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.

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 Vested Restricted Stock Units

Between January 25, 2021 and February 8, 2021, the company issued a total of 8,832 shares of common stock to holders of fully vested restricted stock units.

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 March 31, 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 three months ended March 31, 2020 were:

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:

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

As of March 31, 2021 and December 31, 2020, the total unrecognized expense for unvested stock options and restricted stock awards was approximately $2 million and $2.5 million, respectively, to be recognized over a one to three year period from the date of grant.

Stock-based compensation expense for the three months ended March 31, 2021 and 2020 was as follows:

Stock-based compensation expense categorized by the equity components for the three months ended March 31, 2021 and 2020 was as follows: