Stock Option Plans and Agreements

3 Months Ended

Mar. 31, 2022

Stock Option Plans and Agreements

Stock Option Plans and Agreements

Note 9. Stock Option Plans and Agreements

At the annual meeting of stockholders of the Company held on January 26, 2022; the Company’s stockholders voted to approve the Company’s 2021 Equity Incentive Plan (“2021 Plan”). The maximum number of shares of Common Stock available for grant and issuance under the 2021 Plan will be (a) 4,500,000, plus (b) any shares of Common Stock that are subject to options granted under the Prior Plans that expire, are forfeited or canceled or terminate for any other reason without the issuance of shares under the Prior Plans on or after January 26, 2022, plus (c) any shares of Common Stock that are subject to options granted under the Prior Plans that are used to pay the exercise price of an option or withheld to satisfy the tax withholding obligations related to any option under the Prior Plans on or after January 26, 2022.

The Company has approved stock options plans and agreements covering up to an aggregate of 16,294,500 shares of common stock. Such options may be designated at the time of grant as either incentive stock options or nonqualified stock options. Stock based compensation consists of charges for stock option awards to employees, directors and consultants.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. 10,000 options were granted for the three months ended March 31, 2022. 385,000 options were granted for the three months ended March 31, 2021. The following assumptions were used for the three months ended March 31, 2022.

Risk-free interest rate	1.26	%
Expected dividend yield	0	%
Expected stock price volatility	130	%
Expected life of options (years)	2.75

The Company recorded expense for options issued to employees and independent service providers of $923 and $28,248 for the three months ended March 31, 2022 and 2021, respectively.

35,000 options vested during the three months ended March 31, 2022.

The Company issued 750,000 performance-based stock options during 2021 at $0.245 per share to an executive of the Company. Certain revenue targets must be made to grant the options in three tranches of 250,000 shares each. The unrecognized compensation expense for these options is approximately $135,800 at March 31, 2022.

A summary of all stock option activity for the three months ended March 31, 2022 follows:

	Number of			Weighted		Remaining	Aggregate
	Options			Average		Contractual	Intrinsic
	Outstanding			Exercise Price		Term	Value
Outstanding at December 31, 2021		10,755,000		$	0.08
Granted		10,000			0.13
Expired		(60,000	)		0.12
Outstanding at March 31, 2022		10,705,000		$	0.08	3.1 years	$	973,100
At March 31, 2022- vested or expected to vest		9,955,000		$	0.07	3.0 years	$	973,100
Exercisable		9,955,000		$	0.07	3.0 years	$	973,100