Quarterly report pursuant to Section 13 or 15(d)

Warrants

v3.10.0.1
Warrants
 6 Months Ended
Jun. 30, 2018
Warrants and Rights Note Disclosure [Abstract]  
Warrants

NOTE 9 – 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, 2017     88,365,036     $ 0.30       3.50     $ 543,770  
Exercisable January 1, 2017     88,365,036     $ 0.30       3.50     $ 543,770  
Canceled     -                          
Granted     40,259,133                          
Exercised     (798,000 )                        
Forfeited     (392,047 )                        
Outstanding December 31, 2017     127,434,122     $ 0.24       3.15     $ 3,957,689  
Exercisable December 31, 2017     127,434,122     $ 0.24       3.15     $ 3,957,689  
Canceled     -                          
Granted     -                          
Exercised     -                          
Forfeited     -                          
Outstanding June 30, 2018     127,434,122     $ 0.24       2.65     $ 9,809,613  
Exercisable June 30, 2018     127,434,122     $ 0.24       2.65     $ 9,809,613  

 

The Company estimates the fair value of warrants granted on each grant date using the Black-Scholes option valuation model. The expected volatility was calculated based on the historical volatilities of publicly traded peer companies, determined by the Company. The risk-free interest rate used was 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 was zero, as the Company does not anticipate paying a dividend within the relevant timeframe. The expected warrant term is the life of the warrant.

 

The Company did not recognize any stock-based compensation expense related to warrants during the six-months ended June 30, 2018 and 2017, respectively.

 

Warrant exercise

 

During the year ended December 31, 2017, the Company issued 233,217 shares of common stock in connection with the cashless exercise of a warrant for 298,000 shares of common stock at $0.10 per share with 64,783 shares of common stock withheld with an aggregate fair market value equal to the aggregate exercise price.

 

During the year ended December 31, 2017, the Company issued 500,000 shares of common stock in connection with the exercise of a warrant for 500,000 shares of common stock at $0.08 per share in exchange for $40,000.

 

Warrant expiration

 

During the year ended December 31, 2017, warrants to purchase an aggregate of 392,047 shares of restricted common stock expired.

 

Warrant exchange

 

On May 2, 2018, the Company filed a Form S-4 Registration Statement to register 27,705,782 shares of common stock with a par value of $0.001. These shares of common stock would be 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 for $1.44 million in gross proceeds. These amounts were held in escrow as of June 30, 2018, and are not reflected in the June 30, 2018, financial statements.