   25,294,103   $0.13 
Granted   53,100,138    0.04 
Exercised   (8,640,688)   0.04 
Expired   (738,552)   0.48 
September 30, 2025   69,015,001   $0.07 

 

The weighted average exercise prices, remaining contractual lives for options granted, exercisable, and expected to vest as of September 30, 2025 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     66,515,001      7.1   $ 0.06        65,792,777      $ 0.06   
$0.25 - $0.49     2,500,000      1.5   $ 0.33        2,500,000      $ 0.33   
      69,015,001      6.9   $ 0.07        68,292,777      $ 0.07   

 

In the nine-month period ending September 30, 2025, the Company issued options to purchase 17,482,638 shares of common stock to members of the Board of Directors, including 7,218,750 options issued to the Company’s CEO/CFO (see Note 9, below), upon reinstatement of the Director Compensation Policy. 7,656,250 options are exercisable at $0.02 per share, 4,375,000 options are exercisable at $0.04 per share, 2,430,555 options are exercisable at $0.06 per share, 2,187,500 options are exercisable at $0.08 per share, and 833,333 options are exercisable at $0.15 per share. 16,649,305 of the options were fully vested at the date of grant and 833,333 of the options vest over one year. Total fair value of these options at grant date was $2,571,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 5 to 6 years; risk free interest rate of 3.95% to 4.47%; volatility of 179% and dividend yield of 0%. During the nine-month period ended September 30, 2025, the Company recognized compensation costs based on the fair value of options that vested of $2,541,000.

 

In the nine-month period ending September 30, 2025, the Company issued options to purchase 24,317,500 shares of common stock upon execution of an employment agreement with Cecil Bond Kyte, the Company’s CEO and CFO (see Note 9, below). The options are exercisable at a price of $0.03, fully vested at the date of grant, and expire 10 years from the date of grant. Total fair value of these options at grant date was $3,574,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 5 years; risk free interest rate of 4.57%; volatility of 179% and dividend yield of 0%. During the nine-month period ended September 30, 2025, the Company recognized compensation costs based on the fair value of options that vested of $3,574,000.

 

In the nine-month period ending September 30, 2025, the Company issued options to purchase 1,500,000 shares of common stock to its corporate secretary as compensation. The options are exercisable at a price of $0.03, one third vested at the date of grant, and the balance will vest two years from the date of grant, and expire 10 years from the date of grant. Total fair value of these options at grant date was $238,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 6 years; risk free interest rate of 4.32%; volatility of 179% and dividend yield of 0%. During the nine-month period ended September 30, 2025, the Company recognized compensation costs based on the fair value of options that vested of $79,000.

 

In the nine-month period ending September 30, 2025, the Company issued options to purchase 9,800,000 shares of common stock in exchange for services. The options are exercisable at a price of $0.03, vest up to two years from the date of grant, and expire 5 to 10 years from the date of grant. Total fair value of these options at grant date was $1,558,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2.5 to 6 years; risk free interest rate of 3.92% to 4.32%; volatility of 161% to 179% and dividend yield of 0%. During the nine-month period ended September 30, 2025, the Company recognized compensation costs based on the fair value of options that vested of $549,000.

 

As of September 30, 2025, based on the market price of the Company’s stock of $0.26 per share, the aggregate intrinsic value of the options outstanding at September 30, 2025 was $13,229,000.

 

Warrants

 

The following table summarizes certain information about the Company’s stock purchase warrants activity for the period starting January 1, 2025 up to September 30, 2025.

        
   Warrants   Weighted Avg.
Exercise Price		 
January 1, 2025   44,044,009   $0.04 
Granted   31,723,612    0.10 
Exercised   (16,055,229)   0.05 
Expired   (33,333)   0.13 
September 30, 2025   59,679,059   $0.07 

 

The weighted average exercise prices, remaining contractual lives for warrants granted, exercisable, and expected to vest as of September 30, 2025, were as follows:

 

                     
   Outstanding Warrants   Exercisable Warrants
Warrant Exercise Price Per Share  Shares   Life
(Years)		  Weighted Average Exercise Price   Shares   Weighted Average Exercise Price
$0.04 - $0.24   59,579,060   0.7  $0.07    59,579,060   $0.07
$0.25 - $0.48   99,999   1.8  $0.28    66,666   $0.29
    59,679,059   0.7  $0.07    59,645,726   $0.07

 

In the nine-month period ending September 30, 2025, the Company issued warrants to purchase 299,997 shares of common stock in exchange for services. The warrants are exercisable at a price range of $0.14 to $0.30, vesting one month from the date of grant, and expiring two years from the date of grant. Total fair value of these warrants at grant date was $49,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 3.57% to 4.29%; volatility of 147% to 158% and dividend yield of 0%. During the nine-month period ended September 30, 2025, the Company recognized compensation costs based on the fair value of warrants that vested of $46,000.

 

In the nine-month period ending September 30, 2025, the Company extended the expiration date of warrants to purchase 13,796,200 shares of common stock. The warrants had been issued to certain consultants and certain investors, and the modifications were executed to compensate the warrant holders for services provided. The Company measured the fair value of the modified warrants as of the modification date and compared it to the fair value of the warrants immediately before modification. The incremental fair value resulting from the modification was determined to be $511,000 using a Black-Scholes Option Pricing model with the following assumptions: life of 1 to 2 years; risk free interest rate of 3.94% to 4.31%; volatility of 133% to 154% and dividend yield of 0%. The warrants were fully vested on the modification date, and the full incremental fair value of $511,000 was recognized as stock-based compensation - warrant modification.

 

At September 30, 2025, the Company’s common stock was $0.26 per share. At September 30, 2025, the aggregate intrinsic value of warrants outstanding was $11,175,000.

 

In the nine-month period ending September 30, 2024, the Company issued warrants to purchase 666,663 shares of common stock in exchange for services. The warrants are exercisable at a price range of $0.03 to $0.07, vesting up to one month from the date of grant, and expiring one to two years from the date of grant. Total fair value of these warrants at grant date was $32,000 using the Black-Scholes Option Pricing model with the following assumptions: life of one to two years; risk free interest rate of 3.55% to 4.97%; volatility of 169% to 188% and dividend yield of 0%. During the nine-month period ended September 30, 2024, the Company recognized compensation costs based on the fair value of warrants that vested of $32,000.