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SHAREHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
SHAREHOLDERS’ EQUITY

NOTE 6 – SHAREHOLDERS’ EQUITY

 

Common Stock

 

At the Company’s Annual Meeting of Shareholders held on July 9, 2020, the Company approved the Restated 2014 Omnibus Long-Term Incentive Plan (the “LTIP Plan”) in which the Company’s directors, officers, employees and consultants are eligible to participate. A total of 445,285 shares had been issued under the LTIP Plan and 1,554,715 were available for issuance as of March 31, 2022.

 

On January 18, 2021, the Company entered into an Equity Exchange Agreement (the “Exchange Agreement”), effective as of January 14, 2021, with two individuals who each owned 50% of the outstanding equity interests in Woundyne Medical, LLC (“Woundyne”). Pursuant to the Exchange Agreement, the Company acquired 100% of the issued and outstanding equity interests of Woundyne in exchange for the issuance of an aggregate of 29,536 shares of the Company’s common stock with a fair value of $1,000,000. The acquisition of the outstanding equity interests of Woundyne was accounted for as an asset acquisition. The primary asset acquired by the Company is the Woundyne software platform which allows data related to chronic and surgical wounds to be tracked, monitored, and interfaced with the software user’s electronic medical records. Woundyne has no other material assets, liabilities, or revenues. The issuance of these shares was capitalized as internal use software. The Company subsequently changed the name of Woundyne Medical, LLC to WounDerm, LLC.

 

On February 12, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cantor Fitzgerald & Co. as representative of several underwriters named therein (collectively, the “Underwriters”), pursuant to which the Company agreed to issue and sell an aggregate of 1,100,000 shares of the Company’s common stock to the Underwriters at a price to the public of $25.00 per share, less underwriting discounts and commissions (the “Offering”). Pursuant to the Underwriting Agreement, the Company granted the Underwriters a 30-day option to purchase up to an additional 165,000 shares of common stock at the public offering price, less underwriting discounts and commissions, which the Underwriters exercised in full. The Offering, including the purchase of the 165,000 additional shares of common stock, closed on February 17, 2021.

 

The net proceeds to the Company from the Offering were $28.9 million, after (i) giving effect to the Underwriter’s full exercise of its option to purchase additional shares of common stock, and (ii) deducting the underwriting discounts and commissions and offering expenses payable by the Company. Through an insured cash sweep service, the net proceeds have been deposited in accounts insured by the Federal Deposit Insurance Corporation.

 

Following the closing of the Offering in February 2021, the Company made the $750,000 Post Capital Raise Payment (as defined in the BIAKŌS License Agreement) to Rochal in the form of 20,834 shares of the Company’s common stock (see Notes 3 and 4).

 

On July 14, 2021, the Company entered into an asset purchase agreement with Rochal, effective July 1, 2021, pursuant to which the Company purchased certain assets of Rochal, including, among others, certain of Rochal’s intellectual property, furniture and equipment, supplies, rights and claims, other than certain excluded assets, all as more specifically set forth in the asset purchase agreement. In exchange for the acquired assets, the Company paid to Rochal (i) $496,100 in cash and (ii) 14,369 shares of the Company’s common stock, and assumed certain net liabilities of $3,900. Based on the trading price of the Company’s common stock on July 14, 2021, the fair value of the equity consideration transferred was determined to be $584,244.

 

Restricted Stock Awards

 

During the three months ended March 31, 2022, the Company issued restricted stock awards under the LTIP Plan which are subject to certain vesting provisions and other terms and conditions set forth in each recipient’s respective restricted stock agreement. The Company granted and issued 137,076 shares, net of forfeitures, of restricted common stock to Company employees and directors of the Company. The fair value of these awards was $3,474,575 based on the closing price of the Company’s common stock on the respective grant dates, which will be recognized as compensation expense on a straight-line basis over the vesting period of the awards.

 

Share-based compensation expense of $584,935 was recognized in selling, general and administrative expenses during the three months ended March 31, 2022, compared to $325,518 recognized during the three months ended March 31, 2021. Equity awards totaling $1,038,183, which were accrued as a liability as of December 31, 2021, were reclassed to equity in 2022 upon settlement of these awards.

 

At March 31, 2022, there was $3,555,585 of total unrecognized share-based compensation expense related to unvested share-based equity awards. Unrecognized share-based compensation expense is expected to be recognized over a weighted-average period of 1.3 years.

 

 

Below is a summary of restricted stock activity for the three months ended March 31, 2022:

 

  

For the Three Months Ended

March 31, 2022

 
       Weighted Average 
   Shares  

Grant Date Fair Value

 
Non-vested at beginning of period   161,450   $18.13 
Granted   137,467    25.35 
Vested   (119,346)   18.84 
Forfeited   (391)   26.79 
Non-vested at March 31, 2022   179,180   $23.18 

 

Stock Options

 

A summary of the status of outstanding stock options at March 31, 2022 and changes during the three-month period then ended is presented below:

 

   For the Three Months Ended
March 31, 2022		 
       Weighted   Weighted Average 
   Options   Average

Exercise Price

   Remaining Contract Life 
Outstanding at beginning of period   11,500   $6.00      
Granted   -    -      
Exercised   -    -      
Forfeited   -    -      
Expired   -    -      
Outstanding at March 31, 2022   11,500   $6.00    0.8 
                
Exercisable at March 31, 2022   11,500   $6.00    0.8