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Stockholders’ Equity | 3 Months Ended
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Mar. 31, 2023
Equity [Abstract] |
Stockholders’ Equity | 5. Stockholders’ Equity Preferred Stock The Company is authorized to issue a total of 10,000,000 shares of preferred stock, par value $0.0001 per share. On March 17, 2015, the Company filed a Certificate of Designations, Preferences, Rights and Limitations of its Series A Convertible Preferred Stock with the Delaware Secretary of State to amend the Company’s certificate of incorporation. The Company has designated a total of 350,000 shares as Series A Convertible Preferred Stock, which are non-voting and are not subject to increase without the written consent of a majority of the holders of the Series A Convertible Preferred Stock or as otherwise set forth in the Preferences, Rights and Limitations. The holders of each tranche of 175,000 shares of the Series A Convertible Preferred Stock are entitled to receive a per share dividend equal to 1% of the annual net revenue of the Company divided by 175,000, until converted or redeemed. As of March 31, 2023 and December 31, 2022, the Company had 9,650,000 shares of undesignated preferred stock which may be issued with such rights and powers as the Board of Directors may designate. Each share of Series A Convertible Preferred Stock may be converted, at the option of the holder, into 2.0833 shares of common stock (subject to customary anti-dilution provisions) and the Series A Convertible Preferred Stock is subject to mandatory conversion at the conversion rate in the event of a merger or sale transaction resulting in gross proceeds to the Company of at least $21,875,000. The Series A Convertible Preferred Stock has a liquidation preference based on its assumed conversion into shares of common stock. The Series A Convertible Preferred Stock does not have a cash liquidation preference. If fully converted, the 350,000 outstanding shares of Series A Convertible Preferred Stock would convert into 729,167 shares of common stock at March 31, 2023 and December 31, 2022. The Series A Convertible Preferred Stock has no right to cash, except with respect to the payment of the aforementioned dividend based on the generation of revenues by the Company. The shares of Series A Convertible Preferred Stock do not have any registration rights. Based on the attributes of the Series A Convertible Preferred Stock as previously described, the Company has accounted for the Series A Convertible Preferred Stock as a permanent component of stockholders’ equity. Common Stock The Company is authorized to issue a total of 100,000,000 shares of common stock, par value $0.0001 per share. As of March 31, 2023 and December 31, 2022, the Company had 16,659,093 shares and 16,646,593 shares, respectively, of common stock issued, issuable and outstanding. Effective April 12, 2022, the Company completed the sale of 2,900,000 shares of common stock at a price of $2.00 per share in a registered direct equity offering, generating gross proceeds of $5,800,000. The total cash costs of this offering were $658,616, resulting in net proceeds of $5,141,384. Pursuant to the placement agents’ agreement, the Company granted warrants to the placement agents to purchase 290,000 shares of common stock at an exercise price of $2.00 per share exercisable through April 14, 2027. Effective March 10, 2023, the Company issued 12,500 shares of common stock upon the exercise of a stock option in the form of a warrant held by a consultant to the Company for 12,500 shares exercisable at $0.5025 per share for total cash proceeds of $6,281. Common Stock Warrants A summary of common stock warrant activity during the three months ended March 31, 2023 is presented below. Schedule of Warrants Outstanding
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (in Years) |
Warrants outstanding at December 31, 2022 |  |  | 1,900,310 |  |  | $ | 5.016 |  |  |  |  |
Issued |  |  | — |  |  |  | — |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |
Expired |  |  | — |  |  |  | — |  |  |  |  |
Warrants outstanding at March 31, 2023 |  |  | 1,900,310 |  |  | $ | 5.016 |  |  |  | 2.90 |
Warrants exercisable at December 31, 2022 |  |  | 1,900,310 |  |  | $ | 5.016 |  |  |  |  |
Warrants exercisable at March 31, 2023 |  |  | 1,900,310 |  |  | $ | 5.016 |  |  |  | 2.90 |
At March 31, 2023, the outstanding warrants are exercisable at the following prices per common share: Schedule of Warrants Outstanding and Exercisable
Exercise Prices |  |  | Warrants Outstanding (Shares) |
$ | 2.000 |  |  |  | 290,000 |
$ | 3.700 |  |  |  | 113,310 |
$ | 5.700 |  |  |  | 1,497,000 |
|  |  |  |  | 1,900,310 |
Based on a fair market value of $0.83 per share on March 31, 2023, there was no intrinsic value attributed to exercisable but unexercised common stock warrants at March 31, 2023. Information with respect to the issuance of common stock in connection with various stock-based compensation arrangements is provided at Note 7.

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