Quarterly report pursuant to Section 13 or 15(d)

STOCK OPTIONS

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STOCK OPTIONS
 3 Months Ended
Mar. 31, 2024
Share-Based Payment Arrangement [Abstract]  
STOCK OPTIONS

NOTE 10- STOCK OPTIONS

 

On November 27, 2023, the Company’s Board of Directors approved the 2023 Equity Incentive Plan (the “Equity Plan”). The Equity Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock awards, restricted stock unit awards, and other stock-based awards, collectively, the “Stock Awards”. Stock Awards may be granted under the Equity Plan to the Company’s, and its subsidiaries’, employees, officers, directors and consultants. The maximum number of shares of Class A common stock available for issuance under the Equity Plan is 100,000,000 shares.

 

On January 1, 2024, the Company entered into agreements with employees and consultants for services to be performed. As consideration therefore, the Company granted stock options (the “Options”) under the Company’s Equity Plan to purchase up to 4,660,000 shares of Class A common stock. Options were valued using the Black-Scholes option pricing model under the following assumptions as found in the table below. There were no stock options issued or outstanding for the three months ended March 31, 2023.

 

    Number of                                            
    Stock     Stock     Strike     Expected     Interest     Dividend     Expected     Fair  
Date   Options     Price1     Price     Volatility     Rate     Rate     Term (years)2     Value  
1/1/2024     4,660,000     $ 0.16     $ 0.17       134.97 %     4.00 %     0.00 %     4.0     $ 731,548  

 

1 Grant exercise price is based on the prior trading day’s closing price of $0.164.

2 Options granted vest over various time periods ranging from two to four years with the majority vesting over a four-year term.

 

 

A summary of the status of the Company’s outstanding stock options and changes during the periods is presented below:

 

    Shares available
to purchase		     Weighted Average     Weighted Average
Remaining Contractual		     Aggregate  
    with options     Exercise Price     Term (in years)     Intrinsic Value  
Outstanding, December 31, 2023     -     $ -       -     $ -  
Issued     4,660,000       0.17       9.76        
Exercised     -       -       -       -  
Cancelled     -       -       -       -  
Expired     -       -       -       -  
Outstanding, March 31, 2024     4,660,000     $ 0.17       9.76     $ -  
                                 
Exercisable, March 31, 2024     590,624     $ 0.17       9.76     $ -  

 

The fair value of stock options granted and vested during the three months ended March 31, 2024 was $731,548 and zero, respectively.

 

The compensation expense attributed to the issuance of the stock options is recognized as they are vested. Total compensation expense related to the stock options was $92,719 and zero for the three months ended March 31, 2024 and 2023, respectively, and was included in compensation expense on the statement of operations. As of March 31, 2024, there was $638,829 in future compensation cost related to non-vested stock warrants.

 

The aggregate intrinsic value as of March 31, 2024 is zero for total outstanding and exercisable warrants, which was based on our estimated fair value of the common stock of $0.14, had all option holders exercised their options as of that date, net of the aggregate exercise price.