Quarterly report pursuant to Section 13 or 15(d)

STOCK WARRANTS AND STOCK OPTIONS

v3.19.3.a.u2
STOCK WARRANTS AND STOCK OPTIONS
6 Months Ended
Jun. 30, 2019
STOCK WARRANTS AND STOCK OPTIONS  
NOTE 6. STOCK WARRANTS AND STOCK OPTIONS

The Company accounts for employee stock options and non-employee stock warrants under ASC 718 and ASC 505, whereby option costs are recorded based on the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable, utilizing the Black Sholes pricing model. Unless otherwise provided for, the Company covers option exercises by issuing new shares.

 

Beginning on December 12, 2012, Michael A. Lanphere, a related party and non-employee, loaned the Company money for a variety of purposes, some for working capital and some to allow the Company to pay outstanding obligations. Each of these loans was made pursuant to the terms of a Loan Agreement with Promissory Note and Stock Fee (the “Agreements”). Under the terms of the Agreements, Mr. Lanphere was not only entitled to repayment of the principal amount loaned to us, with interest, but also what was termed in the Agreements as a “Stock Fee” that the parties are interpreting as a stock warrant, which permits Mr. Lanphere to acquire shares of our common stock in exchange for an exercise price that was estimated based on the date of the loan agreement. The number of shares to be issued to Mr. Lanphere as a Stock Fee under each Agreement was an estimate and varied based on the loan amount and the price of our common stock on the day of the loan and was calculated by this formula: sixty percent (60%) or eighty percent (80%) of the loan amount divided by the Company’s stock price on the day of the loan, but at a price per share no higher than two and one-half cents ($0.025). Each Stock Fee is fully vested immediately and expires five (5) years from the date of the loan. Although the Stock Fee could be taken by Mr. Lanphere as a stock grant or a stock warrant, due to the fully vested nature of the Stock Fee, Mr. Lanphere is deemed to beneficially own those shares on the date of each Agreement. The number of warrants outstanding to Mr. Lanphere at June 30, 2019 and December 31, 2018 were 27,400,745 and 10,818,583, respectively.

 

The total outstanding balance of all non-employee stock warrants in TransBiotec, Inc. is 40,535,165 and 24,003,003 at June 30, 2019 and December 31 2018, respectively. There were 16,582,162 non-employee detached free-standing stock warrants granted during the six month period ended June 30, 2019 and 7,882,392 non-employee detached free-standing stock warrants granted during the six month period ended June 30, 2018. The fair value of these non-employee stock warrants granted during the six month period ended June 30, 2019 and 2018 totaled $35,030 and $29,701, respectively, and were determined using the Black-Sholes option pricing model based on the following assumptions:

 

 

June 30,

2019

 

June 30,

2018

 

Exercise Price

 

$

0.00188664652 - $0.0062

 

$

0.0042 - $0.0043

 

Dividend Yield

 

0

%

 

0

%

Volatility

 

135% - 138

%

 

141% - 144

%

Risk-free Interest Rate

 

2.31% – 2.53

%

 

2.65% – 2.68

%

Expected Life of Options

 

5 Years

 

5 Years

 

The following table summarizes the changes in the Company’s outstanding warrants during the six months ended June 30, 2019 and 2018 and as of June 30, 2019 and December 31, 2018:

 

 

Warrants

Outstanding

Number of

Shares

 

Exercise

Price Per

Share

 

Weighted Average Remaining Contractual Life

 

Weighted Average

Exercise Price Per Share

 

Aggregate

Intrinsic Value

 

Balance at December 31, 2017

 

16,120,611

 

$

0.0042 - 0.0190

 

4.06 Years

 

$

0.0066

 

$

-

 

Warrants Granted

 

7,882,392

 

$

0.0042- 0.0043

 

4.75 Years

 

$

0.0042

 

$

45,644

 

Warrants Exercised

 

-

 

-

 

Warrants Expired

 

-

 

-

 

Balance at June 30, 2018

 

24,003,003

 

$

0.0042-0.0190

 

3.95 Years

 

$

0.0058

 

$

100,246

 

 

Warrants

Outstanding

Number of

Shares

 

Exercise

Price Per

Share

 

Weighted Average Remaining Contractual Life

 

Weighted Average

Exercise Price Per Share

 

Aggregate

Intrinsic Value

 

Balance at December 31, 2018

 

24,003,003

 

$

0.0042 - 0.0190

 

3.45 Years

 

$

0.0058

 

$

-

 

Warrants Granted

 

16,582,162

 

$

0.0018664652- 0.0062

 

4.72 Years

 

$

0.0032

 

$

22,428

 

Warrants Exercised

 

-

 

-

 

Warrants Expired

 

50,000

 

$

0.019

 

$

0.019

 

Balance at June 30, 2019

 

40,535,165

 

$

0.0018664652-0.016

 

3.68 Years

 

$

0.0048

 

$

-

 

Exercisable at December 31, 2018

 

24,003,003

 

$

0.0042 - 0.0190

 

3.45 Years

 

$

0.0058

 

$

-

 

Exercisable at June 30, 2019

 

40,535,165

 

$

0.0018664652 - 0.0160

 

3.68 Years

 

$

0.0048

 

$

-

 

On April 30, 2018, a related party exercised 450,000 stock options at an exercise price of $0.01 per share.

 

As of June 30, 2019 and December 31, 2018, there were two outstanding stock options to officers, directors, and consultants to purchase 275,000 shares of TransBiotec, Inc. common stock. The first outstanding stock option is dated October 1, 2014 and has an option price on that day of $0.0062, with an option exercise price of $0.25. The second outstanding option is dated October 27, 2014 at an option price on that day of $0.0066 with an option exercise price of $0.007. These stock options vested upon grant. There were no stock options granted during the six months ended June 30, 2019 and 2018.

 

The following table summarizes the changes in the Company’s outstanding stock options during the six month period ended June 30, 2019 and 2018, and as of June 30, 2019 and December 31, 2018:

 

 

Options

Outstanding

Number of

Shares

 

Exercise

Price Per

Share

 

Weighted

Average

Remaining Contractual

Life

 

Weighted Average

Exercise Price Per Share

 

Aggregate

Intrinsic Value

 

Balance at December 31, 2017

 

2,225,000

 

$

0.0045-0.25

 

3.00 Years

 

$

0.0204

 

$

-

 

Options Granted

 

-

 

-

 

Options Exercised

 

450,000

 

$

0.01

 

Options Cancelled

 

-

 

-

 

Options Expired

 

-

 

-

 

Balance at June 30, 2018

 

1,775,000

 

$

0.0045–0.25

 

3.00 Years

 

$

0.0083

 

$

3,000

 

Weighted

 

Weighted

 

Options

 

Average

 

Average

 

Outstanding

 

Exercise

 

Remaining

 

Exercise

 

Aggregate

 

Number of

 

PricePer

 

Contractual

 

PricePer

 

Intrinsic

 

Shares

 

Share

 

Life

 

Share

 

Value

 

Balance at December 31, 2018

 

1,775,000

 

$

0.0045-0.25

 

2.32 Years

 

$

0.0083

 

$

-

 

Options Granted

 

-

 

-

 

Options Exercised

 

-

 

-

 

Options Cancelled

 

1,500,000

 

$

0.0045

 

$

0.0045

 

Options Expired

 

-

 

-

 

Balance at June 30, 2019

 

275,000

 

$

0.007–0.25

 

0.32 Years

 

$

0.0291

 

$

-

 

Exercisable at December 31, 2018

 

1,775,000

 

$

0.0045-0.25

 

2.32 Years

 

$

0.0083

 

$

-

 

Exercisable at June 30, 2019

 

275,000

 

$

0.007-0.25

 

0.32 Years

 

$

0.0291

 

$

-

 

Executive Stock Options

 

The Company had 250,000 outstanding executive stock options exercisable at $0.007 per share as of June 30, 2019 and December 31, 2018.

 

Stock Subscriptions Payable

 

The Company had stock subscriptions payable due to a related party of $2,058 convertible into 424,479 of its common shares at June 30, 2019. The Company had stock subscriptions payable due to a related party of $1,271 convertible into 243,273 of its common shares at December 31, 2018. The Company recorded a related party gain of $15,522 and $15,143 related to the outstanding stock subscriptions payable during the six month period ended June 30, 2019 and 2018, respectively.