XML 27 R17.htm IDEA: XBRL DOCUMENT v3.22.2.2
STOCKHOLDERS’ EQUITY (DEFICIT)
 9 Months Ended
Sep. 30, 2022
Equity [Abstract]  
STOCKHOLDERS’ EQUITY (DEFICIT)

NOTE 11 STOCKHOLDERS’ EQUITY (DEFICIT)

 

(A) Common Stock

 

The Company issued the following common stock during the nine months ended September 30, 2022 and 2021:

 

Transaction Type  Shares Issued 

Valuation $

(Issued)

 

Range of Value

Per Share

2022 Equity Transactions               
Common stock issued per exercise of options   616,890   $390,624   $0.10-$3.00 
Common stock issued per exercise of warrants, cashless   416,750    —    — 
Common stock issued, pursuant to services provided   865,528    7,671,609    2.00-14.00 
Conversion of preferred stock   12,376,536    3,094,134    0.25 
Issuance of common stock pursuant to offering, net   1,650,000    23,100,000    14.00 
Issuance of common stock, pursuant to anti-dilutive provisions   335,073    4,691,022    14.00 

 

Transaction Type 

Qty Shares

Issued

  Valuation $ (Issued) 

Range of Value

Per Share

2021 Equity Transactions               
                
Common stock issued per PPM, Bridge Line Ventures   231,624   $2,779,464   $12.00 
Common stock issued, exercise of warrants, net   21,250    -    3.50 
Common stock issued, pursuant to services provided   190,000    570,000    3.00 
Conversion of preferred stock   200,000    50,000    0.25 

 

The Company issued 335,073 shares of its common stock to certain stockholders. who participated in private placements during 2019 through 2021, pursuant to certain anti-dilutive provisions, during the nine-month period ended September 30, 2022. The issuance of such shares was triggered based on the Company’s effective price of its initial public offering in February 2022. The fair value of the shares at the date of issuance were recorded as an increase in common stock and additional paid-in capital and accumulated deficit during the period and an increase in the denominator of the computation of the loss per share. The anti-dilutive provisions expire 24 months from the date of the private placements, which will lapse through December 31, 2023.

 

 

(B) Preferred Stock

 

The following is a summary of the Company’s Preferred Stock activity during the nine months ended September 30, 2022 and 2021:

 

Transaction Type  Quantity   Carrying Value   Value per Share 
Preferred Stock Balance at December 31, 2021   13,256,936   $3,314,233   $0.25 
Preferred Stock redemptions   (12,376,536)   (3,094,134)   0.25 
Preferred Stock Balance at September 30, 2022   880,400   $220,099   $0.25 

 

Transaction Type  Quantity   Carrying Value   Value per Share 
Preferred Stock Balance at December 31, 2020   13,456,936   $3,364,233   $0.25 
2021 Preferred Stock redemptions   (200,000)   (50,000)   0.25 
Preferred Stock Balance at September 30, 2021   13,256,936   $3,314,233   $0.25 

 

The Preferred Stock is convertible at the holder’s option. Shares of the Preferred Stock may be repurchased by the Company upon 30 days’ prior written notice, for $3.50 per share. Holders also have a put option, allowing them to sell their shares of Preferred Stock back to the Company at $0.25 per share, the Note conversion price, and therefore the stock is classified as Mezzanine equity rather than permanent equity. For the nine months ended September 30, 2022 and 2021, the Company paid dividends in the amount of $32,504 and $97,655, respectively, to the Preferred Stock shareholders.

 

(C) Stock Options

 

The following is a summary of the Company’s stock option activity during the nine-month periods ended September 30, 2022 and 2021:

 

Options  Shares  

Weighted

Average

Exercise Price

  

Weighted

Average

Remaining

Contractual

Life

(In Years)

  

Aggregate

Intrinsic

Value

 
Outstanding, January 1, 2022   21,927,182   $3.36           
Exercised   (616,890)   1.22    —    — 
Granted   13,832,500    11.74    —    — 
Forfeited   (1,752,292)   3.81    —    — 

Outstanding, September

30, 2022

   33,390,500   $7.72    3.74   $13,657,954 
                     

Exercisable, September

30, 2022

   11,852,438   $3.84    3.64   13,581,494 

 

Options  Shares  

Weighted

Average

Exercise Price

  

Weighted

Average

Remaining

Contractual

Life

(In Years)

  

Aggregate

Intrinsic

Value

 
Outstanding, January 1, 2021   14,010,432   $3.36           
Granted   7,679,250    6.59    —    — 
Forfeited   —    —    —    — 
Outstanding, September 30, 2021   21,689,682   $4.65    4.21   $556,089,127 
                     
Exercisable, September 30, 2021   11,965,158   $3.36    4.40    274,497,579 

 

The following table summarizes the range of the Black Scholes pricing model assumptions used by the Company during the nine months ended September 30, 2022 and September 30, 2021:

 

   September 30, 2022   September 30, 2021 
    Range     Range 
Stock price  $6.00 - $12.34   $3.00 - $3.00  
Exercise price  $6.00 - $14.00   $3.00 - $12.00 
Expected life (in years)   1.5 – 10.0    1.3 
Volatility   37% - 54%   34%
Risk-fee interest rate   1.37% - 2.97%   .09% - 2.49%
Dividend yield   —    — 

 

The Company cannot use its historical volatility as expected volatility because there is not enough liquidity in trades of common stock during a term comparable to the expected term of stock option issued. The Company relies on the expected volatility of comparable publicly traded companies within its industry sector, which is deemed more relevant, to compute its expected volatility.

 

Unamortized future option expense was $2,871,833 (excluding certain market-based options which management cannot ascertain to have a probable outcome) at September 30, 2022 and it is expected to be recognized over a weighted-average period of 4.00 years.

 

 

(D) Warrants Issued

 

The following is a summary of the Company’s warrant activity during the nine-month periods ended September 30, 2022 and 2021:

 

  

Number of

Warrants

  

Weighted Average

Exercise Price

 
Balance, January 1, 2022   2,127,895   $5.4 
Issued   132,000    18.20 
Exercised   (535,000)   3.30 
Forfeited   (785,000)   3.01 
Balance, September 30, 2022   939,895   $9.16 

 

   Number of Warrants   Weighted Average Exercise Price 
Balance, January 1, 2021   1,602,415   $3.23 
Issued   261,624    12.00 
Exercised   (30,000)   3.50 
Forfeited/Cancelled   —    — 
Balance, September 30, 2021   1,834,039   $4.34