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EQUITY
 6 Months Ended
Jun. 30, 2025
Equity [Abstract]  
EQUITY

NOTE 5—EQUITY

 

(a) General

 

At June 30, 2025 and December 31, 2024, the Company had issued 50,316,672 shares and had 46,881,475 shares of its common stock outstanding with a par value $0.01 per share. Holders of outstanding common stock are entitled to receive dividends when, as and if declared by the Board and to share ratably in the assets of the Company legally available for distribution in the event of a liquidation, dissolution or winding up of the Company.

 

(b) Summary Employee Option Information

 

The Company’s stock option plan provides for the grant to officers, directors, third party contractors and other future key employees of options to purchase shares of common stock. The purchase price may be paid in cash or, if the option is “in-the-money”, it is automatically exercised “net”. In a net exercise of an option, the Company does not require a payment of the exercise price of the option from the optionee but reduces the number of shares of common stock issued upon the exercise of the option by the smallest number of whole shares that has an aggregate fair market value equal to or in excess of the aggregate exercise price for the option shares covered by the option exercised. Each option is exercisable to one share of the Company’s common stock. Most options expire within six years from the date of the grant and generally vest on the first anniversary date of their issuance. Pursuant to the Equity Incentive Plan the Company’s board of directors approved on November 12, 2018, an aggregate of 6,360,000 options have been issued to directors and investor relations professionals as of June 30, 2025.

 

The Company utilized the Black-Scholes option-pricing model to estimate fair value, utilizing the following assumptions for the options issued during the six months ended June 30, 2024 (all in weighted averages):

 

   Six Months Ended June 30, 2024 
Risk-free interest rate    4.3%
Expected term of options, in years   5.00 
Expected annual volatility    116.9%
Expected dividend yield   0%
Determined weighted average grant date fair value per option   $0.06 

 

No options were issued during the six months ended June 30, 2025.

 

The expected term of the options represents an estimate of the length of time until the expected date of exercising the options. Options granted have a maximum life of 7 years. With respect to determining expected exercise behavior, the Company has grouped its option grants into certain groups to track exercise behavior and establish historical rates. The Company estimated volatility by considering historical stock volatility over the expected term of the option. The risk-free interest rates are based on the U.S. Treasury yields for a period consistent with the expected term. The dividend yield of 0% is based on the Company’s history and expectation of dividend payout. The Company has not paid and does not anticipate paying dividends in the near future.

 

 

(c) Summary Option Information

 

A summary of the Company’s option plans for the six months ended June 30, 2025, is presented below (unaudited):

 

   Number   Weighted 
   of   Average 
   Options   Exercise 
   (in shares)   Price 
Outstanding, December 31, 2024   6,360,000   $0.14 
Granted   -    - 
Outstanding, June 30, 2025   6,360,000   $0.14 
Exercisable, June 30, 2025   6,360,000   $0.14 

 

Stock-based compensation expense was $8,838 and $97 in the six and three months ended June 30, 2025, respectively.

 

The total compensation cost related to non-vested awards not yet recognized was approximately $27,000 as of June 30, 2024. As of June 30, 2024, 600,000 options were unvested. These options vested in April 2025. There was no unrecognized compensation cost related to non-vested awards as of June 30, 2025.

 

(d) Warrants

 

The Company has issued warrants at exercise prices equal to or greater than the market value of the Company’s common stock at the date of issuance. A summary of warrant activity follows (unaudited):

 

   Number of   Weighted 
   shares   Average 
   underlying   Exercise 
   warrants   Price 
Outstanding, December 31, 2024   3,000,000   $0.12 
Granted   -    -
Exercised   -    -
Forfeited or expired   3,000,000   $(0.12)
Outstanding, June 30, 2025   0   - 

 

The warrant agreements were amended on May 12, 2023 to extend the expiration date to June 28, 2025. The warrants expired on June 28, 2025.