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Stockholders’ Equity
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Stockholders’ Equity

Note 10. Stockholders’ Equity

 

During the year ended December 31, 2020, the Company completed a funding, including a Private Placement Offering for common shares priced at $6.50 per share (subject to adjustment) in the amount of $3,825,000 and the issuance of 588,462 shares. The investors of this Private Placement Offering were granted 294,231 O warrants, exercisable for a period of 3 years at an exercise price of $7.80 per share (subject to adjustment). If the volume-weighted average trading price for the 20 consecutive trading days that conclude upon 6 months after the initial closing (the “Six Month Price”) exceeds or equals $6.50 per share (the “Target Price”), the per share purchase price will not be adjusted. If the Six Month Price is less than the Target Price, the per share purchase price will be automatically reduced to the Six Month Price, but in no event less than $4.55 per share, in which case the Company shall issue to each investor, pro-rata based on such investor’s investment: (a) shares in a quantity that equals the difference between the number of shares issued to such purchaser at closing and the number of shares that would have been issued to such purchaser at closing at the Six Month Price; and (b) a warrant for 0.50 shares for each additional share issued, with an exercise price equal to the sum of $1.30 per share and the Six Month Price, but in no event less than $5.85 per share. On September 28, 2020, the Company issued 409,451 additional shares in accordance with provisions of the Private Placement Offering and an additional 204,726 warrants exercisable at $5.85 per share.

 

In 2020, the Company issued 366,925 shares of common stock in exchange for convertible notes and 35,308 warrants to convertible noteholders that extended the term of their convertible notes (Note 7).

 

In 2020, the Company, at its option, issued 50,358 shares of common stock to pay interest due of $392,789.

 

In 2020, the Company issued 20,966 shares of common stock, valued between $3.25 - $6.50 per share, for services rendered.

 

In 2020, the Company settled deferred executive compensation liabilities with the issuance of 121,076 warrants exercisable at $3.51 per share. The fair value of the warrants totaled $251,837, resulting in $83,945 of additional stock-based compensation.

 

On June 1, 2021, the Company completed a private placement of 1,282,051 shares of its common stock at $4.68 per share, resulting in gross proceeds of $6,000,000.

 

In 2021, holders of debt converted a total of $399,000 in principal and $234,410 in interest into 133,991 shares of common stock, and debt in the amount of $840,000 was retired (Note 7).

 

 

Barfresh food Group Inc.

Notes to Consolidated Financial Statements

 

In 2021, the Company issued 17,273 shares of common stock, valued between $4.94 - $10.15 per share, for services rendered.

 

In 2021, the Company issued a warrant to purchase 10,550 shares of common stock at exercise prices ranging from $3.25 - $5.46 (weighted average $4.15) in exchange for services rendered.

 

Warrants

 

The following is a summary of changes in warrants outstanding for the years ended December 31, 2021 and 2020:

   Number of warrants 
Outstanding at December 31,2019   2,014,694 
Issued   655,763 
Expired   (466,154)
Outstanding at December 31, 2020   2,204,303 
Issued   10,550 
Expired   (927,449)
Outstanding at December 31, 2021   1,287,404 

 

The following is a summary of all outstanding warrants as of December 31, 2021:

 

Warrant issuance event  Number of warrants   Weighted average exercise price   Exercise price per share   Remaining term in years   Intrinsic value at date of grant 
                     
Private placements of common stock   818,683   $7.65   $6.89 - 7.80    1.28   $- 
Private placement of notes   214,356   $8.39   $7.80 - 9.10    0.76   $- 
Settlement of deferred compensation   243,815   $6.32   $3.51 - 9.10    2.74   $- 
Settlement of services   10,550   $4.15   $3.12 - 5.46    0.62   $- 
    1,287,404   $7.49   $3.12 - 9.10    1.47   $- 

 

Equity Incentive Plan

 

Under the 2015 Equity Incentive Plan (the “2015 Plan”), the Company has reserved 1,153,846 shares for equity incentive awards for issuance to employees, members of the board of directors and other service providers. Awards may take the form of options, restricted stock, restricted stock units, performance shares and stock appreciation rights. The Company has only issued options with no intrinsic value through December 31, 2021, and issues new shares upon exercise of options. As of December 31, 2021, there were 435,750 shares available for the issuance of awards under the 2015 Plan.

 

 

Barfresh food Group Inc.

Notes to Consolidated Financial Statements

 

The following summarizes activity related to stock options for the years ended December 31, 2021 and 2020:

   Number of Options   Exercise price per share   Remaining term in years 
Outstanding January 1, 2020   554,076    $5.20 - $11.31     4.6 
Issued   82,258    $4.42 - $5.72       
Cancelled/expired   (48,109)          
Outstanding on December 31, 2020   588,225    $4.42 - $11.31     3.5 
Issued   58,113    $4.94 - $6.37       
Cancelled/expired   (44,187)          
Outstanding on December 31, 2021   602,151    $4.42 - $11.31     3.8 
                
Exercisable, December 31, 2021   513,416    $4.42 - $11.31     3.3 

 

Stock-Based Compensation

 

The fair value of the options issued was calculated using the Black-Sholes option pricing model, based on the criteria shown below:

   2021   2020 
Expected term (in years)   5.5 - 8.0     5.5 - 8.0  
Expected volatility   85.0% - 89.4 %   73.4% - 75.8 %
Risk-free interest rate   0.7% - 1.3 %   0.3% - 1.6%  
Expected dividends  $-   $- 
Weighted average grant date fair value per share  $4.04   $2.65 

 

The total amount of equity-based compensation included in general and administrative expense in the accompanying consolidated statements of operations was $91,959 and $276,641 for the years ended December 31, 2021 and 2020.

 

As of December 31, 2021, the Company has $148,398 of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted average period of 1.5 years.