Note 9. Stockholders’ Equity

Common Stock

Authorized Shares

The Company has 45,000,000 common 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.

Between October 4, 2021 and October 14, 2021, the company issued a total of 157,582 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.

On November 1, 2021, the Company issued 15,988 shares of common stock in full settlement of $27,178 of accounts payable. The shares had a fair value of $1.70 per share.

On November 29, 2021, the Company issued 12,522 shares of common stock in full settlement of $17,781 of accounts payable. The shares had a fair value of $1.42 per share.

On December 28, 2021, the Company issued 23,037 shares of common stock in full settlement of $29,027 of accounts payable. The shares had a fair value of $1.26

Issuance of Shares Pursuant to Legal Settlement

On December 12, 2021, the Company issued 16,666 shares of common stock in settlement of $25,000 pursuant to a legal settlement.

Issuance of Shares for the Exercise of Options

On October 4, 2021, the Company issued 6,579 shares of common stock in a cashless exercise of outstanding options.

Equity Financing

During May 2020, the Company received $515,000 of a committed $565,000 from the sale of units (at a price of $3.80 per unit) comprised in the aggregate of 135,527 shares of common stock and warrants to purchase 169,409 shares of common stock, at an exercise price of $4.00 per share. As of December 310, 2021, the full amount had 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 year ended December 31, 2021 are:

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 year ended December 31, 2020 are:

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 warrants issued during the years ended December 31, 2021 and 2020 were based upon the following management assumptions:

The Company’s outstanding warrants and options at December 31, 2021 are as follows:

As of December 31, 2021 and 2020, the total unrecognized expense for unvested stock options and restricted stock awards was approximately $1.0 million and $2.5 million, respectively, to be recognized over a one to three-year period for restricted stock awards and one year for option grants from the date of grant.

Stock-based compensation expense for the years ended December 31, 2021 and 2020 was as follows:

Stock-based compensation expense categorized by the equity components for the years ended December 31, 2021 and 2020 is as follows:

Stock compensation is included in general and administrative expenses on the consolidated statements of operations