Annual report pursuant to Section 13 and 15(d)

STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN

STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN

NOTE 16 – STOCK-BASED COMPENSATION AND EMPLOYEE BENEFIT PLAN

Except as noted below, we do not have a qualified stock option plan, but have issued stock purchase warrants and stock options on a discretionary basis to employees, directors, service providers, private placement participants and outside consultants.

The Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards. The Black Scholes option pricing model was used to estimate the fair value of the options granted. This option pricing model requires a number of assumptions, of which the most significant are the expected stock price volatility and the expected option term (the amount of time from the grant date until the options are exercised or expire). The Company does not estimate forfeitures, and accounts for forfeitures as they occur. The Company estimated a volatility factor utilizing a weighted average of comparable published volatilities. The Company applied the simplified method to determine the expected term of all stock-based compensation grants. The risk-free interest rate is based on or approximates the U.S. Treasury yield curve in effect at the time of the grant.

Stock compensation expense for stock options is recognized on a straight-line basis over the vesting period of the award. The Company accounts for stock options as equity awards.

The weighted average estimated fair value of stock option grants and the weighted average assumptions that were used in calculating such values for the years ended December 31, 2021, and 2020 are as follows:

	Year Ended
	December 31,
	2021		2020

Expected volatility		-		133.92% - 133.97	%
Expected dividend yield		-		-
Risk-free interest rates		-		0.29% - 0.30	%
Expected term (in years)		-		3.0

A summary of stock option activity for the year ended December 31, 2021, and 2020 is presented as follows:

SCHEDULE OF STOCK OPTION ACTIVITY

						Weighted		Weighted
	Weighted					Average		Average
	Average		Number of			Remaining		Optioned		Aggregate
	Exercise		Optioned			Contractual		Grant Date		Intrinsic
	Price		Shares			Term in Years		Fair Value		Value

Balance as of December 31, 2019	$	0.69		1,575,000			3.82	$	0.04	$	-

Granted		0.10		90,000					0.06
Exercised		-		-					-
Cancelled/expired		0.54		(25,000	)				0.19

Balance as of December 31, 2020	$	0.66		1,640,000			2.83	$	0.04	$	-

Granted		-		-					-
Exercised		-		-					-
Cancelled/expired		0.60		(50,000	)				0.19

Balance as of December 31, 2021	$	0.67		1,590,000			1.91	$	0.04	$	-

Vested and exercisable as of December 31, 2021	$	0.67		1,590,000			1.91	$	0.04	$	-

For the years ended December 31, 2021, and 2020, we recorded stock-based compensation awarded to employees of $12,600 and $19,000, respectively, which is included in selling, general and administrative expense in our consolidated statements of operations.

As of December 31, 2021, there was no unrecognized compensation cost related to non-vested stock options.

Employee Benefit Plan

The Company has a defined contribution 401(k) plan that covers substantially all employees. Additionally, at the discretion of management, the Company may make contributions to eligible participants, as defined. During the years ended December 31, 2021, and 2020, we made no contributions in each year.