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11. Equity

12 Months Ended

Dec. 31, 2020

11. Equity

The Company has authorized 200,000,000 shares of no par common stock at December 31, 2020 and 2019. In addition, the Company has authorized 1,000,000 shares of no par preferred stock, none of which had been issued at December 31, 2020 or 2019.

2020 Activity:

·The Company offered units for sale under a private placement. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.18 for 24 months. The Company sold 1,481,481 units at $0.135 per unit for net proceeds of $200,000.

·The Company offered units for sale under a private placement. Each unit consisted of one share of the Company’s stock and one half of one stock purchase warrant with each whole warrant exercisable for one share of the Company’s stock at $0.40 for 24 months. The Company sold 9,718,572 units at $0.28 per unit for net proceeds of $2,706,896. Stock issuance costs for this offering was $14,304.

·In July of 2020, 277,778 shares of the Company’s stock were issued to a holder of convertible debt at a rate of $0.18 per share in exchange for $50,000 for a convertible note in accordance with the terms of the note.

·Common shares of 1,041,667 were issued upon exercise of warrants at $0.20 per share for net proceeds of $208,334.

·Common shares of 666,667 were issued upon exercise of warrants at $0.20 per share for net proceeds of $133,333.

·Common shares of 25,000 were issued pursuant to the exercise of stock purchase options at $0.18 per share for $4,500 in cash.

·Common shares of 550,000 were issued upon exercise of 1,125,000 options on a cashless basis.

2019 Activity

·Common shares of 398,575 were issued upon exercise of 1,200,000 warrants on a cashless basis.

Stock Purchase Warrants Outstanding

Transactions in common stock purchase warrants for the years ended December 31, 2020 and 2019 are as follows:

		Number of Warrants		Exercise Prices
Balance December 31, 2018		14,100,123		$0.10-0.22
Exercised		(1,200,000)		0.10
Balance December 31, 2019		12,900,123		$0.18-0.22
Issued		5,600,027		$0.18-0.40
Expired		(10,816,789)		$0.20-0.22
Exercised		(1,708,334)		0.20
Balance December 31, 2020		5,975,027		$0.18-0.40

These warrants expire as follows:

Shares	Exercise Price	Expiration Date
375,000	$0.18	December14, 2023
740,741	$0.18	April 21, 2022
4,859,286	$0.40	August 28, 2022
5,975,027

Stock Options

In April 2014, the Board of Directors of the Company established a stock option plan to authorize the granting of stock options to officers and employees. Upon exercise of the options shares are issued from the available authorized shares of the Company. Options reserved to any one related person on an annual basis may not upon exercise exceed 5% and the aggregate number of all options outstanding will not exceed 10% of the issued outstanding common shares as a whole calculated at that time.

In June 2019, 2,100,000 stock options were granted to non-officer employees. These options vested immediately and are exercisable at $0.14 for 3 years. Total stock based compensation recognized on these options was $190,019. The weighted average fair value of stock option awards granted and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows:

	For the Year Ended December 31, 2019
Weighted average fair value	$0.09
Options issued	2,100,000
Exercise price	$0.14
Expected term (in years)	3.0
Risk-free rate	1.81%
Volatility	98.6%

Transactions in stock options for the years ended December 31, 2020 and 2019 are as follows:

	Number of Options		Exercise Prices
Balance December 31, 2018	7,054,500		0.10-0.18
Granted	2,100,000		0.14
Expired	(3,892,000)		0.10-0.15
Balance December 31, 2019	5,262,500		0.10-0.18
Exercised	(1,150,000)		0.10-0.18
Expired	(2,012,500)		0.10-0.18
Balance December 31, 2020	2,100,000		0.10-0.14

Exercisable at December 31, 2020	2,100,000	$	0.10-0.14

At December 31, 2020, the stock options have an intrinsic value of approximately $258,300 and have a weighted average remaining term of 1.43 years.