Stock Options and Warrants

12 Months Ended

Dec. 31, 2022

Stock Options and Warrants [Abstract]

STOCK OPTIONS AND WARRANTS

9. STOCK OPTIONS AND WARRANTS

Stock for Services

On April 13, 2022, in accordance with an independent Contractor Agreement dated February 22, 2022 between the Company and Alex Cannon, the Company issued 195,086 common shares of the Company’s stock to Alex Cannon for services performed with a price of $0.0173 per share amounting to $3,375 in value.

On August 22, 2022, in accordance with an independent Contractor Agreement dated August 4, 2022 between the Company and Bradley Parscale, the Company issued 14,814,814  common shares of the Company’s stock to Bradley Parscale for services performed with a price of $0.0081 per share amounting to $120,000 in value.

Stock Options

On August 1, 2017, we granted non-qualified stock options to purchase up to 10,000,000 shares of our common stock to a key employee, at a price of $0.01 per share. The stock options vest equally over a period of 36 months and expire August 1, 2022. These options allow the optionee to exercise on a cashless basis, resulting in no cash payment to the company upon exercise. If the optionee exercises on a cashless basis, then the above water value (difference between the option price and the fair market price at the time of exercise) is used to purchase shares of common stock. Under this method, the number of shares of common stock issued will be less than the number of options used to obtain those shares of common stock. On September 30, 2018, the employee exercised, on a cashless basis, 3,324,201 options, resulting in the issuance of 1,233,509 shares of common stock. During the quarter ended March 30, 2021, the employee exercised, on a cashless basis, 6,675,799 options, resulting in the issuance of 5,439,540 shares of common stock. As of December 31, 2021, all stock options issued on August 1, 2017 were fully exercised.

On September 18, 2017, we granted non-qualified stock options to purchase up to 1,800,000 shares of our common stock to three key employees, at a price of $0.05 per share. The stock options vest equally over a period of 36 months and expire September 18, 2022. These options allow the optionee to exercise on a cashless basis. During the year ended December 31, 2020, two of the employees who held 1,200,000 options, collectively, left the company and the options were forfeited, and during the period ended June 30, 2020, a key employee who held 600,000 options left the Company and the options were forfeited.

On January 3, 2018, we granted non-qualified stock options to purchase up to 20,000,000 shares of our common stock to a key employee, at a price of $0.04 per share. During the year ended December 31, 2021, the key employee left the Company and the options were forfeited.

On January 17, 2020, we granted non-qualified stock options to purchase up to 283,000,000 shares of our common stock to ten key employees and three directors, at an exercise price of $0.0019 per share. The stock options vest equally over a period of 36 months and expire January 17, 2025. These options allow the optionee to exercise on a cashless basis, any time after January 17, 2021. During the year ended December 31, 2021, 3,766,668 options were exercised on a cashless basis, resulting in the issuance of 3,366,714 shares of common stock. During the year ended December 31, 2021, a key employee who held 20,000,000 options left the Company, and the options were forfeited. During the year ended December 31, 2022, 4,000,000 options were exercised on a cashless basis, resulting in the issuance of 3,190,923 shares of common stock. During the year ended December 31, 2022, two of the employees who held 2,000,000 options collectively left the company, and the options were forfeited.

On June 2, 2020, we granted non-qualified stock options to purchase up to 17,000,000 shares of our common stock to a director, at an exercise price of $0.0018 per share. The stock options vest equally over a period of 36 months and expire June 2, 2025. These options are exercisable on a cashless basis, any time after June 2, 2021.

On January 5, 2021, we granted non-qualified stock options to purchase up to 368,000,000 shares of our common stock to six key employees and three directors, at an exercise price of $0.0068 per share. The stock options vest equally over a period of 36 months and expire January 5, 2026. These options are exercisable on a cashless basis, any time after January 5, 2022. During the year ended December 31, 2021, a key employee who held 1,000,000 options left the Company, and the options were forfeited.

On August 18, 2021, we granted non-qualified stock options to purchase up to 5,000,000 shares of our common stock to a key employee, at an exercise price of $0.0017 per share. The stock options vest equally over a period of 36 months and expire August 18, 2026. These options are exercisable on a cashless basis, any time after August 18, 2022. During the period ended December 31, 2022, the key employee left the Company, and the options were forfeited.

On February 1, 2022, we granted non-qualified stock options to purchase up to 122,500,000 shares of our common stock to five board members, three of which are independent, and one employee, at an exercise price of $0.0295 per share.  The stock options vest equally over a period of 36 months and expire February 1, 2025. These options are exercisable on a cashless basis, anytime after March 1, 2022.

The Company used the historical industry index to calculate volatility, since the Company’s stock history did not represent the expected future volatility of the Company’s common stock.

The fair value of options granted during the year ended December 31, 2022 and 2021, were determined using the Black Scholes method with the following assumptions:

	Year Ended December 31, 2022			Year Ended December 31, 2021
Risk free interest rate		1.29	%		1.86	%
Stock volatility factor		229	%		272	%
Weighted average expected option life		2.5 years			5 years
Expected dividend yield		0	%		0	%

A summary of the Company’s stock option activity and related information follows:

	Year Ended December 31, 2022					Year Ended December 31, 2021
	Options			Weighted average exercise price		Options			Weighted average exercise price
Outstanding – beginning of year		768,233,332		$	0.0052		429,675,799		$	0.0052
Granted		125,500,000			0.0068		373,000,000			0.0068
Exercised		(4,000,000	)		0.0019		(13,442,467	)		0.0066
Forfeited		(7,000,000	)		0.0127		(21,000,000	)		0.0021
Outstanding – end of year		879,733,332		$	0.0092		768,233,332		$	0.0060
Exercisable at the end of year		684,914,154		$	0.0072		471,914,611		$	0.0063
Weighted average fair value of options granted during the year				$	2,495,600				$	2,580,600

As of December 31, 2022, and December 31, 2021, the intrinsic value of the stock options was approximately $362,102 and $5,256,720, respectively. Stock option expenses for the year ended December 31, 2022, and 2021 were $1,891,371 and $1,247,048, respectively.

The Black Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options.

The weighted average remaining contractual life of options outstanding, as of December 31, 2022 was as  follows:

Exercise prices		Number of options outstanding		Weighted Average remaining contractual life (years)
$	0.0150		35,000,000		0.00
$	0.0131		60,000,000		0.00
$	0.0130		15,000,000		0.00
$	0.0068		367,000,000		0.00
$	0.0053		10,000,000		0.00
$	0.0019		253,233,332		1.05
$	0.0018		17,000,000		1.42
$	0.0295		122,500,000		2.08
			879,733,332

Warrants

During the fiscal year ended December 31, 2021 the Company issued 240,000,001 warrants through four agreements, which are exercisable immediately on a cashless basis at prices ranging from $0.005 to $0.0454 per share. As of December 31, 2022, and 2021, there were 162,703,869 and 162,703,869 warrants outstanding, respectively.

The fair value of warrants granted during the year ended December 31, 2022 and 2021, were determined using the Black Scholes method with the following assumptions:

	Year Ended December 31, 2022			Year Ended December 31, 2021
Risk free interest rate		0.00	%		0.40 – 0.42	%
Stock volatility factor		0.00	%		335.7 – 337.1	%
Weighted average expected warrant life		0 years			5 years
Expected dividend yield		0	%		0	%

A summary of the Company’s warrant activity and related information follows:

	Year Ended December 31, 2022				Year Ended December 31, 2021
	Warrants		Weighted average exercise price		Warrants			Weighted average exercise price
Outstanding – beginning of period		162,703,869	$	0.007		20,912,852		$	0.007
Issued		-		0.000		240,000,001			0.037
Exercised		-		0.000		(98,208,984	)		0.007
Forfeited		-		-		-			-
Outstanding – end of period		162,703,869	$	0.007		162,703,869		$	0.048
Exercisable at the end of period		162,703,869	$	0.007		162,703,869		$	0.048
Weighted average fair value of warrants granted during the period			$	0				$	7,792,900

Warrant expense for the year ended December 31, 2022, and 2021 were zero and $983,571, respectively.

The weighted average remaining contractual life of warrants outstanding, as of December 31, 2022 was as follows:

Exercise prices		Number of warrants outstanding		Weighted Average remaining contractual life (years)
$	0.0875		10,714,286		3.14
$	0.0454		151,000,000		3.14
$	0.0072		989,583		2.95
			162,703,869