| Stock Options and Warrants |
| 9. |
Stock Options and Warrants |
The Company periodically issues
stock options and warrants to employees and non-employees in capital raising transactions, for services and for financing costs. Options
and warrants vest and expire according to terms established at the grant date.
Options
Employee options vest according
to the terms of the specific grant and expire from 5 to 10 years from date of grant. The weighted average, remaining contractual life
of employee and non-employee options outstanding at December 31, 2025 was 6.6 years. Stock option activity for the period January 1, 2024
to December 31, 2025, was as follows:
| Schedule of stock option activity | |
| | |
| |
| | |
Options | | |
Weighted Avg. Exercise Price | |
| Options outstanding, December 31, 2023 | |
| 25,757,155 | | |
$ | 0.14 | |
| Options granted | |
| – | | |
| – | |
| Options exercised | |
| – | | |
| – | |
| Options cancelled | |
| (463,052 | ) | |
| 0.85 | |
| Options outstanding, December 31, 2024 | |
| 25,294,103 | | |
$ | 0.13 | |
| Options granted | |
| 53,100,138 | | |
| 0.04 | |
| Options exercised | |
| (8,640,688 | ) | |
| 0.04 | |
| Options cancelled | |
| (738,552 | ) | |
| 0.48 | |
| Options outstanding, December 31, 2025 | |
| 69,015,001 | | |
$ | 0.07 | |
The weighted average exercise
prices, remaining contractual lives for options granted, exercisable, and expected to vest as of December 31, 2025, were as follows:
| Schedule of weighted average exercise
prices, remaining contractual lives for options granted, exercisable, and expected to vest |
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Outstanding Options |
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Exercisable Options |
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Option
Exercise Price
Per Share |
|
Shares |
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|
Life
(Years) |
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|
Weighted
Average
Exercise Price |
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|
Shares |
|
|
Weighted
Average Exercise
Price |
|
| $0.02 - $0.24 |
|
|
66,515,001 |
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|
6.8 |
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|
$ |
0.06 |
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|
66,515,001 |
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|
$ |
0.06 |
|
| $0.25 - $0.49 |
|
|
2,500,000 |
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|
1.2 |
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|
0.33 |
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2,500,000 |
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|
0.33 |
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69,015,001 |
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|
6.6 |
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|
$ |
0.07 |
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69,015,001 |
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$ |
0.07 |
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As of December 31, 2025, the
market price of the Company’s stock was $0.15 per share. At December 31, 2025 the aggregate intrinsic value of the options outstanding
was $6,051,073.
Options granted during 2025
| |
· |
In January and February 2025, the Company issued options to purchase 17,482,638 shares of common stock to members of the Board of Directors, including 7,218,750 options issued to the Company’s CEO/CFO upon reinstatement of the Director Compensation Policy. 7,656,250 options are exercisable at $0.02 per share, 4,375,000 options are exercisable at $0.04 per share, 2,430,555 options are exercisable at $0.06 per share, 2,187,500 options are exercisable at $0.08 per share, and 833,333 options are exercisable at $0.15 per share. 16,649,305 of the options were fully vested at the date of grant and 833,333 of the options vest through December 31, 2025. Total fair value of these options at grant date was $2,571,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 5 to 6 years; risk free interest rate of 4.47% to 4.57%; volatility of 203% to 205%, and dividend yield of 0%. During the year ended December 31, 2025, the Company recognized compensation costs based on the fair value of options that vested of $2,571,000. |
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· |
In January 2025, the Company issued options to purchase 24,317,500 shares of common stock upon execution of an employment agreement with Mr. Cecil Bond Kyte, the Company’s CEO/CFO. 20,817,500 options are exercisable at $0.03 per share, and 3,500,000 options are exercisable at $0.15 per share, The options are fully vested at the date of grant, and expire in 10 years. Total fair value of these options at grant date was $3,614,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 5 years; risk free interest rate of 4.57%; volatility of 207% and dividend yield of 0%. During the year ended December 31, 2025, the Company recognized compensation costs based on the fair value of options that vested of $3,614,000. |
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· |
In March 2025, the Company issued options
to purchase 1,500,000 shares of common stock to its corporate secretary as compensation. The options are exercisable at a price of $0.03,
one third of the options vested immediately, one third of the options vest in one year, and one third vest in two years. The options expire
in 10 years. Total fair value of these options at grant date was $238,000 using the Black-Scholes Option Pricing model with the following
assumptions: expected life of 6 years; risk free interest rate of 4.32%; volatility of 179% and dividend yield of 0%. During the year
ended December 31, 2025, the Company recognized compensation costs based on the fair value of options that vested of $143,000.
