Quarterly report pursuant to Section 13 or 15(d)

Stockholders??? Equity

v3.21.2
Stockholders’ Equity
 9 Months Ended
Sep. 30, 2021
Stockholders' Equity Note [Abstract]  
Stockholders’ Equity

Note 7. Stockholders’ Equity

 

Authorized Shares

 

The Company has 45,000,000 Common shares and 900,000 Series A convertible preferred shares authorized with a par value of $0.001 per share.

 

Common Stock

 

Issuance of Shares Pursuant to Conversion of Series A Preferred Stock

 

During February 2021, the Company issued 52,632 shares of common stock to a holder of its Series A Convertible Preferred Stock upon the conversion of 20,000 of such shares of Series A Convertible Preferred Stock.

 

During July 2021, the Company issued 65,953 shares of common stock to a holder of its Series A Convertible Preferred Stock upon the conversion of 25,062 of such shares of Series A Convertible Preferred Stock.

 

Issuance of Shares for Equity Financing

 

On January 6, 2021, The Company issued 72,369 shares of common stock and 90,461 5 year warrants to purchase shares of common stock at $4.00 per share pursuant to the prior receipt of $275,000 in equity financing.

 

Issuance of Shares for Common Stock Placement

 

On September 17, 2021, The Company issued 298,883 shares of common stock and 298,883 5 year warrants to purchase shares of common stock at $1.79 for aggregate gross proceeds of $525,000.

 

Issuance of Shares for Vested Restricted Stock Units

 

Between January 25, 2021 and August 13, 2021, the company issued a total of 504,965 shares of common stock to holders of fully vested restricted stock units.

 

Issuance of Shares Pursuant to Settlement of Accounts Payable

 

On June 1, 2021, the Company issued 96,757 shares of common stock in full settlement of $132,557 of accounts payable. The shares had a fair value of $1.37 per share.

 

On July 14, 2021, the Company issued 29,025 shares of common stock in full settlement of $85,622 of accounts payable. The shares had a fair value of $2.95 per share.

 

On August 10, 2021, the Company issued 11,611 shares of common stock in full settlement of $29,607 of accounts payable. The shares had a fair value of $2.55 per share.

 

On August 10, 2021, the Company issued 5,458 shares of common stock in full settlement of $13,919 of accounts payable. The shares had a fair value of $2.55 per share.

 

On September 14, 2021, the Company issued 27,403 shares of common stock in full settlement of $61,930 of accounts payable. The shares had a fair value of $2.26 per share.

 

Equity Financing

 

During May 2020, the Company received $515,000 of a committed $565,000 from the sale of 135,527 shares of common stock (at a price of $3.80 per share) and warrants to purchase 169,409 shares of common stock, at an exercise price of $4.00 per share. As of September 30, 2021, the full amount has not been received and only $415,000 worth of the shares and warrants have been issued. The remaining $125,000 is included in equity financing within current liabilities on the consolidated balance sheet.

 

Stock Incentive Plan

 

The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of and for the nine months ended September 30, 2021 were:

 

    Warrant Grants     Stock Option Grants     Restricted
Stock Units		  
    Number of
shares
subject to
warrants		     Weighted-
average
exercise
price per
share		     Number of
shares
subject to
options		     Weighted-
average
exercise
price per
share		     Number of
shares
subject to
restricted
stock units		  
Balance at December 31, 2020     672,459     $ 8.09       118,388     $ 3.25       2,301,053  
Granted     389,344       2.30      
-
      
-
       843,338  
Exercised    
-
      
-
      
-
      
-
       (675,219 )
Expired     (11,699 )    
-
      
-
      
-
       (150,833 )
Balance at September 30, 2021     1,050,104     $ 2.57       118,388     $ 3.25       2,318,339  
Exercisable at September 30, 2021     1,050,104     $ 2.57       118,388     $ 3.25       1,464,631  

 

The Company has classified the warrant as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrant. The fair value at the issuance dates for the above warrant was based upon the following management assumptions:

 

    Issuance date  
Risk-free interest rate     0.49 - 0.88 %
Expected dividend yield     - %
Expected volatility     100 %
Term     5 years  
Fair value of common stock     1.95 - 2.24  

 

The Company’s outstanding warrants and options at September 30, 2021 are as follows:

 

Warrants Outstanding     Warrants Exercisable  
Exercise Price
Range		     Number Outstanding     Weighted Average
Remaining
Contractual Life
(in years)		     Weighted Average
Exercise Price		     Number Exercisable     Weighted Average
Exercise Price		     Intrinsic Value  
$ 1.79 - $20.90       1,050,104       3.23     $ 2.57     1,050,104     $ 2.57       290,525  
                                                   

 

Options Outstanding     Options Exercisable  
Exercise Price
Range		     Number Outstanding     Weighted Average
Remaining
Contractual Life
(in years)		     Weighted Average
Exercise Price		     Number Exercisable     Weighted Average
Exercise Price		     Intrinsic Value  
$ 2.64 - $28.50       118,388       2.94     $ 3.25     118,388     $ 3.25      
-
  
                                                   

 

As of September 30, 2021 and December 31, 2020, the total unrecognized expense for unvested stock options and restricted stock awards was approximately $1.7 million and $2.5 million, respectively, to be recognized over a four month to three year period from the grant dates.

 

Stock-based compensation expense for three and nine months ended September 30, 2021 and 2020 was as follows:

 

    For the
three months ended		     For the
nine months ended		  
    September 30,     September 30,  
    2021     2020     2021     2020  
Stock-based compensation expense   $ 699,084     $ 488,304     $ 1,929,446     $ 2,844,851  
                                 

 

Stock-based compensation expense categorized by the equity components for three and nine months ended September 30, 2021 and 2020 was as follows:

 

    For the
three months ended		     For the
nine months ended		  
    September 30,     September 30,  
    2021     2020     2021     2020  
Common stock   $ 699,084     $ 488,304     $ 1,929,446     $ 2,844,851  
Total   $ 699,084     $ 488,304     $ 1,929,446     $ 2,844,851