Quarterly report pursuant to Section 13 or 15(d)

Stockholders' (Deficit)

v3.21.1
Stockholders' (Deficit)
 3 Months Ended
Mar. 31, 2021
Equity [Abstract]  
Stockholders' (Deficit)

Note 8 - Stockholders’ (Deficit)

 

Capital Stock

 

The Company has 260,000,000 authorized shares of capital stock, consisting of 250,000,000 shares of common stock, par value $0.001, and 10,000,000 shares of Preferred Stock, par value $0.001 per share.

 

On March 8, 2021 the Company’s shareholders approved an amendment to the Company’s articles of incorporation, as amended, to effect a reverse stock split of the Company’s issued and outstanding shares of common stock, at a ratio to be determined at the discretion of the Board of Directors within a range of one (1) share of common stock for every two (2) to sixty (60) shares of common stock, such amendment to be effected only in the event the Board of Directors still deems it advisable. See Note 12 – Subsequent Events.

 

On May 6, 2021 the Company filed with the Securities and Exchange Commission Amendment No. 4 to Form S-1 - Registration Statement Under the Securities Act of 1993 to offer 1,162,790 Units (Each Unit Consisting of One Share of Common Stock and One Warrant to Purchase One Share of Common Stock).

 

During the three months ended March 31, 2021, the Company received cash of $5,400 from the exercise of 2,500 options.

 

Common Stock Options

 

A summary of the Company’s option activity and related information follows:

 

    Number of
Shares
Under Options		   Range of
Option Price
Per Share		   Weighted
Average
Exercise Price		   Weighted
Average
Contractual
Life
Options Outstanding at December 31, 2020     207,650     $ 2.0-15.6     $ 5.2       6.6  
Options Granted     —       —       —          
Exercised     —       —       —          
Expired/Cancelled     —       —       —          
Options Outstanding at March 31, 2021     207,650     $ 2.0-15.6     $ 5.2       6.38  
                                 
Options Exercisable at March 31, 2021     139,541     $ 2.0-15.6     $ 6.4       5.50  

  

Share-based compensation expense for options totaling $42,171 and $33,048 was recognized in our results for the three months ended March 31, 2021 and 2020, respectively.

 

The valuation methodology used to determine the fair value of the options issued during the year was the Black-Scholes option-pricing model. The Black-Scholes model requires the use of a number of assumptions including volatility of the stock price, the average risk-free interest rate, and the weighted average expected life of the options.

 

The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the options.

 

Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the expected life of the award. The Company’s calculation of estimated volatility is based on historical stock prices of these peer entities over a period equal to the expected life of the awards. The Company uses the historical volatility of peer entities due to the lack of sufficient historical data of its stock price.

 

As of March 31, 2021, there was $221,939 of total unrecognized compensation expense related to unvested employee options granted under the Company’s share-based compensation plans that is expected to be recognized over a weighted average period of approximately 1.5 years.

 

Preferred Stock

 

Dividends

 

Each share of Series A Preferred Stock, in preference to the holders of all common stock, shall entitle its holder to receive, but only out of funds that are legally available therefore, cash dividends at the rate of ten percent (10%) per annum from the Original Issue Date on the Original Issue Price for such share of Series A Preferred Stock, compounding annually unless paid by the Company. Accrued dividends at March 31, 2021 were $1,154,556.