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· |
During 2025, the Company issued options
to purchase 9,800,000 shares of common stock in exchange for services. The options are exercisable at a price of $0.03, vest up to two
years from the date of grant, and expire 5 to 10 years from the date of grant. Total fair value of these options at grant date was $1,575,000
using the Black-Scholes Option Pricing model with the following assumptions: life of 2.5 to 6 years; risk free interest rate of 3.92%
to 4.32%; volatility of 179% to 201% and dividend yield of 0%. During the year ended December 31, 2025, the Company recognized compensation
costs based on the fair value of options that vested of $1,020,000.
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Options granted in 2024
During the year ended December 31, 2024,
the Company did not issue any options.
Warrants
The following table summarizes
certain information about the Company’s stock purchase warrants.
| Schedule of warrants activity | |
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Warrants | | |
Weighted Avg. Exercise Price | |
| Warrants outstanding, December 31, 2023 | |
| 17,953,239 | | |
$ | 0.06 | |
| Warrants granted | |
| 44,340,676 | | |
| 0.04 | |
| Warrants exercised | |
| (1,496,661 | ) | |
| 0.05 | |
| Warrants cancelled | |
| (16,753,245 | ) | |
| 0.06 | |
| Warrants outstanding, December 31, 2024 | |
| 44,044,009 | | |
$ | 0.04 | |
| Warrants granted | |
| 31,823,611 | | |
| 0.10 | |
| Warrants exercised | |
| (30,211,559 | ) | |
| 0.04 | |
| Warrants expired | |
| (33,333 | ) | |
| 0.13 | |
| Warrants outstanding, December 31, 2025 | |
| 45,622,728 | | |
$ | 0.08 | |
At December 31, 2025 the price
of the Company’s common stock was $0.15 per share and the aggregate intrinsic value of the warrants outstanding was $3,091,990.
As of December 31, 2025, 45,589,395 warrants were fully vested and 33,333 warrants vest in January 2026.
| Schedule of weighted average exercise
prices, remaining contractual lives for warrants granted, exercisable, and expected to vest |
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Outstanding Warrants |
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Exercisable Warrants |
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Option
Exercise Price
Per Share |
|
Shares |
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Life
(Years) |
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Weighted
Average
Exercise Price |
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|
Shares |
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|
Weighted
Average Exercise
Price |
|
| $0.02 - $0.24 |
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45,489,396 |
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0.6 |
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$ |
0.08 |
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45,456,063 |
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$ |
0.08 |
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| $0.25 - $0.49 |
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133,332 |
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1.6 |
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0.28 |
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133,332 |
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0.28 |
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45,622,728 |
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|
0.6 |
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$ |
0.08 |
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45,589,395 |
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$ |
0.08 |
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Warrants granted in 2025
| |
· |
During 2025, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 31,423,615 shares of common stock with an exercise price of $0.10 per share, vesting immediately upon grant and expiring one year from the date of grant. |
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· |
During 2025, pursuant to terms of consulting agreements, the Company granted warrants to purchase 399,996 shares of common stock with an exercise price of $0.14 to $0.30 per share, vesting one month from the date of grant and expiring in two years. Total fair value of these options at grant date was approximately $60,000 determined using the Black-Scholes Option Pricing model with the following assumptions: life of 2 years; risk free interest rate of 3.57% to 4.82%; volatility of 147% to 158% and dividend yield of 0%. During the year ended December 31, 2025, the Company recognized compensation expense of $59,000 based on the fair value of the warrants that vested. |
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During 2025, the Company extended the expiration date of warrants to purchase 13,796,200 shares of common stock. The warrants had been issued to certain consultants and certain investors, and the modifications were executed to compensate the warrant holders for services provided. The Company measured the fair value of the modified warrants as of the modification date and compared it to the fair value of the warrants immediately before modification. The incremental fair value resulting from the modification was determined to be $511,000 using a Black-Scholes Option Pricing model with the following assumptions: life of 1 to 2 years; risk free interest rate of 3.94% to 4.31%; volatility of 133% to 154% and dividend yield of 0%. The warrants were fully vested on the modification date, and the full incremental fair value of $511,000 was recognized as stock-based compensation - warrant modification. |
Warrants granted in 2024
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· |
During 2024, pursuant to terms of convertible notes issued, the Company granted warrants to purchase 42,457,348 shares of common stock with an exercise price of $0.04 to $0.07 per share, vesting immediately upon grant and expiring one year from the date of grant. |
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· |
During 2024, pursuant to terms of consulting agreements, the Company granted warrants to purchase 1,883,328 shares of common stock with an exercise price of $0.03 to $0.15 per share, vesting up to one month from the date of grant and expiring one to two years from the date of grant. Total fair value of these options at grant date was approximately $152,000 determined using the Black-Scholes Option Pricing model with the following assumptions: life of 1 to 2 years; risk free interest rate of 3.55% to 4.97%; volatility of 167% to 188% and dividend yield of 0%. During the year ended December 31, 2024, the Company recognized compensation expense of $150,000 based on the fair value of the warrants that vested. |
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