NOTE D - COMMON STOCK AND STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2022

Notes

NOTE D - COMMON STOCK AND STOCK-BASED COMPENSATION

NOTE D – COMMON STOCK AND STOCK-BASED COMPENSATION

COMMON STOCK

On May 18, 2022, we issued 1,313,961 restricted shares of our common stock for cash proceeds of $23,090 pursuant to the exercise of common stock purchase options by various employees. On May 25, 2022, we issued 239,004 restricted shares of our common stock for cash proceeds of $1,989 pursuant to the exercise of common stock purchase options by various employees. On May 26, 2022, we issued 193,668 restricted shares of our common stock for cash proceeds of $1,094 pursuant to the exercise of common stock purchase options by various employees. On March 25, 2021, we issued 203,000 restricted shares of our common stock for cash proceeds of $609 pursuant to the exercise of common stock purchase options by various employees. On October 28, 2021, we issued 486,000 restricted shares of our common stock for cash proceeds of $1,458 pursuant to the exercise of common stock purchase options by an employee and a former employee.

DIVIDEND PAYMENTS

The following table summarizes the dividends paid by the Company on its outstanding common stock for the year ended December 31, 2022:

	Amount	Dividend per share
Year Ended December 31, 2021
Total	$-
Year Ended December 31, 2022
Second quarter	$537,425	$0.028
Third quarter	$57,581	$0.003
Fourth quarter	$57,581	$0.003
Total	$652,587

STOCK-BASED COMPENSATION

We do not have a written employee stock option plan. We have historically generally granted employee stock options with an exercise price equal to the market price of our stock at the date of grant, a contractual term of ten years, and a vesting period of three years ratably on the first, second and third anniversaries of the date of grant (with limited exceptions).

All employee stock options granted during 2022 and 2021 were nonqualified stock options. Stock-based compensation is measured at the grant date, based on the calculated fair value of the option, and is recognized as an expense on a straight-line basis over the requisite employee service period (generally the vesting period of the grant).

The following table summarizes our employee stock option activity for the years ended December 31, 2022 and 2021:

Schedule of Employee Stock Option Activity
	Options	Weighted average exercise price	Weighted average remaining contractual life (years)	Aggregate intrinsic value
Options outstanding, December 31, 2020	2,989,963	$0.012	7.19
Options granted during the year	90,000	0.240
Options exercised during the year	(689,000)	0.003
Options forfeited during the year	(48,334)	0.003
Options outstanding, December 31, 2021	2,342,629	$0.023	7.20
Options granted during the year	4,500	0.200
Options exercised during the year	(1,746,633)	0.015
Options expired during the year	(30,500)	0.003
Options cancelled during the year	(13,666)	0.017
Options outstanding, December 31, 2022	556,330	$0.051	6.74	$184,485
Options exercisable, December 31, 2022	63,167	$0.115	3.12	$17,846

The following table summarizes our non-vested employee stock option activity for years ended December 31, 2022 and 2021:

	2022	2021
Non-vested options outstanding, beginning of year	930,996	1,262,500
Options granted during the year	4,500	90,000
Options vested during the year	(428,667)	(421,504)
Non-vested options forfeited during the year	(13,666)	-
Non-vested options outstanding, end of year	493,163	930,996

The fair values of the granted options are estimated at the date of grant using the Black-Scholes option pricing model. In addition to the exercise and grant date prices of the options, certain weighted average assumptions that were used to estimate the fair value of stock option grants in the respective periods are listed in the table below:

	2022	2021
Risk free interest rate	3.06%	0.78%
Expected lives (in years)	5	5
Expected volatility	266%	289%
Dividend yield	3%	0%

The following table shows total stock options compensation expense included in the Consolidated Statements of Operations and the effect on basic and diluted earnings per share for the years ended December 31:

	2022	2021
Stock options compensation	$11,428	$8,790
Impact on income per share:
Basic and diluted	$-	$-

During the year 2022, 4,500 employee stock options were granted, of which 1,500 will vest one-third on each annual anniversary of the grant date, resulting in $1,547 of stock options compensation. Stock options compensation of $9,881 recorded in the year 2022 was related to options that were granted in prior years. Additionally, 30,500 employee stock options that were related to options granted in prior years, expired, and 13,666 employee stock options that were related to options granted in prior years, were cancelled. At December 31, 2022, there was $12,604 of unrecognized stock options compensation that is expected to be recognized as an expense over a weighted-average period of 1.4 years.

Common Stock Purchase Warrants – A summary of common stock purchase warrant activity for the years ended December 31, 2022 and 2021 follows:

	2022	Weighted Average Exercise Price	2021	Weighted Average Exercise Price
Warrants outstanding, beginning of year	290,000	$0.004	290,000	$0.004
Warrants granted during the year	-	-	-	-
Warrants exercised during the year	290,000	0.004	-	-
Warrants outstanding, end of year	-	$-	290,000	$0.004

On May 25, 2022, the 290,000 warrants outstanding at December 31, 2021 were exercised, for which we received proceeds of $1,150.