The Company periodically issues stock options and warrants to employees and non-employees in capital raising transactions, for services, and for financing costs.

Options

Options vest according to the terms of the specific grant and expire from 2 to 10 years from date of grant. The weighted-average, remaining contractual life of employee and non-employee options outstanding at June 30, 2026 was 6.1 years. Stock option activity for the period January 1, 2026, up to June 30, 2026, was as follows:

The weighted average exercise prices, remaining contractual lives for options granted, exercisable, and expected to vest as of June 30, 2026 were as follows:

As of June 30, 2026, the market price of the Company’s stock was $0.18 per share. At June 30, 2026, the aggregate intrinsic value of the options outstanding at June 30, 2026 was $8,340,000.

During the six month period ended June 30, 2026, options to acquire 1,035,561 shares of common stock were exercised resulting in proceeds to the Company of $39,000.

Options issued to Officers and Directors

In the six-month period ending June 30, 2026, the Company issued options to purchase 833,333 shares of common stock to members of the Board of Directors, including 500,000 options issued to the Company’s CEO/CFO pursuant to the Director Compensation Policy. 833,333 options are exercisable at $0.15 per share and vest over one year. Total fair value of these options at grant date was $125,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 5 years; risk free interest rate of 4.19%; volatility of 189% and dividend yield of 0%. During the six-month period ended June 30, 2026, the Company recognized compensation costs based on the fair value of options that vested of $62,000 to these officers and directors.

Options issued for services

In the six-month period ending June 30, 2026, the Company issued options to purchase 1,000,000 shares of common stock to its corporate secretary as compensation. The options are exercisable at a price of $0.10, fully vested, and expire three years from the date of grant. Total fair value of these options at grant date was $60,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 1.5 years; risk free interest rate of 3.84%; volatility of 144% and dividend yield of 0%. During the six-month period ended June 30, 2026, the Company recognized compensation costs based on the fair value of options that vested of $60,000.

In the six-month period ending June 30, 2026, the Company issued options to purchase 4,900,000 shares of common stock in exchange for services. The options are exercisable at prices ranging from $0.03 to $0.10, were fully vested at date of grant, and expire three to ten years from the date of grant. Total fair value of these options at grant date was $412,000 using the Black-Scholes Option Pricing model with the following assumptions: expected life of 3 to 10 years; risk free interest rate of 3.84% to 4.53%; volatility of 144% to 179% and dividend yield of 0%. During the six-month period ended June 30, 2026, the Company recognized compensation costs based on the fair value of options that vested of $412,000.

During the six-month period ended June 30, 2026 and 2025, the Company recognized compensation costs on the vested fair value of the option awards described above and on options granted in prior periods for an aggregate amount of $765,000 and $628,000, respectively.

Warrants

The following table summarizes certain information about the Company’s stock purchase warrants activity for the period starting January 1, 2026 up to June 30, 2026.

The weighted average exercise prices, remaining contractual lives for warrants granted, exercisable, and expected to vest as of June 30, 2026 were as follows:

At June 30, 2026, the market price of the Company’s common stock was $0.18 per share. At June 30, 2026, the aggregate intrinsic value of warrants outstanding was $2,313,000

In the six-month period ending June 30, 2026, the Company issued warrants to purchase 5,199,998 shares of common stock in exchange for services. The warrants are exercisable at a prices ranging from $0.09 to $0.12, vest up to one month from the date of grant, and expire two to three years from the date of grant. Total fair value of these warrants at grant date was $462,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 2 to 3 years; risk free interest rate of 3.48% to 4.21%; volatility of 115% to 141% and dividend yield of 0%. During the six-month period ended June 30, 2026, the Company recognized compensation costs based on the fair value of warrants that vested of $463,000.

During the period ended June 30, 2026, warrants to acquire 13,036,186 shares of common stock were exercised resulting in cash proceeds of $1,303,000 to the Company. In addition, 199,998 shares were issued upon the cashless exercise of 199,998 warrants at $0.09 to $0.16 per share for $25,000, which were applied to the settlement of vendor accounts payable.