| Stockholders' Equity | NOTE 10 – STOCKHOLDERS’ EQUITY Capital Structure On March 28, 2014, in connection
with the Reincorporation (see Note 1), all share and per share values for all periods presented in the accompanying consolidated
financial statements are retroactively restated for the effect of the Reincorporation. The authorized capital
of the Company consists of 750,000,000 shares of common stock, par value $0.0001 per share and 50,000,000 shares of preferred stock,
par value $0.0001 per share, as of December 31, 2018. On March 5, 2016, the Company shareholders voted in favor of an amendment
to its Articles of Incorporation to increase the total number of shares of authorized capital stock to 800,000,000 shares consisting
of (i) 750,000,000 shares of common stock and (ii) 50,000,000 shares of preferred stock from 220,000,000 shares consisting of (i)
200,000,000 shares of common stock and (ii) 20,000,000 shares of preferred stock. Effective March 8, 2018,
we conducted a reverse split of our common stock at a ratio of 1 for 150. All share and per share, information in the accompanying
consolidated financial statements and footnotes has been retroactively restated to reflect the reverse split. Preferred Stock As of December 31, 2018,
there were 50,000,000 shares of Preferred Stock authorized. On March 6, 2016, the Company’s shareholders increased the authorized
shares of its preferred stock to 50,000,000 from 20,000,000. On December 5, 2017, pursuant
to the approval of our board of directors and a majority of the shareholders in each class, we amended the Certificates of Designation
for our Series C, D, E, H, I, J, and K Preferred Stock. The amendments changed the conversion rights of these classes of preferred
stock such that the Maximum Conversion as defined in each such Certificate of Designation was increased from 4.99% to 9.99% of
our outstanding shares of common stock. Series A Convertible Preferred Stock On March 28, 2014, in connection
with the merger with and into the Company’s former subsidiary Great West Resources, Inc., each issued and outstanding share
of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share, was converted into 1/150th shares of
Series A Convertible Preferred Stock, par value $0.0001 per share, for a total of 20,000 issued and outstanding shares of Series
A Convertible Preferred Stock. Pursuant to the Series A Certificate of Designation, the Company designated 20,000 shares of its
blank check preferred stock as Series A Convertible Preferred Stock. Each share of Series A Convertible Preferred Stock is convertible
into 1/150 th As of December 31, 2018,
and 2017, 20,000 shares of Series A Convertible Preferred Stock, $0.0001 par value were authorized with none issued and outstanding. Series B Convertible Preferred Stock On March 28, 2014, in connection
with the merger with and into the Company’s former subsidiary Great West Resources, Inc., each issued and outstanding share
of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share, was converted into 1/150th shares of
Series B Convertible Preferred Stock, par value $0.0001 per share, for a total of 6,666 issued and outstanding shares of Series
B Convertible Preferred Stock. Pursuant to the Series B Certificate of Designation, the Company designated 30,000 shares of its
blank check preferred stock as Series B Convertible Preferred. Each share of Series B Convertible Preferred Stock has a stated
value of $0.0001 per share. In the event of a liquidation,
dissolution or winding up of the Company, the holder of the Series B Convertible Preferred Stock would have preferential payment
and distribution rights over any other class or series of capital stock that provide for Series B Convertible Preferred Stock’s
preferential payment and over our common stock. The Series B Convertible Preferred Stock is convertible into 5/150 th As of December 31, 2018
and 2017, 30,000 shares of Series B Convertible Preferred Stock, $0.0001 par value were authorized with 3,333 issued, outstanding
and convertible into 111 shares of common stock, without regard to beneficial ownership limitations. Series C Convertible Preferred Stock On October 10, 2014, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series C Convertible Preferred
Stock, setting forth the rights, powers, and preferences of the Series C Convertible Preferred Stock. Pursuant to the Series C
Certificate of Designation, as amended on February 19, 2015, the Company designated 4,000,000 shares of its blank check preferred
stock as Series C Convertible Preferred Stock. Each share of Series C Convertible Preferred Stock has a stated value equal to its
