Quarterly report pursuant to Section 13 or 15(d)

OPTIONS AND WARRANTS

v3.19.3
OPTIONS AND WARRANTS
9 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
OPTIONS AND WARRANTS

NOTE 11 – OPTIONS AND WARRANTS


Stock Options:


The Company used the following assumptions to estimate the fair value of options granted under its stock option plans for the three and nine months ended September 30, 2019 and 2018:


 

 

For the nine months ended
September 30,

 

 

 

2019

 

 

2018

 

Risk-free interest rate (weighted average)

 

 

2.37

%

 

 

0.00

%

Expected volatility (weighted average)

 

 

132.25

%

 

 

0.00

%

Expected term (in years)

 

 

4

 

 

 

0

 

Expected dividend yield

 

 

0.00

%

 

 

0.00

%

 

Risk-Free Interest Rate

The risk-free interest rate assumption was based on U.S. Treasury instruments with a term that is consistent with the expected term of the Company’s stock options.

 

 

Expected Volatility

The expected stock price volatility for the Company’s common stock was determined by examining the historical volatility and trading history for its common stock over a term consistent with the expected term of its options.



Expected Term


The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. It was calculated based on the Company’s historical experience with its stock option grants.

 

 

Expected Dividend Yield

The expected dividend yield of 0% is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not anticipate paying any dividends in the near future.

 

 

Forfeitures

Stock compensation expense recognized in the statements of operations for the nine months ended September 30, 2019 and 2018 is based on awards ultimately expected to vest, and it has been reduced for estimated forfeitures.


The following table summarize all options grants to consultants, directors and employees for the three and nine months ended September 30, 2019 and September 30, 2018 and the related changes during these periods are presented below.


 

 

September 30,
2019

 

 

September 30,
2018

 

Options outstanding and exercisable

 

 

5,042,500

 

 

 

4,600,000

 

Weighted-average exercise price

 

$

0.40

 

 

$

0.42

 

Aggregate intrinsic value

 

$

—

 

 

 

—

 

Weighted-average remaining contractual term (years)

 

 

4.9

 

 

 

4.3

 


The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value.


During the nine months ended September 30, 2019, 2,500,000 options were issued and 25,000 options were cancelled.


Stock Warrants:


The Company used the following assumptions to estimate the fair value of warrants granted under its stock warrant plans for the nine months ended September 30, 2019 and 2018:


 

 

For the nine months ended
September 30,

 

 

 

2019

 

 

2018

 

Risk-free interest rate (weighted average)

 

 

2.38

%

 

 

2.72

%

Expected volatility (weighted average)

 

 

122.22

%

 

 

132.94

%

Expected term (in years)

 

 

3

 

 

 

3

 

Expected dividend yield

 

 

0.00

%

 

 

0.00

%


The following table summarize all warrants grants to consultants, directors and employees as well as investors for the nine months ended September 30, 2019 and the related changes during these periods are presented below.


 

 

September 30,
2019

 

 

September 30,
2018

 

Warrants outstanding and exercisable

 

 

30,276,190

 

 

 

9,025,000

 

Weighted-average exercise price

 

$

0.20

 

 

$

0.37

 

Aggregate intrinsic value

 

$

2,032,917

 

 

123,250

 

Weighted-average remaining contractual term (years)

 

 

3.95

 

 

 

4.32

 


During the three months ended September 30, 2019 and 2018, total stock-based compensation expense amounted to $252,510 and $679,542, respectively. During the nine months ended September 30, 2019 and 2018, total stock-based compensation amounted to $1,371,847 and $1,165,633, respectively.