XML 27 R16.htm IDEA: XBRL DOCUMENT v3.23.1
SHAREHOLDERS EQUITY
 3 Months Ended
Mar. 31, 2023
Shareholders' Equity:  
NOTE 10. SHAREHOLDERS' EQUITY

NOTE 10. SHAREHOLDERS’ EQUITY

 

Our Board of Directors (the “Board”) may, without further action by our shareholders, from time to time, direct the issuance of any authorized but unissued or unreserved shares of preferred stock in series and at the time of issuance, determine the rights, preferences and limitations of each series. The holders of such preferred stock may be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up by us before any payment is made to the holders of our common stock. Furthermore, the Board could issue preferred stock with voting and other rights that could adversely affect the voting power of the holders of our common stock.

 

Convertible Series A Preferred Stock

 

Our authorized Convertible Series A Preferred Stock, $0.01 par value, consists of 1,000,000 shares. At March 31, 2023 and December 31, 2022, there were 63,750 shares issued and outstanding. The Convertible Series A Preferred Stock is convertible at the rate of one share of common stock for one share of Convertible Series A Preferred Stock.

Convertible Series B Preferred Stock

 

Our authorized Convertible Series B Preferred Stock, $1,000 stated value, 7.5% cumulative dividend, consists of 4,000 shares. At March 31, 2023 and December 31, 2022, there were no shares issued and outstanding, respectively. Each share of Convertible Series B Preferred Stock may be converted (at the holder’s election) into two hundred shares of our common stock.

 

Common Stock

 

In January 2022, we issued 51,750 shares of common stock valued at approximately $54,000 to members of our Board pursuant to our equity plan (see Note 12).

 

In January 2023, we issued 60,000 shares of common stock valued at approximately $51,000 to members of our Board pursuant to our equity plan (see Note 12).

 

Stock Options

 

In January 2022, we issued options to purchase 270,000 shares of common stock to Officers at an exercise price of $1.12 per share pursuant to an employment agreement. The options were valued at $297,766 and has a contractual term of 10 years. We utilized the Black-Scholes model to fair value the options received by the Officers with the following assumptions: volatility, 156%; expected dividend yield, 0%; risk free interest rate, 1.65%; and an expected life of 5 years. The grant date fair value of each share of common stock underlying the warrant was $1.03.

 

In January 2023, we issued options to purchase 175,000 shares of common stock to Officers at an exercise price of $0.85 per share pursuant to an employment agreement. The options were valued at $132,361 and has a contractual term of 10 years. We utilized the Black-Scholes model to fair value the warrant received by Officers with the following assumptions: volatility, 139%; expected dividend yield, 0%; risk free interest rate, 3.59%; and an expected life of 5 years. The grant date fair value of each share of common stock underlying the warrant was $0.76.

 

In January 2023, we issued an option to purchase 35,000 shares of common stock to an employee at an exercise price of $0.85 per share pursuant to an employment agreement. The option was valued at $26,472 and has a contractual term of 10 years. We utilized the Black-Scholes model to fair value the warrant received by our Chief Executive Officer with the following assumptions: volatility, 139%; expected dividend yield, 0%; risk free interest rate, 3.59%; and an expected life of 5 years. The grant date fair value of each share of common stock underlying the warrant was $0.76.

The following table summarizes stock options outstanding as of March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

(Unaudited)

 

 

December 31, 2022

 

 

 

Number of Options

 

 

Weighted Average

Exercise Price

 

 

Number of Options

 

 

Weighted Average

 Exercise Price

 

Outstanding, beginning of period

 

 

413,000

 

 

$1.65

 

 

 

143,000

 

 

$2.66

 

Granted

 

 

210,000

 

 

 

0.85

 

 

 

270,000

 

 

 

1.12

 

Exercised

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Expired

 

 

(12,500)

 

 

0.96

 

 

 

-

 

 

 

-

 

Outstanding, end of period

 

 

610,500

 

 

$1.10

 

 

 

413,000

 