par value of $0.0001 per share. In the event of a liquidation, dissolution or winding up of the Company, the holder of the Series
C Convertible Preferred Stock would have preferential payment and distribution rights over any other class or series of capital
stock that provide for Series C Convertible Preferred Stock’s preferential payment and over our common stock. The Series
C Convertible Preferred is convertible into 10/150 th th On February 19, 2015, the
Company filed an amendment to the Certificate of Designation of Rights and Preferences of its Series C Convertible Preferred Stock,
increasing the authorized shares of Series C Convertible Preferred Stock to 4,000,000 from 3,000,000. As per the Certificate
of Designation, for Convertible Preferred Series C Stock, other than in connection with Excepted Issuances, if at any time during
the period beginning on the Closing Date of the Convertible Preferred Series C Stock subscription and ending two (2) years thereafter,
the Company shall issue any Common Stock or securities convertible into or exercisable for shares of Common Stock (or modify any
of the foregoing which may be outstanding) to any person or entity at conversion ratio per share which shall be less than 10/150 th th On May 31, 2017, the Company
issued to a vendor as settlement of Preferred Series C Stock issued for services, 76,763 shares of Series K Preferred Stock, convertible
into 51,175 shares of common stock, in lieu of Series C Preferred Stock. On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series C Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, 4,000,000 shares of Series C Convertible Preferred Stock, $0.0001 par value were authorized; with 1,913,676 and issued,
outstanding, and convertible into 127,578 shares of common stock, without respect to beneficial ownership conversion limitations. As of December 31, 2018,
all price protection rights, “Lower Price Issuance” have expired. Series D Convertible Preferred Stock On October 15, 2014, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series D Convertible Preferred
Stock, setting forth the rights, powers, and preferences of the Series D Convertible Preferred Stock. Pursuant to the Series D
Certificate of Designation, the Company designated 5,000,000 shares of its blank check preferred stock as Series D Convertible
Preferred Stock. Each share of Series D Convertible Preferred Stock has a stated value equal to its par value of $0.0001 per share.
In the event of a liquidation, dissolution or winding up of the Company, the holder of the Series D Convertible Preferred Stock
would have preferential payment and distribution rights over any other class or series of capital stock that provide for Series
D Convertible Preferred Stock’s preferential payment and over our common stock. The Series D Convertible Preferred is convertible
into 20/150 th Each share of Series D
Convertible Preferred Stock entitles the holder to vote on all matters voted on by holders of common stock as a single class. With
respect to any such vote, each share of Series D Convertible Preferred Stock entitles the holder to cast 20/150 th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series D Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, there were 5,000,000 shares of Series D Convertible Preferred Stock authorized; 2,892,109 issued, outstanding and convertible
into 385,615 shares of common stock, without regard to beneficial ownership conversion limitations. Series E Convertible Preferred Stock On February 19, 2015, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series E Convertible Preferred
Stock, setting forth the rights, powers, and preferences of the Series E Convertible Preferred Stock. Pursuant to the Series E
Certificate of Designation, the Company designated 8,746,000 shares of its blank check preferred stock as Series E Convertible
Preferred Stock. Each share of Series E Convertible Preferred Stock has a stated value equal to its par value of $0.0001 per share.
In the event of a liquidation, dissolution or winding up of the Company, the holder of the Series E Convertible Preferred Stock
would have preferential payment and distribution rights over any other class or series of capital stock that provide for Series
E Convertible Preferred Stock’s preferential payment and over our common stock. The Series E Convertible Preferred Stock
is convertible into 10/150 th th
On February 19, 2015, the
Company entered into a share exchange agreement with Global Telesat Communications Limited, a Private Limited Company formed under
the laws of England and Wales (“GTCL”) and all of the holders of the outstanding equity of GTCL (the “GTCL Shareholders”).
Upon closing of the transactions contemplated under the share exchange agreement, the GTCL Shareholders transferred all of the
issued and outstanding equity of GTCL to the Company in exchange for (i) an aggregate of 16,933 shares of the common stock of the
Company and 8,746,000 shares of the newly issued Series E Preferred Stock of the Company with each share of Series E Preferred
Stock convertible into 10/150 th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series E Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, there were 8,746,000 shares of Series E Convertible Preferred Stock authorized; 5,174,200 issued, outstanding and convertible
into 344,947 shares of common stock, without regard to beneficial ownership conversion limitations. Series F Convertible Preferred Stock On December 28, 2015, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series F Convertible Preferred
Stock, setting forth the rights, powers, and preferences of the Series F Convertible Preferred Stock. Pursuant to the Series F
Certificate of Designation, each Series F Convertible Preferred Stock are convertible into 1/150 th th On December 28, 2015, the
Company entered into separate subscription agreements with accredited investors relating to the issuance and sale of $550,000 of
1,099,998 shares of Series F Convertible Preferred Stock at a purchase price of $0.50 per share. On October 28, 2016, issued
to certain prior investors of Series F Convertible Preferred Stock an aggregate of 91,944 shares of Series I Convertible Preferred
stock which is convertible into an aggregate of 61,296 shares of the Company’s common stock in relation to the subscription
of the issuance and sale of $350,000, of shares of Series H convertible preferred stock at a purchase price of $4.00 per share
and the initial conversion ratio of 1/150 th th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series F Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, 1,100,000 Series F Convertible Preferred Stock shares were authorized; 349,999 shares of Series F Convertible Preferred
Stock were issued, outstanding and convertible into 2,333 shares of common stock, without regard to beneficial ownership limitations. Series G Preferred Stock On May 17, 2016, the Company
filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series G Preferred Stock, setting
forth the rights, powers, and preferences of the Series G Preferred Stock. Pursuant to the Series G Certificate of Designation,
the Company designated 10,090,000 shares of its blank check preferred stock as Series G Preferred Stock (the “Preferred G
Shares”), which are convertible into 1/150 th On October 28, 2016, the
Company issued to certain prior investors of Series G Preferred Convertible Shares an aggregate of 23,000 shares convertible Series
I Preferred, which is convertible into an aggregate of 15,333 shares of the Company’s common stock in relation to the subscription
of the issuance and sale of Series H Convertible Preferred Stock $350,000, of shares of at a purchase price of $0.05 per share.
Each share of Series H Preferred is convertible into 1/150 th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series G Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, there were 10,090,000 shares authorized and 5,202,602 shares of Series G Convertible Preferred Stock issued, outstanding
and convertible into 34,684 shares of common stock, without regard to the beneficial ownership limitations. Series H Preferred Stock On October 13, 2016, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series H Preferred Stock,
setting forth the rights, powers, and preferences of the Series H Preferred Stock. Pursuant to the Series H Certificate of Designation,
the Company designated 200,000 shares of its blank check preferred stock as Series H Preferred Stock (the “Preferred H Shares”),
each share of Series H Preferred is convertible into 100/150 th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series H Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, there were 200,000 shares authorized; par value $0.0001, and 13,741 shares of Series H Preferred Stock issued and outstanding
convertible into up to 9,161 shares of common stock without regard to the beneficial ownership limitation. Series I Preferred Stock On October 13, 2016, the
Company filed with the Secretary of State of the State of Nevada a Certificate of Designation for the Series I Preferred Stock,
setting forth the rights, powers, and preferences of the Series I Preferred Stock. Pursuant to the Series I Certificate of Designation,
the Company designated 114,944 shares of its blank check preferred stock as Series I Preferred Stock, each of which is convertible
into 100/150 th th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series I Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, there were 114,944 shares authorized and 49,110 shares of Series I Convertible Preferred Stock issued and outstanding,
convertible into up to 32,739 shares of common stock without regard to the beneficial ownership limitation. Series J Preferred Stock On May 31, 2017, the Company
entered separate subscription agreements with accredited investors relating to the issuance and sale of 50,000 of shares of Series
J Preferred Stock at a purchase price of $10.00 per share, as well as, the issuance of 4,669 shares of Series J Preferred Stock
for accounts payable of $46,694. Each share of Preferred Series J is convertible into 6.6667 shares of the company’s common
stock, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar
events, as subject to adjustment as set forth in the Series J certificate of designation. The Company is prohibited from effecting
a conversion of the Series J Preferred Stock to the extent that, because of such conversion, the investor would beneficially own
more than 4.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to the
issuance of shares of common stock upon conversion of the Series J Preferred Stock. Each share of Series J Preferred Stock entitles
the holder to cast 1/150 th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series J Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. On May 10, 2018, we issued
20,000 shares of our Series J Preferred Stock at their stated value of $10.00 per share to one investor, for total proceeds of
$200,000. Our Series J Preferred Stock is currently convertible to common stock at a price of $1.50 per share and votes on an as-converted
basis, subject to certain conversion limitations. As of December 31, 2018,
there were 125,000 shares authorized and 64,698 shares of Series J Convertible Preferred Stock issued, outstanding and convertible
into 431,319 shares of common stock without regard to the beneficial ownership limitation. As of December 31, 2017,
there were 44,698 shares issued and outstanding of Series J Convertible Preferred Stock and convertible into 297,987 shares of
common stock without regard to the beneficial ownership limitation. Series K Preferred Stock On May 31, 2017, the Company
was required to issue 1,089,389 shares of Series K Preferred Stock, which is convertible into 726,259 shares of the Company’s
common stock, to the certain holders for the consent and anti-dilution rights from the Series J Preferred Stock issuance. In addition,
the Company issued to a vendor as settlement of Preferred Series C Stock issued for services, 76,763 shares of Series K Preferred
Stock, convertible into 51,175 shares of common stock, in lieu of Series C Preferred Stock. Each share of Series K Preferred Stock
is convertible into 100/150 th th On December 5, 2017, the
board of directors and a majority of the shareholders for the respective class of preferred shares, amended the Certificates of
Designation for Series K Preferred Stock. The amendments changed the conversion rights of the class of preferred stock such that
the Maximum Conversion as defined in the Certificate of Designation was increased from 4.99% to 9.99% of our outstanding shares
of common stock. As of December 31, 2018
and 2017, there were 1,250,000 shares authorized; 1,156,866 of Series K Preferred Stock issued, outstanding and convertible into
771,244 shares of common stock, respectively without regard to the beneficial ownership limitation. Series L Preferred Stock On May 11, 2018, we designated
a new series of Preferred Stock entitled “Series L Preferred Stock.” Our Series L Preferred Stock consists of 100,000
shares with a stated value of $10.00 per share. Series L Preferred Stock is convertible to common stock at a price of $4.00 per
share, and votes together with our common stock on an as-converted basis, subject to conversion limitations. Conversions of our
Series L Preferred Stock are limited such that no conversion may be made to the extent that, following the conversion, the converting
shareholder would own more than 9.99% of our issued and outstanding common stock. On May 14, 2018, we issued
a total of 30,000 Units to three investors at a price of $10.00 per Unit, for total proceeds of $300,000. Each Unit consists of
one (1) share of our newly designated Series L Preferred Stock and warrants to purchase two (2) shares of common stock at a price
of $4.00, exercisable for three years. As of December 31, 2018,
there were 100,000 shares authorized; 30,000 of Series L Preferred Stock issued, outstanding and convertible into 75,000 shares
of common stock, respectively without regard to the beneficial ownership limitation. Common Stock As of December 31, 2018
and 2017, there were 750,000,000 shares of Common Stock authorized; 936,519 and 936,519 shares issued and outstanding, respectively. On January 3, 2017, the
Company issued an aggregate of 5,445 shares of common stock upon the conversion of 35,000 shares of Series D Preferred Stock and
11,681 shares of Series E Preferred Stock. On January 4, 2017, the
Company issued an aggregate of 6,667 shares of common stock upon the conversion of 100,000 shares of Series E Preferred Stock. On January 6, 2017, the
Company issued an aggregate of 41 shares of common stock upon the conversion of 614 shares of Series E Preferred Stock. On January 11, 2017, the
Company issued an aggregate of 8,000 shares of common stock upon the conversion of 60,000 shares of Series D Preferred Stock. On January 31, 2017, the
Company issued an aggregate of 16,667 shares of common stock upon the conversion of 125,000 shares of Series D Preferred Stock On March 2, 2017, the Company
issued an aggregate of 6,667 shares of common stock upon the conversion of 50,000 shares of Series D Preferred Stock. On March 7, 2017, the Company
issued an aggregate of 6,667 shares of common stock upon the conversion of 100,000 shares of Series E Preferred Stock. On April 21, 2017, the
Company issued an aggregate of 6,667 shares of common stock upon the conversion of 100,000 shares of Series E Convertible Preferred
Stock. On May 31, 2017, the Company
entered separate subscription agreements with accredited investors relating to the issuance and sale of 50,000 of shares of Series
J Preferred Stock at a purchase price of $10.00 per share, as well as, the issuance of 4,669 shares of Series J Preferred Stock
for accounts payable of $46,694. The initial conversion ratio is each share of preferred is convertible into 6.6667 shares of common,
subject to adjustment as set forth in the Series J certificate of designation. The Company is prohibited from effecting a conversion
of the Series J Preferred Stock to the extent that, because of such conversion, the investor would beneficially own more than 4.99%
of the number of shares of the Company’s common stock outstanding immediately after giving effect to the issuance of shares
of common stock upon conversion of the Series J Preferred Stock. Each share of Series J Preferred Stock entitles the holder to
cast 6.6667 votes per share of Series J Preferred Stock owned as of the record date for the determination of shareholders entitled
to vote, subject to the 4.99% beneficial ownership limitation. The Company received the necessary consents as required from prior
subscription agreements, Series F Preferred Stock, Series G Preferred Stock and Preferred Series H Preferred Stock, as well as
antidilution rights. The Company was required to issue 1,089,389 shares of Series K Preferred Stock, which is convertible into
726,259 shares of the Company’s common stock, to the certain holders for the consent and anti-dilution rights. In addition,
the Company issued to a vendor as settlement of Preferred Series C Stock issued for services, 76,763 shares of Series K Preferred
Stock, convertible into 51,175 shares of common stock, in lieu of Series C Preferred Stock. The additional issuances for the consent,
anti-dilution rights and settlement, resulted in the recording of other expense and additional paid in capital of $2,308,981. On July 18, 2017, the Company
issued an aggregate of 13,333 shares of common stock upon the conversion of 200,000 shares of Series E Convertible Preferred Stock. On September 27, 2017,
the Company issued an aggregate of 13,333 shares of common stock upon the conversion of 200,000 shares of Series E Convertible
Preferred Stock. On December 6, 2017, the
Company issued an aggregate of 111 shares of common stock upon the conversion of 3,333 shares of Series B Convertible Preferred
Stock. On December 11, 2017, the
Company issued an aggregate of 156,901 shares of common stock upon the conversion of; 812,867 shares of Series C Convertible Preferred
Stock, 61,250 shares of Series D Convertible Preferred Stock, 450,558 shares of Series E Convertible Preferred Stock, 73,759 shares
of Series H Convertible Preferred Stock and 23,000 shares of Series I Convertible Preferred Stock. On December 12, 2017, the
Company issued an aggregate of 104,386 shares of common stock upon the conversion of; 275,029 shares of Series C Convertible Preferred
Stock, 785,500 shares of Series E Convertible Preferred Stock, 4,074 shares of Series J Convertible Preferred Stock and 9,786 shares
of Series K Convertible Preferred Stock. On December 14, 2017, the
Company issued an aggregate of 57,316 shares of common stock upon the conversion of; 549,999 shares of Series F Convertible Preferred
Stock, 3,047,414 shares of Series G Convertible Preferred Stock and 5,000 shares of Series J Convertible Preferred Stock. On December 18, 2017, the
Company issued an aggregate of 40,842 shares of common stock upon the conversion of; 55,625 shares of Series D Convertible Preferred
Stock, 200,000 shares of Series F Convertible Preferred Stock, 1,833,335 shares of Series G Convertible Preferred Stock, 20,834
shares of Series I Convertible Preferred Stock and 897 shares of Series J Convertible Preferred Stock. On December 19, 2017, the
Company issued an aggregate of 35,920 shares of common stock upon the conversion of 538,792 shares of Series C Convertible Preferred
Stock. On December 20, 2017, the
Company issued an aggregate of 39,508 shares of common stock upon the conversion of 592,619 shares of Series E Convertible Preferred
Stock. On May 10, 2018, we issued
20,000 shares of our Series J Preferred Stock at their stated value of $10.00 per share to one investor, for total proceeds of
$200,000. Our Series J Preferred Stock is currently convertible to common stock at a price of $1.50 per share and votes on an as-converted
basis, subject to certain conversion limitations. On May 11, 2018, we designated
a new series of Preferred Stock entitled “Series L Preferred Stock.” Our Series L Preferred Stock consists of 100,000
shares with a stated value of $10.00 per share. Series L Preferred Stock is convertible to common stock at a price of $4.00 per
share and votes together with our common stock on an as-converted basis. In addition, on May 14,
2018, we issued a total of 30,000 Units to 3 investors at a price of $10.00 per Unit, for total proceeds of $300,000. Each Unit
consists of one (1) share of Series L Preferred Stock and warrants to purchase two (2) shares of common stock at a price of $4.00,
exercisable for three years. Stock Options 2018 Incentive Plan On June 14, 2018, our Board
of Directors approved the Orbital Tracking Corp. 2018 Incentive Plan (the “Plan”). The 2014 Equity Incentive Plan was
closed and superseded by the 2018 Incentive Plan. The purpose of the Plan is to provide a means for the Company to continue to
attract, motivate and retain management, key employees, consultants and other independent contractors, and to provide these individuals
with greater incentive for their service to the Company by linking their interests in the Company’s success with those of
the Company and its shareholders. An Award may also be granted to any consultant, agent, advisor or independent contractor for
bona fide services rendered to the Company or any Related Company that; are not in connection with the offer and sale of the Company’s
securities in a capital raising transaction, and do not directly or indirectly promote or maintain a market for the Company’s
securities. The Plan shall be administered by the Board or its Compensation Committee and may grant Options designated as Incentive
Stock Options or Nonqualified Stock Options. The Plan provides that up to a maximum of 1,000,000 shares of the Company’s
common stock (subject to adjustment) are available for issuance under the Plan. Subject to earlier termination in accordance with
the terms of the Plan and the instrument evidencing the Option, the maximum term of an Incentive Stock Option shall not exceed
ten years, and in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, shall not exceed five years. Any
portion of an Option that is not vested and exercisable on the date of a Participant’s Termination of Service shall expire
on such date. In the event of a Change in Control; all outstanding Awards, other than Performance Shares and Performance Units,
shall become fully and immediately exercisable, and all applicable deferral and restriction limitations or forfeiture provisions
shall lapse, immediately prior to the Change in Control and shall terminate at the effective time of the Change in Control; provided,
however, that with respect to a Change in Control that is a Company Transaction, such Awards shall become fully and immediately
exercisable, and all applicable deferral and restriction limitations or forfeiture provisions shall lapse, only if and to the extent
such Awards are not converted, assumed or replaced by the Successor Company. The exercise price of an
Incentive Stock Option shall be at least 100% of the Fair Market Value of the Common Stock on the Grant Date, and in the case of
an Incentive Stock Option granted to a Participant who owns more than 10% of the total combined voting power of all classes of
the stock of the Company or of its parent or subsidiary corporations (a “Ten Percent Stockholder”), shall not be less
than 110% of the Fair Market Value of the Common Stock on the Grant Date. As of December 31, 2018, Mr. David Phipps, is a Ten Percent
Stockholder. The determination of more than 10% ownership shall be made in accordance with Section 422 of the Code. To the extent
the aggregate Fair Market Value (determined as of the Grant Date) of Common Stock with respect to which a Participant’s Incentive
Stock Options become exercisable for the first time during any calendar year (under the Plan and all other stock option plans of
the Company and its parent and subsidiary corporations) exceeds $100,000, such portion in excess of $100,000 shall be treated as
a Nonqualified Stock Option. On June 14, 2018, we issued
275,000 new stock options to our executives and directors under the 2018 Incentive Plan. All options issued have an exercise price
of $1.50 per share, with the exception of David Phipps, a Ten Percent Stockholder, whose exercise price is $1.60, vest in equal
quarterly installments starting July 1, 2018 over the next two years and expire on July 1, 2021. For the year ended December 31,
2018, the amount of vested options were 68,750 . On July 1, 2018, 34,375 options were fully vested and valued on the vesting date
at approximately $1.38 per option or a total of $4 |
