XML 41 R24.htm IDEA: XBRL DOCUMENT

Temporary Equity

12 Months Ended

Dec. 31, 2021

Note 18. Temporary Equity

Shares of Series B, B-1, C and C-1 convertible preferred stock hold conversion features providing that, at the holder’s election, the holder may convert the preferred stock into common stock. Upon conversion, the Company may be required to deliver a variable number of equity shares that is determined by using a formula based on the market price of the Company’s Common Stock. After four years from the date of issuance, Series C preferred shareholders are forced to automatically convert to Common Stock. On May 1, 2021, all outstanding shares of Series B and B-1 converted at 1-for-1 to Common Stock. On May 4, 2021, all outstanding shares of Series C-1 converted at 1-for-1 to Common Stock. For each respective series, the holder may convert their preferred shares to common shares at the original issue price as defined, which ranges from between $6.00 per share to $12.00 per share, at the lesser of the original issue price or 90% of the market price on the conversion date. As of December 31, 2020, the market price of the Company’s Common Stock was $15.00 per share. There is no contractual cap on the number of common shares that the Company could be required to deliver on preferred shareholders’ conversions to Common Stock.

Accordingly, under ASC 815-40-25-10 the Company may be forced to settle these conversion features in cash, specifically since it is unknown as to what date the shareholders’ may convert their preferred stock to common stock and if there will be sufficient authorized and unissued common shares on that date. As of December 31, 2020 the Company did have sufficient authorized and unissued common shares to satisfy all preferred shareholders interest if it were converted to Common Stock, although if the stock price were to drop below $0.60 per share and the Company may be forced to settle such conversions in cash, which may consider them redeemable. Accordingly, Series B, B-1, C and C-1 preferred stock has been classified in temporary equity.

The following table shows all changes to temporary equity during for the years ended December 31, 2021 and 2020.

Schedule Of Temporary Equity
	Convertible Preferred Stock
	Series B						Series B-1						Series C-1
	Shares			Amount			Shares			Amount			Shares			Amount
December 31, 2019		708,396		$	4,250,380			758,623		$	5,689,690			446,159		$	6,841,409
Dividend paid in Series B-1 Preferred Stock		–			–			23,039			172,795			–			–
Conversion of Series B, B-1, and C-1 Preferred Stock to Common Stock		(491,480	)		(2,948,880	)		(313,934	)		(2,354,504	)		(190,869	)		(2,290,432	)
December 31, 2020		216,916		$	1,301,500			467,728		$	3,507,981			255,290		$	4,550,977
Sercies C-1 Issue for a reduction in stock payables		–			–			–			–			5,413			64,950
Dividend paid in Series B-1 Preferred Stock		–			–			5,626			42,196			–			–
Conversion of Series B and B-1 Preferred Stock to Common Stock		(216,916	)		(1,301,500	)		(473,354	)		(3,550,177	)		(260,703	)		(4,615,927	)
December 31, 2021		–		$	–			–		$	–			–		$	–