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.

On October 6, 2023, following stockholder approval at the Company’s annual meeting, the Company amended its certificate of incorporation to implement a 1 for 15 reverse split of its common stock. The effect of the reverse stock split was to combine every 15 shares of outstanding common stock into one share of common stock. The reverse stock split was effective at the opening of the trading day on October 11, 2023. The effects of the reverse stock split have been reflected in this quarterly report on form 10/Q for all periods presented.

Common Stock

Issuance of Shares for Vested Restricted Stock Units

March 27, 2024, the Company issued 1,667 shares of common stock to a holder of fully vested restricted stock units.

Issuance of Shares as Settlement of Accounts Payable

Between February 6, 2024 and July 11, 2024, the Company issued an aggregate 130,039 shares of common stock in full settlement of $239,815 of accounts payable. The shares had fair values ranging from $1.20 to $2.65 per share.

Issuance of Shares for Legal Settlements

On May 30, 2024, the Company issued 37,500 shares of common stock valued at $67,200 or $1.79 per share to fulfill its obligation under a previous legal settlement. See Note 6. Commitments and Contingencies for further information.

On July 15, 2024, the Company issued 38,052 shares of common stock valued at $53,653 or $1.41 per share to settle a potential legal claim.

On July 18, 2024, the Company issued 159,776 shares of common stock valued at $218,094 or $1.36 per share as partial fulfillment its obligation under a previous legal settlement. See Note 6. Commitments and Contingencies for further information.

Warrants issued in conjunction with loans payable

On July 15, 2024, the Company issued warrants to purchase an aggregate 4,887,118 shares of the Company’s common stock at exercise prices ranging from $1.43 to $1.692 per share in conjunction with a convertible note issuance, see Note 4. Loans Payable. The warrants were valued at $6,163,572  using the Black-Scholes pricing model.  The Company has recognized $973,200 of this value as a discount to the associated notes.

The Company has classified the warrants as having Level 2 inputs, and has used the Black-Scholes option-pricing model to value the warrants.

The fair values at the commitment date for the warrants were based upon the following management assumptions as of the date of issuance:

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, 2024 were:

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, 2023 were:

The Company’s outstanding warrants and options at September 30, 2024 are as follows:

As of September 30, 2024 and December 31, 2023, there was no unrecognized expense for unvested stock options and restricted stock awards.

Stock-based compensation expense for three and nine months ended September 30, 2024 and 2023 is as follows: