Quarterly report pursuant to Section 13 or 15(d)

Stockholders??? Deficit

v3.23.1
Stockholders’ Deficit
 3 Months Ended
Mar. 31, 2023
Equity [Abstract]  
Stockholders’ Deficit

6) Stockholders’ Deficit

 

Preferred Stock

 

We are authorized to issue 1,000,000 shares of preferred stock with a par value of $0.01. Of the 1,000,000 shares of preferred stock, the following is outstanding:

 

    March 31, 2023     December 31, 2022  
Series D Convertible Preferred Stock, $.01 par value; 850 shares authorized; 75 shares issued and outstanding on March 31, 2023, and 300 shares issued and outstanding on December 31, 2022 (Liquidation value of $300,000)   $ -     $ 3  
Series G Convertible Preferred Stock, $.01 par value; 240,000 shares authorized; no shares issued and outstanding on March 31, 2023 and 80,570 shares issued and outstanding on December 31, 2022     -       806  
Series H Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; no shares issued and outstanding on March 31, 2023 and 10,000 shares issued and outstanding on December 31, 2022     -       100  
Series J Convertible Preferred Stock, $.01 par value; 6,250 shares authorized; no shares issued and outstanding on March 31, 2023 and 3,458 shares issued and outstanding on December 31, 2022     -       35  
Series K Convertible Preferred Stock, $.01 par value; 15,000 shares authorized; no shares issued and outstanding on March 31, 2023 and 6,880 shares issued and outstanding on December 31, 2022     -       68  
Series AA Convertible Preferred Stock, $.01 par value; 10,000 shares authorized; 8,645 shares issued and outstanding on March 31, 2023 and December 31, 2022, respectively     86       86  
Series H2 Convertible Preferred Stock, $.01 par value; 21 shares authorized; no shares issued and outstanding on March 31, 2023 and 21 shares issued and outstanding on December 31, 2022     -       -  
Series A Junior Participating Preferred Stock, $.01 par value, 20,000 shares authorized, no shares outstanding     -       -  
Series A Convertible Preferred Stock, $.01 par value, 313,960 shares authorized, no shares outstanding     -       -  
Series B Convertible Preferred Stock, $.01 par value, 279,256 shares authorized, no shares outstanding     -       -  
Series C Convertible Preferred Stock, $.01 par value, 88,098 shares authorized, no shares outstanding     -       -  
Series E Convertible Preferred Stock, $.01 par value, 500 shares authorized, no shares outstanding     -       -  
Total Convertible Preferred Shares   $ 86     $ 1,098  

 

Stock Options and Warrants

 

At the Company’s December 30, 2021 Special Meeting, the shareholder’s approved the 2021 Equity Incentive Plan (the “2021 Plan”) pursuant to which 3,000,000 shares of our common stock were reserved for issuance upon exercise of stock options or other equity awards. Consistent with the Company’s existing 2013 Equity Incentive plan (the “2013 plan”), under the 2021 plan, we may award stock options, shares of common stock, and other equity interests in the Company to employees, officers, directors, consultants, and advisors, and to any other persons the Board of Directors deems appropriate. As of March 31, 2023, options to acquire 3,420,754 shares were outstanding under these Plans.

 

As of March 31, 2023, total unrecognized compensation cost related to the unvested stock-based awards was $1,243,037, which is expected to be recognized over weighted average period of 2.61 years. The aggregate intrinsic value associated with the options outstanding and exercisable as of March 31, 2023, based on the March 31, 2023 closing stock price of $1.25, was $863,040.

 

The following table summarizes information concerning options and warrants outstanding and exercisable:

 

    Stock Options     Warrants              
    Weighted Average     Weighted Average     Total  
    Shares     price per share     Shares     price per share     Shares     Exercisable  
Balance outstanding, December 31, 2022     1,307,822     $ 0.72         16,278,769     $ 3.50         17,586,591       17,570,591  
Granted       2,230,484       1.50       100,000       3.50       2,330,484          
Exercised     (117,552 )     0.69       -       -       (117,552 )        
Expired     -       -       (161,668 )     3.50       (161,668 )        
Forfeited     -       -       -       -       -          
Balance outstanding, March 31, 2023     3,420,754     $ 1.23       16,217,101     $ 3.50       19,637,855       18,538,573  

 

 

As of March 31, 2023, the 3,420,754 options outstanding have a $1.23 weighted average exercise price and 8.64 years of weighted average remaining life for outstanding options and 8.1 years of weighted average remaining life for exercisable options. Of these options, 2,321,472 are currently exercisable.

 

As of March 31, 2023, the warrants outstanding have a $3.50 weighted average exercise price.

 

Common Stock and Warrant Issuances

 

During the three months ended March 31, 2023, the Company accrued approximately $1,705,234 in interest expense for these obligations to issue common stock. During the three months ended March 31, 2022, the Company accrued $1,173,458 million in interest expense for these obligations to issue common stock.

 

During the three months ended March 31, 2023 the Company issued a total of 4,381,330 shares of restricted common stock to accredited investors and consultants, with the following detail:

 

  ● 1,111,081 shares of common stock with a fair value of $1,705,234 to lenders for interest paid-in-kind;
  ● 990,500 shares with a fair value of $1,419,335 for services rendered;
  ● 203,613 shares with a fair value of $509,033 for conversions of debt principal and interest;
  ● 117,552 shares for stock option exercises (at an exercise price of $0.69 per share);
  ● 73,694 shares with a fair value of $102,435 for dividends paid-in-kind;
  ● 783,150 shares with a fair value of $1,087,751 for new convertible debt issuances;
  ● 568,200 shares with a fair value of $1,029,939 for convertible debt extensions;
  ● 40,000 shares with a fair value of $100,000 for sale of common, and
  ● 493,540 shares for the conversion of preferred stock to common stock.

 

During the three months ended March 31, 2023, the Company issued 100,000 warrants (five-year term at a $3.50 exercise price) to acquire common stock at a fair value of $61,609 to a consultant for professional services.

 

On various dates in the three months ended March 31, 2022 the Company issued a total of 1,073,610 shares of restricted common stock to accredited investors and consultants. 140,200 of the shares with a fair value of $350,500 were issued for the conversion of debt and interest for common stock, 558,100 of the shares with a fair value of $1,173,458 were issued for interest paid-in-kind, 37,000 of the shares with a fair value of $77,700 were issued for services rendered, 31,810 shares with a fair value of $64,256 for dividends paid-in-kind, 92,000 shares with a fair value of $142,480 for new convertible debt issuances and 214,500 shares with a fair value of $472,900 for debt extension.

 

During the three months ended March 31, 2022, we issued 100,000 warrants (three-year term at a $3.50 exercise price) to acquire common stock at a fair value of $87,436 to a lender in conjunction with signing of new convertible loans. We also issued 30,000 warrants (three-year term at a $3.50 exercise price) with a fair value of $39,761 for services rendered and 100,000 warrants (three-year term at a $3.50 exercise price) with a fair value of $132,537 for debt extension.