 

$1.65

 

 

Options outstanding and exercisable by price range as of March 31, 2023 were as follows:

 

Outstanding Options

 

 

Average Weighted

 

 

Exercisable Options

 

Range

 

 

Number

 

 

Remaining Contractual

Life in Years

 

 

Number

 

 

Weighted Average

Exercise Price

 

$

0.80

 

 

 

27,500

 

 

 

2.20

 

 

 

27,500

 

 

$

0.80

 

$

0.85

 

 

 

210,000

 

 

 

9.83

 

 

 

210,000

 

 

$

0.85

 

$

0.88

 

 

 

31,250

 

 

 

1.01

 

 

 

31,250

 

 

$

0.88

 

$

0.96

 

 

 

12,500

 

 

 

1.02

 

 

 

12,500

 

 

$

0.96

 

$

1.12

 

 

 

270,000

 

 

 

9.06

 

 

 

270,000

 

 

$

1.12

 

$

1.93

 

 

 

10,500

 

 

 

4.06

 

 

 

10,500

 

 

$

1.93

 

$

2.16

 

 

 

5,000

 

 

 

2.00

 

 

 

5,000

 

 

$

2.16

 

$

4.40

 

 

 

12,500

 

 

 

3.05

 

 

 

12,500

 

 

$

4.40

 

$

7.06

 

 

 

31,250

 

 

 

2.50

 

 

 

31,250

 

 

$

7.06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

610,500

 

 

 

7.56

 

 

 

610,500

 

 

$

1.10

 

Stock Warrants

 

The following table summarizes the outstanding common stock warrants as of March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

(Unaudited)

 

 

December 31, 2022

 

 

 

(Unaudited)

 

 

Weighted Average

 Exercise Price

 

 

Number of Warrants

 

 

Weighted Average

Exercise Price

 

Outstanding, beginning of period

 

 

2,792,335

 

 

$2.25

 

 

 

3,381,021

 

 

$2.22

 

Granted

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

(31,250)

 

 

(0.21)

Expired

 

 

(18,750)

 

 

(1.20)

 

 

(557,436)

 

 

(2.23)

Outstanding, end of period

 

 

2,773,585

 

 

$2.26

 

 

 

2,792,335

 

 

$2.25

 

 

Warrants outstanding and exercisable by price range as of March 31, 2023 were as follows: 

 

Outstanding Warrants

 

 

 

 

Exercisable Warrants

 

Exercise Price

 

 

Number

 

 

Average Weighted

Remaining Contractual

Life in Years

 

 

Number

 

 

Weighted Average

Exercise Price

 

$

0.64

 

 

 

31,250

 

 

 

10.65

 

 

 

31,250

 

 

$0.64

 

$

0.80

 

 

 

125,000

 

 

 

10.89

 

 

 

125,000

 

 

$0.80

 

$

0.96

 

 

 

442,708

 

 

 

9.64

 

 

 

442,708

 

 

$0.96

 

$

1.12

 

 

 

6,250

 

 

 

1.05

 

 

 

6,250

 

 

$1.12

 

$

1.20

 

 

 

156,250

 

 

 

1.84

 

 

 

156,250

 

 

$1.20

 

$

1.68

 

 

 

1,434,721

 

 

 

3.50

 

 

 

1,434,721

 

 

$1.68

 

$

2.18

 

 

 

172,167

 

 

 

3.50

 

 

 

172,167

 

 

$2.18

 

$

4.00

 

 

 

28,750

 

 

 

7.07

 

 

 

28,750

 

 

$4.00

 

$

6.95

 

 

 

375,000

 

 

 

7.51

 

 

 

375,000

 

 

$6.95

 

$

8.40

 

 

 

1,489

 

 

 

0.39

 

 

 

1,489

 

 

$8.40

 

 

 

 

 

 

2,773,585

 

 

 

5.37

 

 

 

2,773,585

 

 

$2.26

 

 

There were no unvested warrants outstanding as of March 31, 2023.