STOCK OPTIONS

6 Months Ended

Jun. 30, 2021

STOCK OPTIONS

9. STOCK OPTIONS

9. STOCK OPTIONS

As of June 30, 2021, the Board of Directors of the Company had granted non-qualified stock options exercisable for a total of 230,177,778 shares of common stock to its officers, directors, and consultants.

On October 19, 2020 and December 22, 2020, the Company issued a total of 210,000,000 non-qualified stock options to five officers, directors and consultants exercisable for a period of five years from the date of issuance at exercise prices ranging from $0.0108 to $0.017 per share. Of these non-qualified options, 5,000,000 vest 1/24th per month over twenty- four months and 205,000,000 vest 1/36th per month over thirty-six months. These non-qualified stock options were valued by an independent valuation firm at $3,726,549 using a modified Black Scholes early exercise model and stock option compensation expense is recorded over the vesting period. A derivative liability and a decrease to additional paid-in capital were recorded for this amount.

On January 28, 2021, the Company issued a total of 20,000,000 non-qualified stock options to an employee and a consultant exercisable for a period of five years from the date of issuance at an exercise prices $0.05 per share. These options vest 1/36th per month over thirty-six months. These non-qualified stock options were valued by an independent valuation firm at $998,134 using a modified Black Scholes early exercise model and stock option compensation expense is recorded over the vesting period. A derivative liability and a decrease to additional paid-in capital were recorded for this amount.

We recognized stock option compensation expense of $353,891 and $0 for the three months ended June 30, 2021 and 2020, respectively, and $804,649 and $0 for the six months ended June 30, 2021 and 2020, respectively. As of June 30, 2021, we had unrecognized stock option compensation expense totaling $3,811,520.

A summary of the Company’s stock options and warrants as of June 30, 2021, and changes during the six months then ended is as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contract Term (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2020		210,177,778	$	0.018		8.65
Granted		20,000,000	$	0.050
Exercised		-	$	-
Forfeited or expired		-	$	-
Outstanding at June 30, 2021		230,177,778	$	0.021		4.49	$	1,060,000
Exercisable at June 30, 2021		45,247,269	$	0.024		4.49	$	216,132

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of our common stock of $0.0219 as of June 30, 2021, which would have been received by the holders of in-the-money options and warrants had the holders exercised their options and warrants as of that date.

The significant assumptions used in the valuation of the derivative liabilities recorded upon issuance of the January 2021 non-qualified stock options are as follows:

Expected life	2.54 to 4.01 years
Risk free interest rates	0.15% - 0.30	%
Expected volatility	326.7% – 362.1	%