NOTE 15 – STOCK OPTIONS

During the nine months ended September 30, 2021, the Company granted three- and five-year options to purchase up to 16,651,421 shares of common stock at exercise prices ranging from $0.30 to $1.00 per share. The fair value of these options of approximately $10,142,000 in the aggregate is being amortized to compensation expense over the respective option vesting periods, of which approximately $5,993,000 was amortized during the nine months ended September 30, 2021. Additionally, compensation expense in the first half of 2021 for options issued in previous years, and continuing to be amortized over their respective vesting periods, approximated $638,000.

During the nine months ended September 30, 2020, five-year options to purchase up to 1,064,500 shares of common stock were issued to employees at exercise prices of $0.15 and $0.30 per share. The fair value of these options of approximately $117,000 in the aggregate is being amortized to compensation expense over their respective vesting periods, of which approximately $100,000 was amortized during the nine months ended September 30, 2020. Additionally, compensation expense in the first half of 2020 for options issued in previous years, and continuing to be amortized over their respective vesting periods, approximated $746,000.

During the nine months ended September 30, 2021, options to purchase 251,000 shares of common stock were exercised at prices ranging from $0.21 to $0.45 per share. Of these exercised options, 125,000 were exercised on a cashless basis with the exercise prices paid via the surrender of 72,115 shares of common stock. No options were exercised during the nine months ended September 30, 2020.

During the nine months ended September 30, 2021 and 2020, options to purchase 152,000 and 210,000 shares of common stock, respectively, were forfeited or expired, resulting in an aggregate reduction of amortized compensation expense of zero in 2021 and approximately $208,000 in 2020.

Stock options outstanding and exercisable as of September 30, 2021 were:

 SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE

NOTE 16 – WARRANTS

During the nine months ended September 30, 2021, the Company issued warrants to purchase up to 2,100,000 shares of common stock at exercise prices ranging from $0.50 to $0.83 per share, expiring three and five years from issuance. The fair value of these warrants on their issuance dates approximated $1,487,000 in the aggregate which was charged to compensation expense. Also during this period, the Company issued warrants to Hadron to purchase up to 15,540,540 shares of common stock at an exercise price of $1.087 per share, expiring four years from issuance, as part of the Hadron transaction previously discussed in Note 13 – Mezzanine Equity. The fair value of these warrants on the issuance date of approximately $9.5 million was allocated to the warrant of the $23.0 million of proceeds from the Hadron transaction and recorded in additional paid in capital.

During the nine months ended September 30, 2020, in conjunction with the $21M Debentures discussed in Note 12 – Debentures Payable, the Company issued three-year warrants to purchase up to 180,000 shares of common stock at an exercise price of $0.75 per share. Also during this period, (i) in conjunction with the $8.8M Note discussed in Note 11 – Promissory Notes, the Company issued three-year warrants to purchase up to 750,000 shares of common stock at an exercise price of $0.50 per share, and (ii) in consideration of the Second Extension Agreement, also discussed in Note 11 – Promissory Notes, the Company issued four-year warrants to purchase up to 5,000,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The fair value of these warrants on their issuance dates approximated $639,000 in the aggregate, of which approximately $10,000 was amortized to interest expense in the period and the remainder to be amortized over the terms of the respective debt instruments.

During the nine months ended September 30, 2021, warrants to purchase 1,237,500 shares of common stock were exercised at exercise prices ranging from $0.11 to $0.55 per share. Of these exercised warrants, 437,500 were exercised on a cashless basis with the exercise prices paid via the surrender of 257,438 shares of common stock. No warrants were exercised during the same period in 2020.

During the nine months ended September 30, 2021, warrants to purchase 5,517,474 shares of common stock with exercise prices ranging from $0.90 to $4.30 per share were forfeited. No warrants were forfeited during the same period in 2020.

At September 30, 2021 and 2020, warrants to purchase up to 27,802,734 and 17,735,107 shares of common stock, respectively, were outstanding with exercise prices ranging from $0.11 to $5.50 per share across both periods.