Annual report pursuant to Section 13 and 15(d)

Options and Warrants

v3.10.0.1
Options and Warrants
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]    
Options and Warrants

Note 9 – Options and Warrants

Warrants – 5BARz International Inc.  

The following table summarizes the warrant activity for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017:

 

 

    Number of
Warrants
  Weighted Average
Exercise Price
  Average Remaining
Contractual Life
Outstanding at December 31, 2016     188,125,232     $ 0.21       1.25  
Exercisable at December 31, 2016     180,125,232     $ 0.22       1.25  
Granted *     4,150,000       0.20       1.89  
Exercised                        
Cancelled/ expired     (6,369,167 )     0.20       —    
Outstanding at March 31, 2017     185,906,065       0.21       1.89  
Exercisable at March 31, 2017     177,906,065       0.21       1.89  
Granted *     6,268,111       0.27       1.26  
Exercised                        
Cancelled/ expired     (15,434,000 )     0.27       —    
Outstanding at June 30, 2017     176,740,176       0.20       1.26  
Exercisable at June 30, 2017     176,740,176       0.20       1.26  
Granted *     4,510,667       0.24       1.70  
Exercised                        
Cancelled/ expired     (15,085,000 )     0.30       —    
Outstanding at September 30, 2017     166,165,843       0.19       1.70  
Exercisable at September 30, 2017     166,165,843       0.19       1.70  

 

  

The Company has authorized capital of 600,000,000 shares, and accordingly should all options, warrants and potentially convertible securities be exercised, the Company may not have enough authorized shares to honor its commitments.

 

 

Options – 5BARz International Inc.

 

The following table summarizes the options for the quarters ended March 31, 2017, June 30, 2017 and September 30, 2017:

 

 

    Number of
Options
  Weighted Average
Exercise Price
  Average Remaining
Contractual Life
Outstanding at December 31, 2016     26,345,000     $ 0.10       5.90  
Exercisable at December 31, 2016     14,997,836     $ 0.12       2.12  
Granted     —         —         —    
Exercised     —         —         —    
Cancelled     (4,075,000 )     0.13       3.55  
Outstanding at March 31, 2017     22,270,000       0.10       6.06  
Exercisable at March 31, 2017     11,842,904       0.11       2.35  
Granted     —         —         —    
Exercised     —         —         —    
Cancelled     (430,000 )     0.12       2.75  
Outstanding at June 30, 2017     21,840,000       0.10       5.74  
Exercisable at June 30, 2017     12,084,603       0.11       3.49  
Granted     —         —         —    
Exercised     —         —         —    
Cancelled     (900,000 )     0.11       2.77  
Outstanding at September 30, 2017     20,940,000       0.10       5.73  
Exercisable at September 30, 2017     11,655,945       0.11       3.49  

 

The Company reports stock-based compensation under ASC 718 “Compensation – Stock Compensation”. ASC 718 requires all share-based payments to employees, including grants of employee stock options, warrants to be recognized in the consolidated financial statements based on their fair values. The Company amortizes the fair value of employee stock options on a straight-line basis over the requisite service period of the awards. The Company accounts for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly, the fair value of these options is being “marked to market” until the measurement date is determined or the date the options are vested.

  

 Options – CelLynx Group, Inc.

  

The number and weighted average exercise prices of all Cellynx Group, Inc. options and warrants exercisable as of March 31, 2017, June 30, 2017 and September 30, 2017 are as follows:  

    Options   Weighted average
exercise price
  Weighted average remaining contract life
Opening at December 31, 2016     65,000,000     $ 0.0002       1.18  
Granted     —         —         —    
Expired     —         —         —    
Outstanding at March 31, 2017     65,000,000     $ 0.0002       0.93  
Exercisable at March 31, 2017     65,000,000     $ 0.0002       0.93  
Granted     —         —         —    
Expired     —         —         —    
Outstanding at June 30, 2017     65,000,000     $ 0.0002       0.68  
Exercisable at June 30, 2017     65,000,000     $ 0.0002       0.68  
Granted     —         —         —    
Expired     —         —         —    
Outstanding at September 30, 2017     65,000,000     $ 0.0002       0.43  
Exercisable at September 30, 2017     65,000,000     $ 0.0002       0.43  
                         

 

Note 10 – Options and Warrants

Warrants – 5BARz International Inc.  

The following table summarizes the warrant activity from December 31, 2015 to December 31, 2017:

    Number of
Warrants
  Weighted Average
Exercise Price
  Average Remaining
Contractual Life
Outstanding at December 31, 2015     102,188,477     $ 0.25       1.20  
Granted     125,483,049       0.19       1.69  
Exercised     (12,441,667 )     0.05       —    
Cancelled/ expired     (27,104,627 )     0.29       —    
Outstanding at December 31, 2016     188,125,232     $ 0.21       1.25  
Exercisable at December 31, 2016     180,125,232     $ 0.22       1.25  
Granted *     99,386,380       0.17       1.79  
Exercised     —         —         —    
Cancelled/ expired     (64,642,183 )     0.25       —    
Outstanding at December 31, 2017     222,869,429       0.18       1.29  
Exercisable at December 31, 2017     222,869,429       0.18       1.29  

 

 

* During the year ended December 31, 2017, the Company granted warrants to purchase 99,386,380 shares of common stock of which 20,100,000 warrants were issued as part of a private placement of units. In addition, the granted warrants include extension warrants to purchase 8,500,000 shares of common stock, issued as a one year extension of expired warrants, in conjunction with a further placement of common stock to that warrant holder. The granted warrants also include the issuance of 66,968,268 warrants to acquire common stock issued to certain Officers and Directors of the Company in conjunction with a debt settlement agreement due to those related parties (see related party Note 14). In addition, warrants to purchase 3,818,112 shares of common stock were issued as part of a unit for services.

