NOTE 10

STOCK OPTIONS AND WARRANTS

Equity Incentive Plans

In October 2019, we adopted our 2019 Stock Incentive Plan (the "2019 Plan"). Under the 2019 Plan, our Board of Directors is authorized to grant both incentive and non-statutory stock options to purchase common stock and restricted stock awards to our employees, directors, and consultants. The 2019 Plan provides for the issuance of 16,000,000 shares. Options generally have a life of 3 to 10 years and exercise price equal to or greater than the fair market value of the Common Stock as determined by the Board of Directors.

Vesting for employees typically occurs over a three-year period or based on performance objective.

The following table sets forth the activity of the options to purchase common stock under the 2019 Plan. The prices represent the closing price of our Common Stock on the OTCQB Market on the respective dates.

	Options Outstanding								Options Exercisable
	Number of Shares		Price per Share Range		Weighted Average Exercise Price		Aggregate Intrinsic Value (1)		Number of Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value (1)
Balance at December 31, 2018		-	$	-	$	-	$	-		-	$	-	$	-
Forfeited		-	$	-	$	-		-		-		-		-
Exercised		-	$	-	$	-		-		-		-		-
Granted		8,320,587	$	0.26-0.29	$	0.26		-		-		-		-
Balance at December 31, 2019		8,320,587	$	0.26-0.29	$	0.26	$	-		360,176	$	0.26	$	-

(1)	The intrinsic value of an option represents the amount by which the market value of the stock exceeds the exercise price of the option of in-the-money options only.

The fair value of each option granted is estimated as of the grant date using the Black-Scholes option pricing model with the following assumptions:

	Years ended December 31,
	2019			2018
Risk-free interest rate range		1.6	%		-
Expected life of option-years		2.9			-
Expected stock price volatility		117	%		-	%
Expected dividend yield		—	%		—	%

The risk-free interest rate is based on U.S. Treasury interest rates, the terms of which are consistent with the expected life of the stock options. Expected volatility is based upon the average historical volatility of our common stock over the period commensurate with the expected term of the related instrument. The expected life and estimated post-employment termination behavior is based upon historical experience of homogeneous groups, executives and non-executes, within our company. We do not currently pay dividends on our common stock nor do we expect to in the foreseeable future.

			Options Outstanding						Options Exercisable
	Range of Exercise Prices		Options Outstanding		Weighted Average Remaining Life in Years		Weighted Average Exercise Price		Options Exercisable		Weighted Average Exercise Price of Options Exercisable
Year ended December 31, 2018	$	-		-		-	$	-		-	$	-
Year ended December 31, 2019	$	0.26-0.29		8,320,587		2.6	$	0.26		360,176	$	0.26

Total Intrinsic Value of

Options Exercised

Total Fair Value of

Options Vested

Year ended December 21, 2018

Year ended December 31, 2019

69,787

For the years ended December 31, 2019, the weighted average grant date fair value of options granted was $0.20 per share. We estimate the fair value of options at the grant date using the Black-Scholes model. For all stock options granted through December 31, 2019, the weighted average remaining service period is 2.6 years.

We recognized $69,787 in stock-based compensation expense, which is recorded in selling, general and administrative expenses on the consolidated statement of operations for the years ended December 31, 2019. Unamortized stock option expense at December 31, 2019 that will be amortized over the weighted-average remaining service period of 2.6 years totaled $1,628,929.

Restricted Stock and Restricted Stock Units

In 2019, we issued 400,000 of restricted stock, to certain employees. Shares issued to employees vest monthly over 1 year on the anniversary dates of their grant. In 2019, 66,666 shares of restricted stock vested.

The following table summarizes our aggregate restricted stock awards and restricted stock unit activity in 2019:

	Number of Unvested Shares			Weighted Average Grant Date Fair Value		Aggregate Value of Unvested Shares

Balance at December 31, 2018		-		$	-	$	-
Granted		400,000		$	0.30	$	120,000
Vested		(66,666	)	$	0.30	$	(20,000	)
Forfeitures		(-	)	$	-	$	(-	)
Balance at December 31, 2019		333,334		$	0.30	$	100,000

We recognized $17,750 in stock-based compensation expense, which is recorded in selling, general and administrative expenses on the consolidated statement of operations for the years ended December 31, 2019, and we will recognize $1,731,179 over the remaining requisite service period.

Unamortized restricted stock and restricted stock unit expense at December 31, 2019 that will be amortized over the weighted-average remaining service period of .8 years totaled $100,000.

Warrants

As of December 31, 2019, and 2018, the Company does not have any outstanding or committed and unissued warrants.