Quarterly report pursuant to Section 13 or 15(d)

Warrants

Warrants

6 Months Ended

Jun. 30, 2019

Warrants and Rights Note Disclosure [Abstract]

NOTE 12 – WARRANTS

The following is a summary of the Company’s warrant activity:

	Warrants			Weighted average exercise price		Weighted average remaining contractual term in years		Aggregate intrinsic value
Outstanding January 1, 2018		127,434,122		$	0.24		3.15	$	3,957,689
Exercisable January 1, 2018		127,434,122		$	0.24		3.15	$	3,957,689
Canceled		-
Granted		315,010
Exercised		(9,600,286	)
Forfeited		(101,984	)
Outstanding December 31, 2018		118,046,862		$	0.20		2.32	$	7,848,637
Exercisable December 31, 2018		118,046,862		$	0.20		2.32	$	7,848,637
Expired		(18,405,496	)
Granted		1,316,665
Exercised		-
Forfeited		-
Outstanding June 30, 2019		100,958,031		$	0.13		2.27	$	1,276,243
Exercisable June 30, 2019		100,958,031		$	0.13		2.27	$	1,276,243

The Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. Volatility is calculated based on the historical volatility of the Company. The risk-free interest rate used is based on the U.S. Treasury constant maturity rate in effect at the time of grant for the expected term of the warrants to be valued. The expected dividend yield is zero, because the Company does not anticipate paying a dividend within the relevant timeframe.

The Company did not recognize any stock-based compensation expense related to warrants during the three-months ended June 30, 2019 and 2018.

Convertible note issuance

Warrants to purchase 500,000 shares of stock at $0.20 per share were issued in connection with the issuance of a convertible note. These warrants were immediately vested and expire in five years and were recorded as a discount on the convertible note in the amount of $33,300.

Warrant exchange offering

In June 2018, the Company commenced an offering to exchange outstanding warrants for shares of common stock under a Form S-4 Registration Statement. These shares of common stock were issued to warrant holders in exchange for (i) their outstanding warrants to purchase shares of common stock at $0.625 per share, and (ii) cash payment of $0.15 per share. This offering closed on July 27, 2018, and resulted in an exchange of 9.6 million warrants and $1,440,043 in gross proceeds for 9,600,286 shares of common stock. Stock issuance costs associated with this capital raise totaled $196,006, resulting in a net total of $1,244,037 raised in this offering. As part of this offering, warrants to purchase 315,010 shares of common stock at $0.21 per share were issued to investment bankers for their services.

Warrant expiration

During the six-months ended June 30, 2019, warrants to purchase an aggregate of 18,405,496 were canceled. During the year ended December 31, 2018, warrants to purchase an aggregate of 101,984 expired.