  

The Company has authorized capital of 600,000,000 shares, and, accordingly, should all options, warrants and potentially convertible securities be exercised, the Company may not have enough authorized shares to honor its commitments. (see Derivative liabilities balance as of December 31, 2017, 2016 and 2015 and Note 2 – Fair value of Financial Instruments).

 

Options – 5BARz International Inc.

 

The following table summarizes the options from December 31, 2015 to December 31, 2017:

    Number of
Options
  Weighted Average
Exercise Price
  Average Remaining
Contractual Life
Outstanding at December 31, 2015     15,480,000     $ 0.11       5.04  
Granted     11,065,000       0.09       9.03  
Exercised     —         —         —    
Cancelled     (200,000 )     0.15       2.30  
Outstanding at December 31, 2016     26,345,000     $ 0.10       5.90  
Exercisable at December 31, 2016     15,080,027     $ 0.12       2.12  
Granted     2,112,000       0.05       4.97  
Exercised     —         —         —    
Cancelled     (5,505,000 )     0.12       3.34  
Outstanding at December 31, 2017     22,952,000     $ 0.09       5.46  
Exercisable at December 31, 2017     13,952,000     $ 0.09       2.78  

 

During the year ended December 31, 2017, the Company issued 2,112,000 stock options at a strike price ranging from $0.048 to $0.05 per share. The Company reports stock-based compensation under ASC 718 “Compensation – Stock Compensation”. ASC 718 requires all share-based payments to employees, including grants of employee stock options, warrants to be recognized in the consolidated financial statements based on their fair values. The Company amortizes the fair value of employee stock options on a straight-line basis over the requisite service period of the awards.  The Company accounts for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly, the fair value of these options is being “marked to market” until the measurement date is determined or the date the options are vested.

As of December 31, 2017, total unamortized compensation expenses related to unvested stock options were $327,861 (2016 - $91,093, (2015 – $297,674). This amount is expected to be recognized over a weighted average period of 12 months. The Black-Scholes option valuation model is used to estimate the fair value of the options granted. The Company measured the stock options issued at fair value using the Black-Scholes pricing model and are classified within Level 3 of the valuation hierarchy. The significant assumptions and valuation methods that the Company used to determine fair value and the change in fair value of the Company’s derivative financial instruments are provided below:

    Dec 31, 2017   Dec 31, 2016   Jan 22, 2016   Feb 29, 2016   March 31, 2016   June 14, 2016   June 30, 2016   Sept 30, 2016
Stock price   $ 0.042     $ 0.0513     $ 0.12     $ 0.09     $ 0.06     $ 0.09     $ 0.095     $ 0.084  
Volatility     89 %     105 %     92 %     92 %     94 %     106 %     106 %     106 %
Risk free interest rate     1.98 %     1.93 %     1.2 %     1.7 %     1.2 %     1.0 %     1.2 %     1.4 %
Expected life     3 years       5 years       5 years       10 years       10 years       10 years       10 years       6 years  

 

The fair value of the options was determined to be as follows based upon the assumptions provided above:

Valuation date   Number of options   Fair value
January 22, 2016     240,000     $ 19,922  
February 29, 2016     100,000       7,758  
March 31, 2016     1,076,370       47,603  
June 14, 2016     1,000,000       81,492  
June 30, 2016     951,370       61,551  
September 30, 2016     787,516       45,772  
December 31, 2016     812,828       33,019  
December 31, 2017     2,218,096       122,432  

The option valuations are being amortized over vesting terms ranging from immediate to 3 years. For the year ended December 31, 2017, $122,432 and 2016 - $297,117 (2015 –$375,697) were amortized to expense. 

 Options – CelLynx Group, Inc.

  

The number and weighted average exercise prices of all Cellynx Group, Inc. options and warrants exercisable as of December 31, 2017, December 31, 2016 and December 31, 2015 are as follows:  

    Options   Weighted average
exercise price
  Weighted average remaining contract life
Opening at December 31, 2015     69,000,000     $ 0.0002       2.27  
Granted     —         —         —    
Expired       (4,000,000)        0.0003       —    
Outstanding at December 31, 2016     65,000,000     $ 0.0002       1.18  
Exercisable at December 31, 2016     65,000,000     $ 0.0002       1.18  
Granted     —         —         —    
Expired     —         —         —    
Outstanding at December 31, 2017     65,000,000     $ 0.0002       0.18  
Exercisable at December 31, 2017     65,000,000     $ 0.0002       0.18