STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

NOTE 12 – STOCK-BASED COMPENSATION

Options

Pursuant to the Merger, the Company’s Common Stock and corresponding outstanding options survived. The below information details the Company’s associated option activity.

As of September 30, 2023, the Company had options to purchase Common Stock that were outstanding under three stock option plans – the 2017 Equity Incentive Plan (the “2017 Plan”), the 2015 Equity Incentive Plan (the “2015 Plan”) and the 2005 Stock Plan (the “2005 Plan”). Under the 2017 Plan, up to 2,000,000 shares of the Company’s Common Stock may be issued pursuant to awards granted in the form of nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards. Under the 2015 and 2005 Plans, taken together, up to 27,250,000 shares of the Company’s Common Stock may be issued pursuant to awards granted in the form of incentive stock options, nonqualified stock options, restricted and unrestricted stock awards, and other stock-based awards

Employees, consultants, and directors are eligible for awards granted under the 2017 and 2015 Plans. Since the adoption of the 2015 Plan, no further awards may be granted under the 2005 Plan, although options previously granted remain outstanding in accordance with their terms.

Compensation based stock option activity for qualified and unqualified stock options are summarized as follows:

				Weighted
For the nine months ended September 30, 2023				Average
	Shares			Exercise Price
Outstanding at January 1, 2023		25,690,261		$	0.23
Expired or cancelled		(1,512,500	)		0.46
Outstanding at September 30, 2023		24,177,761			0.21

				Weighted
For the nine months ended September 30, 2022				Average
	Shares			Exercise Price
Outstanding at January 1, 2022		16,592,620		$	0.30
Expired or cancelled		(2,359	)		11.88
Issued		9,100,000			0.10
Outstanding at September 30, 2022		25,690,261		$	0.23

Information on compensation-based stock option activity for qualified and unqualified stock options for the year ended December 31, 2021 can be found in our Annual Report on Form 10-K/A for the year ended December 31, 2022 filed with the SEC on April 19, 2023.

The following table summarizes information about options to purchase shares of the Company’s Common Stock outstanding and exercisable at September 30, 2023:

				Weighted-		Weighted-
				Average		Average
		Outstanding		Remaining Life		Exercise		Number
Exercise prices		Options		In Years		Price		Exercisable
$	0.1 to 0.15		16,250,000		8.4	$	0.11		6,057,500
	0.16 to $0.21		5,502,761		7.7		0.16		5,502,761
	0.22 to $0.37		1,550,000		4.2		0.27		1,550,000
	0.72 to $1.42		500,000		2.4		0.72		500,000
	1.44 to $15.00		375,000		1.6		4.14		375,000
			24,177,761		7.7	$	0.21		13,985,261

The compensation expense attributed to the issuance of the options is recognized as they are vested. The employee stock option plan stock options are generally exercisable for ten years from the grant date and vest over various terms from the grant date to three years.

As of September 30, 2023, there was no unamortized stock compensation cost related to the stock options granted during the year ended December 31, 2022. Of the approximately 14 million unvested stock options, the vesting criteria for 7.3 million options is still being evaluated as on the date of this Report, as those options are subject to individual milestone achievements. For more information on the stock options, refer to our 2022 Annual Report on Form 10-K/A filed with the SEC on April 19, 2023.

The Company amortized $0 stock compensation expense during the nine months ended September 30, 2023 on the 2021 and 2022 grants. The Company recorded $0.6 million of similar expense during the same period of 2022.

Warrants

The Company has issued warrants in connection with the various financings conducted by the Company. For mor information on the warrant issuances, refer to our 2022 Annual Report on Form 10-K/A filed with the SEC on April 19, 2023.

The issuance of warrants to purchase shares of the Company’s Common Stock, including those attributed to debt issuances, as of September 30, 2023 and 2022 are summarized as follows:

For the nine months ended September 30, 2023				Average
	Shares			Exercise Price
Outstanding at January 1, 2023		81,072,855		$	0.18
Issued during the nine months ended September 30, 2023		11,300,000			0.12
Cancelled during the nine months ended September 30, 2023		(42,737,500	)		0.20
Outstanding at September 30, 2023		49,635,355		$	0.15

For the nine months ended September 30, 2022				Average
	Shares			Exercise Price
Outstanding at January 1, 2022		53,314,424		$	0.20
Issued during the nine months ended September 30, 2022		38,623,816			0.15-0.20
Exercised / cancelled during the nine months ended September 30, 2022		(9,615,385	)		0.13
Outstanding at September 30, 2022		82,322,855		$	0.18

The following table summarizes information about warrants outstanding and exercisable at September 30, 2023:

		Outstanding and exercisable
				Weighted-		Weighted-
				Average		Average
		Number		Remaining Life		Exercise		Number
Exercise Price		Outstanding		in Years		Price		Exercisable
$	0.13		961,539		3.15		0.13		961,539
	0.15		33,000,066		0.50		0.15		33,000,066
	0.20		4,373,750		3.50-3.73		0.20		4,373,750
	0.20		11,300,000		1.77		0.12		11,300,000
			49,635,355		1.12	$	0.15		49,635,355