Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.23.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2022
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 14 – STOCKHOLDERS’ EQUITY

 

Preferred Stock

 

The Company has authorized 10,000,000 shares of undesignated preferred stock with a $0.001 par value. As of December 31, 2022, no preferred shares have been issued and these shares are considered blank check preferred shares with no terms, limitations, or rights associated with them.

 

Common Stock

 

The Company has authorized 750,000,000 shares of common stock with a $0.001 par value per share. The holders of common stock are entitled to one vote for each share of common stock held at the time of vote. As of December 31, 2022, the Company has 1,242,647 shares outstanding.

 

Shares Issued for Services

  

On October 15, 2020, the Company granted to a non-executive officer of the Company 3,437 restricted shares under the Company’s 2018 Equity Incentive Plan. The shares were valued as of the date of the grant at a fair value of $141.95 per share or $487,931, which will be amortized over the vesting period. As a result of the merger and contractual terms of the restricted share agreement, all the remaining unvested shares vested and the Company recorded $280,369 in stock-based compensation. The Company issued 128 shares of common stock and withheld 2,168 shares in respect of tax withholdings.

 

The following table summarized the warrant activity for the years ended December 31, 2022 and 2021:

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
Warrants   Shares     Price     Term     Value  
Balance Outstanding, December 31, 2020     47,448     $ 82.45       3.39     $ 351,125  
Granted     70,332       16.15       9.52       304,799  
Forfeited    
-
      
-
      
-
      
-
  
Exercised    
-
      
-
      
-
      
-
  
Expired     (8,858 )     102.00       1.73      
-
  
Balance Outstanding, December 31, 2021     108,922     $ 38.25       6.85     $ 304,799  
Granted     246,024       7.00       4.95       -  
Forfeited    
-
      
-
      
-
      
-
  
Exercised    
-
      
-
      
-
      
-
  
Expired     (554 )     108.80       0.73       -  
Balance Outstanding, December 31, 2022     354,392     $ 16.58       5.20     $ -  
                                 
Exercisable, December 31, 2022     108,368     $ 27.25       5.88     $ -  

 

Equity Incentive Plan

 

As of September 21, 2018, the Company’s board of directors adopted, and stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan has a 10-year term, which terminates on the day prior to the 10th anniversary of its adoption by the Board. Under the 2018 Plan, the Company may grant equity-based incentive awards, including options, restricted stock, and other stock-based awards, to any directors, employees, advisers, and consultants that provide services to the Company. The vesting period, term and exercise price will be determined at the time of the grant. An aggregate of up to 41,176 of the Company’s common stock are reserved for issuance under the 2018 Plan. As of December 31, 2021, the Company has granted and has 21,176 options outstanding, as well as 3,929 shares of restricted common stock issued under the 2018 Plan. On July 15, 2021 the Company’s board of directors increased the number of shares of common stock authorized for grant from 41,176 to 94,118.

 

On May 19, 2022, the Board of Directors approved the issuance of options to purchase an aggregate of 12,778 shares of common stock to certain employees of the Company. The options have an exercise price of $26.35 per share with vesting terms of one quarter/half vesting on November 19, 2022 and the remainder monthly ratably through May 19, 2023. The options will expire on May 19, 2032. The aggregate fair value of $271,324 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 115.0%, (iii) risk free rate of 2.80% (iv) dividend rate of zero, (v) stock price of $26.35, and (vi) exercise price of $26.35. The expense will be amortized over the vesting period and a total of $167,799 was recorded since issuance and through December 31, 2022.

  

On August 19, 2022, the Board of Directors approved the issuance of options to purchase an aggregate of 303,390 shares of common stock to certain employees of the Company. The options have an exercise price of $10.20 per share with varying vesting terms through August 10, 2023. The options will expire on August 19, 2027. The aggregate fair value of $2,346,000 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 100.0%, (iii) risk free rate of 3.10% (iv) dividend rate of zero, (v) stock price of $10.20, and (vi) exercise price of $10.20. The expense will be amortized over the vesting period and a total of $2,318,890 was recorded since issuance and through December 31, 2022.

 

The following table summarized the option activity for the years ended December 31, 2022 and 2021:

 

                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
Options   Shares     Price     Term     Value  
Balance Outstanding, December 31, 2020     21,177     $ 63.75       8.51     $ 270,000  
Granted     118,007     $ 25.50       9.82       196,825  
Forfeited     (909)       127.50       9.12       -  
Exercised     -       -       -       -  
Expired     -       -       -       -  
Balance Outstanding, December 31, 2021     138,275     $ 30.60       9.47     $ 196,825  
Granted     316,168       10.85       4.83       -  
Forfeited     (7,003 )     17.85       8.95       -  
Exercised     -        -        -        -  
Expired     -        -        -        -  
Balance Outstanding, December 31, 2022     447,440     $ 16.93       5.89     $ -  
                                 
Exercisable, December 31, 2022     439,167     $ 16.93       5.89     $ -  

 

For future periods, the remaining value of the stock options totaling approximately $132,543 will be amortized into the statement of operations consistent with the period for which the services will be rendered.