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Note 9 - Stockholders' Equity | 3 Months Ended
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Mar. 31, 2023
Notes to Financial Statements |
Equity [Text Block] | NOTE 9 – STOCKHOLDERS’ EQUITY Common Stock – The Company has 100,000,000 authorized shares of common stock, $0.001 par value (“Common Stock”). As of March 31, 2023 and December 2022, there were 45,271,441 and 43,986,079 shares of Common Stock issued and outstanding, respectively. Voting -- Holders of common stock are entitled to one vote for each share held of record on each matter submitted to a vote of stockholders, including the election of directors, and do not have any right to cumulate votes in the election of directors. Dividends -- Subject to the rights and preferences of the holders of any series of preferred stock, if any, which may at the time be outstanding, holders of Common Stock are entitled to receive ratably such dividends as our Board of Directors from time to time may declare out of funds legally available. Liquidation Rights -- In the event of any liquidation, dissolution or winding-up of affairs, after payment of all of our debts and liabilities and subject to the rights and preferences of the holders of any outstanding shares of any series of our preferred stock, the holders of Common Stock will be entitled to share ratably in the distribution of any of our remaining assets. Other Matters -- Holders of common stock have no conversion, preemptive or other subscription rights, and there are no redemption rights or sinking fund provisions with respect to our common stock. All of the issued and outstanding shares of common stock on the date of this Annual Report are validly issued, fully paid and non-assessable. Preferred Stock -- Our Board of Directors has the authority to issue preferred stock in one or more classes or series and to fix the designations, powers, preferences and rights, qualifications, limitations or restrictions thereof, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any class or series, without further vote or action by the stockholders. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control without further action by the stockholders and may adversely affect the voting and other rights of the holders of Common Stock. The Company has 2,500,000 authorized Preferred stock, $0.001 par value. As of March 31, 2023, there were no preferred shares issued and outstanding. Stock Issuance Since January 1, 2023, the Company has made the following issuances of Common Stock: On January 3, 2023, the Company issued 18,719 shares of Common Stock to settle RSUs. The RSUs were valued at $110,254 for services provided by the Board of Directors in 2022. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2022. On January 3, 2023, the Company issued 1,266,643 shares of Common Stock to settle RSUs. The RSUs were valued at $674,164 for services provided by management in 2022. The Company recognized the stock-based compensation of the award over the requisite service period during the year ended December 31, 2022. Warrants On August 17, 2021, the Company entered an exchange agreement with an existing shareholder to exchange an aggregate of 500,000 shares of Common Stock for equivalent shares of prefunded warrants (the “Exchange Agreement”). The prefunded warrants are exercisable at an exercise price of $0.001 per share, subject to adjustments as provided under the terms of the prefunded warrants. The prefunded warrants are exercisable at any time on or after the closing date. The Exchange Agreement contained additional terms typical of exchange agreements including representations and warranties of the parties. In connection with and as of the date of the Exchange Agreement, the Company issued the prefunded warrants to the shareholder, and the prefunded warrants are exercisable on August 17, 2021, subject to the limitations on exercise and conditions set forth by the prefunded warrants. The prefunded warrants became subject to customary adjustments in the event of stock splits and dividends, fundamental transactions, and subsequent offerings of rights to purchase stock. On May 17, 2022, the Company entered a warrant purchase agreement with existing shareholders to purchase 30,425,000 shares of common stock at an offering price of $0.499 per prefunded warrant, which represents the offering price of $0.50 per share of the Company’s common stock less the $0.001 per share exercise price for each pre-funded warrant, for total gross proceeds of approximately $15,182,075 as part of the Company’s public offering of common stock and pre-funded warrants totaling $23,000,000 before underwriting discounts, commissions, and offering expenses payable by the Company. On June 23, 2022, the Company completed a private placement of Senior Notes in an aggregate principal amount of $6,000,000 and warrants to purchase 4,250,000 shares of common stock of the Company to affiliates of Bleichroeder L.P., 21 April Fund, L.P., and 21 April Fund, Ltd. (together, the "Purchasers"), pursuant to a note and warrant purchase agreement. Additionally, as part of the transaction, the Company issued 230,770 warrants to the placement agent. All warrants issued in this transaction have an exercise price of $0.65 per share, a term of five years, and are exercisable for cash at any time. The following is a summary of the periodic changes in warrants outstanding for the three months ended March 31, 2023 and 2022:
|  | 2023 |  |  | 2022 |
Warrants outstanding at January 1 |  |  | 35,920,000 |  |  |  | 1,015,000 |
Warrants issued in connection with public offering and private placement |  |  | - |  |  |  | - |
Exercises and conversions |  |  | - |  |  |  | - |
Warrants outstanding at March 31 |  |  | 35,920,000 |  |  |  | 1,015,000 |
Stock-based Compensation In 2013, the Company’s Board of Directors adopted a Share Incentive Plan (the “Incentive Plan”). Under the terms and conditions of the Incentive Plan, the Board of Directors is empowered to grant RSUs to officers, directors, and consultants of the Company. At March 31, 2023, 1,123,529 RSUs were granted and outstanding under the Incentive Plan. Directors of the Company receive share compensation as follows: an initial grant of 25,000 RSUs of Common Stock that vest over a three-year period upon appointment to the Board, followed by an annual grant of $36,750 ($73,500 for the Chairman of the Board) in RSUs per annum after full vesting of the initial grant. In 2022, the Company’s Board of Directors adopted an Equity Incentive Plan (the “2022 Incentive Plan”). Under the terms and conditions of the 2022 Incentive Plan, the Board of Directors is empowered to grant RSUs to officers and directors of the Company. At March 31, 2023, 1,709,379 RSUs were granted and outstanding under the 2022 Incentive Plan. The Company recognizes compensation costs for RSU grants to directors and management based on the stock price on the date of the grant. The Company recognized stock-based compensation expense related to RSU grants of $157,174 and $178,778 for the three-month period ended March 31, 2023 and 2022, respectively. On March 31, 2023, the Company had $1,122,970 of unrecognized compensation cost related to non-vested stock grants. A summary of the status of the RSUs as of March 31, 2023 and changes during the period are presented below:
|  | March 31, 2023 |
|  | Number of units |  |  | Weighted Average Grant-Date Fair value |  |  | Aggregated Intrinsic Value |
Outstanding, December 31, 2022 |  |  | 2,408,892 |  |  | $ | 0.60 |  |  | $ | - |
Granted |  |  | 1,709,379 |  |  |  | 0.38 |  |  |  | - |
Vested and settled with share issuance |  |  | (1,285,362 | ) |  |  | (0.61 | ) |  |  | - |
Outstanding, March 31, 2023 |  |  | 2,832,909 |  |  | $ | 0.46 |  |  | $ | - |

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