Note 16 – Common Stock Options

Stock Incentive Plan

On February 12, 2020, the Company’s stockholders approved our 2019 Stock Incentive Plan (the “2019 Plan”), which had been adopted by the Company’s Board of Directors (the “Board”) as of December 10, 2019. The 2019 Plan provides for the issuance of up to 10,000,000 shares of common stock to the Company and its subsidiaries’ employees, officers, directors, consultants and advisors, stock options (non-statutory and incentive), restricted stock awards, stock appreciation rights (“SARs”), restricted stock units (“RSUs”) and other performance stock awards. Options granted under the 2019 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. Unless sooner terminated in accordance with its terms, the Stock Plan will terminate on December 10, 2029.

Common Stock Options Issued for Services

On February 8, 2019, the Company awarded cashless options to a service provider to acquire up to 100,000 shares of common stock, exercisable at $0.50 per share over a thirty-six (36) month period from the origination date. The options vest as to (i) 8,333 shares on the 8^th day of each subsequent month for the following eleven months, and (ii) 8,337 shares on the one-year anniversary of the effective date. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 105% and a call option value of $2.3658, was $236,582. The options are being expensed over the vesting period, resulting in $211,303 of stock-based compensation expense during the year ended December 31, 2019. As of December 31, 2019, a total of $25,279 of unamortized expenses are expected to be expensed over the vesting period.

On February 8, 2019, the Company awarded cashless options to one of our directors to acquire up to 125,000 shares of common stock, exercisable at $0.50 per share over a thirty-six (36) month period from the origination date. The options vest as to (i) 10,416 shares on the 8^th day of each subsequent month for the following eleven months, and (ii) 10,424 shares on the one-year anniversary of the effective date. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 105% and a call option value of $2.3727, was $296,593. The options are being expensed over the vesting period, resulting in $264,903 of stock-based compensation expense during the year ended December 31, 2019. As of December 31, 2019, a total of $31,690 of unamortized expenses are expected to be expensed over the vesting period.

On January 28, 2019, the Company awarded cashless options to a service provider to acquire up to 500,000 shares of common stock, exercisable at $0.50 per share over a thirty-six (36) month period from the origination date. The options vest as to (i) 41,666 shares on the 8^th day of each subsequent month for the following eleven months, and (ii) 41,674 shares on the one-year anniversary of the effective date. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 105% and a call option value of $1.8305, was $915,230. The options are being expensed over the vesting period, resulting in $845,021 of stock-based compensation expense during the year ended December 31, 2019. As of December 31, 2019, a total of $70,209 of unamortized expenses are expected to be expensed over the vesting period.

On January 28, 2019, the Company awarded cashless options to a service provider to acquire up to 100,000 shares of common stock, exercisable at $0.50 per share over a thirty-six (36) month period from the origination date. The options vest as to (i) 8,333 shares on the 8^th day of each subsequent month for the following eleven months, and (ii) 8,337 shares on the one-year anniversary of the effective date. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 105% and a call option value of $1.8381, was $183,805. The options are being expensed over the vesting period, resulting in $169,705 of stock-based compensation expense during the year ended December 31, 2019. As of December 31, 2019, a total of $14,100 of unamortized expenses are expected to be expensed over the vesting period.

Options Exercised

On August 28, 2019, a total of 51,040 shares of common stock were issued upon exercise on a cashless basis of options to purchase 58,331 shares of common stock at a price $0.50 per share. No options were exercised during the period from inception (March 27, 2018) to December 31, 2018.

The following is a summary of information about the Stock Options outstanding at December 31, 2019.

The following is a summary of activity of outstanding stock options: