BioSolar Inc

On February 18, 2021, the Company granted 425,000,000 stock options to its employees for services at an exercise price of $0.091. The options expire, and all rights to purchase the shares shall terminate seven (7) years from the date of grant or termination of employment. Half of the 400,000,000 options vest immediately, and the remaining half o the option to purchase 200,000,000 shares of the Company’s common stock shall become exercisable in equal amounts over a twenty-four (24) month period during the term of the optionee’s employment, with the first installment of 8,333,333 shares vesting on March 18, 2021. The 50,000,000 options shall become exercisable in equal amounts over a thirty-six (36) month period during the term of the optionees employment, with the first installment of 1,388,889 shares vesting on March 18, 2021.

In May 2021, the FASB issued an amendment to accounting standards ASU 2021-04, (Subtopic 470-50) – Debt Modifications and Extinguishments”, which requires that an entity apply the new guidance to a modification or an exchange of a freestanding equity-classified written call option that is a part of or directly related to a modification or an exchange of an existing debt. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted for all entities. The Company has evaluated the impact of the adoption of ASU 2021-04, which has no effect on the Company’s financial statements.

On January 14, 2021, the Board of Directors adopted a certificate of designation establishing the rights, preferences, privileges and other terms of 1,000 Series B Preferred Stock, par value $0.0001 per share, providing for supermajority voting rights to holders of Series B Preferred Stock. The intent of the Board is that all shares of the Series B Preferred Stock be issued to David Lee, Chief Executive Officer, Chairman of the Board, President and acting Chief Financial Officer in exchange for his continued employment with the Company.

On March 26, 2021, the Company entered into a purchase agreement with an investor for an exchange of convertible debt to equity. The investor exchanged convertible notes in the amount of $2,462,060, plus interest in the amount of $1,023,253 for an aggregate total of $3,485,313 in exchange for 34,853 shares of the Company’s Series C Preferred Stock. The extinguishment of the convertible debt and derivative was recognized in the financials as a gain on settlement of convertible notes and derivative liability. A valuation was prepared based on a stock price of $0.075, with a volatility of 206.03%, based on an estimated term of 5 years.

On January 27, 2021, the Company entered into a securities purchase agreement with an investor to sell through a private placement an aggregate of 52,000,000 shares of common stock and separate pre-funded warrants to purchase up to 31,333,334 shares of common stock, plus warrants to purchase up to 83,333,334 at an exercise price of $0.06 per share. In addition, the combined purchase price of $0.06 per one (1) share of common stock and associated warrant had a purchase price of $0.0599 per one (1) pre-funded and associated warrant for aggregate gross proceeds of $4,996,866 (5,000,0000 assuming full exercise of the pre-funded warrants). for gross proceeds to the Company of approximately $5,000,000. After closing cost the Company received net funds of $4,406,217, which does include the prefunded amount of $3,133.