Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Deficit

v3.21.1
Stockholders' Deficit
3 Months Ended
Mar. 31, 2021
Stockholders' Equity Note [Abstract]  
STOCKHOLDERS’ DEFICIT

NOTE 10 – STOCKHOLDERS’ DEFICIT


Preferred Stock


The Company has authorized 10,000,000 shares of undesignated preferred stock with a $0.001 par value. As of March 31, 2021, 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 200,000,000 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 March 31, 2021, the Company had 19,706,086 shares outstanding or deemed outstanding.


Shares Issued for Services


On October 15, 2020, the Company granted to a newly-hired non-executive officer of the Company 292,174 restricted shares under the Company’s 2018 Equity Incentive Plan, which vest quarterly in equal amounts commencing January 15, 2021 and ending January 15, 2022. The shares were valued as of the date of the grant at a fair value of $1.67 per share or $487,931, which will be amortized over the vesting period. During the three months ended Mach 31, 2021, the Company recognized $53,423 of stock-based compensation.


Warrants


The following table summarized the warrant activity for the three months ended March 31, 2021:


                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
Warrants   Shares     Price     Term     Value  
Balance Outstanding, December 31, 2020     4,033,132     $ 0.97       3.14     $ 1,350,113  
Granted     41,667       0.75       3.90       -  
Forfeited     -       -       -       -  
Exercised     -       -       -       -  
Expired     -       -       -       -  
Balance Outstanding, March 31, 2021     4,074,799     $ 0.96       3.15     $ 2,015,000  
                                 
Exercisable, March 31, 2021     2,574,799     $ 1.05       2.61     $ 1,040,500  

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 3,500,000 of the Company’s common stock are reserved for issuance under the 2018 Plan. As of March 31, 2021, the Company has granted and has 1,941,779 options outstanding, as well as 333,972 shares of restricted common stock issued under the 2018 Plan.


On January 14, 2019, the Board of Directors approved the issuance of options to purchase an aggregate of 800,000 and 200,000 shares of common stock to Boris Goldstein and Vadim Sakharov (a former director and executive officer of the Company), respectively. The options have an exercise price of $0.75 per share which will vest over a 24-month period as follows: 25% (or 200,000 and 50,000, respectively) shall vest six months after the grant date with the remaining options will vest on a monthly basis at a rate of 1/24th per month. The options will expire on January 14, 2029. The aggregate fair value of $17,111 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 10 years, (ii) volatility of 77%, (iii) risk free rate of 2.71% (iv) dividend rate of zero, (v) stock price of $0.042, and (vi) exercise price of $0.75. The full amount was expensed as of December 31, 2020.


On January 30, 2020, the Board of Directors approved the issuance of options to purchase an aggregate of 800,000 shares of common stock to Boris Goldstein. The options have an exercise price of $0.75 per share which will vest ratably on a quarterly basis over a two year period. The options will expire on January 30, 2029. The aggregate fair value of $51,757 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 10 years, (ii) volatility of 76%, (iii) risk free rate of 1.57% (iv) dividend rate of zero, (v) stock price of $0.12, and (vi) exercise price of $0.75. The expense will be amortized over the vesting period and a total of $6,372 was recorded during the three months ended March 31, 2021.


On January 26, 2021, the Board of Directors approved the issuance of options to purchase an aggregate of 16,779 shares of common stock to Nickolay Kukekov. The options have an exercise price of $1.49 per share and fully vested on the initial grant date. The options will expire on January 26, 2031. The aggregate fair value of $20,817 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 10 years, (ii) volatility of 85.5%, (iii) risk free rate of 1.05% (iv) dividend rate of zero, (v) stock price of $1.49, and (vi) exercise price of $1.49. The expense was recognized in full on the initial grant date.


On February 11, 2021, the Board of Directors approved the issuance of options to purchase an aggregate of 125,000 shares of common stock, 50,000 to Irina Nazarova, and 25,000 each to Denis Serikov, Olesia Sukhaporova and Roman Bondarenko. The options have an exercise price of $1.50 per share which will vest over a 30-month period as follows: 25% (or 12,500 and 6,250, respectively) shall vest six months after the grant date with the remaining options will vest on a monthly basis at a rate of 1/24th per month. The options will expire on February 11, 2031. The aggregate fair value of $156,655 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 10 years, (ii) volatility of 85.9%, (iii) risk free rate of 1.16% (iv) dividend rate of zero, (v) stock price of $1.50, and (vi) exercise price of $1.50. The expense will be amortized over the vesting period and a total of $8,254 was recorded during the three months ended March 31, 2021.


The following table summarized the option activity for the three months ended March 31, 2021:


                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
    Number of     Exercise     Contractual     Intrinsic  
Options   Shares     Price     Term     Value  
Balance Outstanding, December 31, 2020     1,800,000     $ 0.75       9.05     $ 513,000  
Granted     141,779       1.50       9.85       -  
Forfeited     -       -       -       -  
Exercised     -       -       -       -  
Expired     -       -       -       -  
Balance Outstanding, March 31, 2021     1,941,779     $ 0.80       8.38     $ 1,260,000  
                                 
Exercisable, March 31, 2021     1,516,779     $ 0.76       8.16     $ 1,050,000  

For future periods, the remaining value of the stock options totaling approximately $169,996 will be amortized into the statement of operations consistent with the period for which the services will be rendered.