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Equity
 12 Months Ended
Dec. 31, 2022
Equity  
Equity

11. Equity

The Company has authorized 200,000,000 shares of no-par common stock at December 31, 2022 and 2021. In addition, the Company has authorized 1,000,000 shares of no-par preferred stock, none of which had been issued at December 31, 2022 or 2021.

 

Stock Purchase Warrants Outstanding

Transactions in common stock purchase warrants for the years ended December 31, 2022 and 2021 are as follows:

 

 

 

Number of Warrants

 

 

Exercise Prices

 

Balance December 31, 2020

 

 

426,788

 

 

$2.52-5.60

 

Issued

 

 

289,294

 

 

$5.60-7.00

 

Exercised

 

 

(46,615)

 

$2.52

 

Balance December 31, 2021

 

 

669,467

 

 

$2.52-7.00

 

Expired

 

 

(185,304)

 

$2.52-5.60

 

Exercised

 

 

(194,869)

 

$2.52-5.60

 

Balance December 31, 2022

 

 

289,294

 

 

$5.60-7.00

 

 

These warrants expire as follows:

 

Shares

 

 

Exercise Price

 

 

Expiration Date

 

 

235,722

 

 

$5.60

 

 

October 14, 2023

 

 

53,572

 

 

$7.00

 

 

November 12, 2023

 

 

289,294

 

 

 

 

 

 

 

 

 

Stock Options

In April 2014, the Board of Directors of the Company established a stock option plan to authorize the granting of stock options to officers and employees. Upon exercise of the options, shares are issued from the available authorized shares of the Company. Options reserved to any one related person on an annual basis may not, upon exercise, exceed 5% and the aggregate number of all options outstanding will not exceed 10% of the issued outstanding common shares in total as calculated at that time.

 

In September 2022, the board granted 165,000 stock options to officers, board members and employees. These options vested immediately and are exercisable at $5.25 for 3 years. Total stock-based compensation recognized on these options was $505,476 and was recognized in management ($64,333), professional services ($27,571), and general and administrative ($413,572) expenses in the consolidated statement of operations. In September 2022, the board granted an additional 15,000 stock options, 7,500 each to our independent board members. These options vested immediately and are exercisable at $4.75 for 3 years. Total stock-based compensation recognized on these options was $41,799 and was recognized in management expenses in the consolidated statement of operations.

 

In February 2021, the board granted 283,936 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $5.60 for 3 years. Total stock-based compensation recognized on these options was $604,572 and was recognized in management ($147,457), professional services ($44,237), and general and administrative ($412,878) expenses in the consolidated statement of operations. In March 2021, the Company granted 3,572 stock options to an individual for services rendered to the Company. These options vested immediately and are exercisable at $5.60 for 3 years. Total stock-based compensation recognized on these options was $9,860. In October 2021 the Company granted 182,166 stock options to officers, board members, and employees. These options vested immediately and are exercisable at $5.60 for 3 years. Total stock-based compensation recognized on these options was $473,143 and was recognized in management ($92,772), professional services ($27,832), and general and administrative ($352,539) expenses in the consolidated statement of operations. An additional 32 options were recorded in 2021 representing fractional share issuances related to the 1-14 reverse stock split.

 

The fair value of stock option awards granted, and the key assumptions used in the Black-Scholes valuation model to calculate the fair value of the options are as follows:

 

 

 

February 11, 2021

 

March 15, 2021

 

October 20, 2021

 

September 6, 2022

 

September 28, 2022

 

Fair value

 

$604,572

 

$9,860

 

$473,143

 

$505,476

 

$41,799

 

Options issued

 

283,936

 

3,572

 

182,166

 

165,000

 

15,000

 

Exercise price

 

$5.60

 

$5.60

 

$5.60

 

$5.25

 

$4.75

 

Expected term (in years)

 

3.0

 

3.0

 

3.0

 

3.0

 

3.0

 

Risk-free rate

 

0.19%

 

0.33%

 

0.70%

 

3.55%

 

4.12%

 

Volatility

 

97.9%

 

99.3%

 

96.6%

 

89.3%

 

89.2%

 

Transactions in stock options for the years ended December 31, 2022, and 2021 are as follows:

 

 

 

Number of Options

 

 

Weighted Average Exercise Prices

 

Balance December 31, 2020

 

 

150,000

 

 

$1.83

 

Granted

 

 

469,674

 

 

$5.53

 

Exercised

 

 

(101,786)

 

$1.87

 

Forfeited

 

 

(10,713)

 

$5.60

 

Balance December 31, 2021

 

 

507,175

 

 

$5.25

 

Granted

 

 

180,000

 

 

$5.21

 

Exercised

 

 

(116,078)

 

$4.31

 

Expired

 

 

(7,143)

 

$1.96

 

Forfeited

 

 

(28,001)

 

$5.56

 

Balance December 31, 2022

 

 

535,953

 

 

$5.47

 

 

 

 

 

 

 

 

 

 

Outstanding and exercisable at December 31, 2022

 

 

535,953

 

 

$5.47

 

 

At December 31, 2022 and 2021, the outstanding stock options have an intrinsic value of approximately $123,045 ($1,108,000 in 2021) and have a weighted average remaining term of 1.82 years (2.2 in 2021). Cashless options exercised in the year ended December 31, 2022 had an intrinsic value of $677,928 ($445,290 in 2021).