XML 24 R13.htm IDEA: XBRL DOCUMENT v3.22.2.2
EQUITY
 6 Months Ended
Jun. 30, 2022
Equity [Abstract]  
EQUITY

NOTE 6. EQUITY

 

Preferred Stock

 

The Company has been authorized to issue 750,000,000 shares of $0.086 par value Preferred Stock. The Board of Directors is expressly vested with the authority to divide any or all of the Preferred Stock into series and to fix and determine the relative rights and preferences of the shares of each series so established, within certain guidelines established in the Articles of Incorporation.

 

In January 2022, the Company issued 9,076 shares of its newly designated Series B convertible preferred stock through the Private Placement for the purpose of raising capital. These shares remain issued and outstanding as of June 30, 2022.

 

The Series B convertible preferred stock has no voting rights and initially each share of Series B convertible preferred stock may be converted into 245 shares of the Company’s common stock. The holders of the Series B convertible preferred stock are not entitled to receive any dividends other than any dividends paid on account of the common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of common stock would receive if the Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder) to common stock which amounts shall be paid pari passu with all holders of common stock.

 

Common Stock

 

The Company has been authorized to issue 2,000,000,000   shares of common stock, $0.086 par value. Each share of issued and outstanding common stock shall entitle the holder thereof to fully participate in all shareholder meetings, to cast one vote on each matter with respect to which shareholders have the right to vote, and to share ratably in all dividends and other distributions declared and paid with respect to common stock, as well as in the net assets of the corporation upon liquidation or dissolution.

 

In January 2022, the Company issued 2,670,892 shares of common stock through the Private Placement for the purpose of raising capital. See Note 5 - Warrant Liabilities for proceeds received by the Company.

 

In January 2022, the Company issued 606,037 shares of common stock pursuant to the Medigap Acquisition.

 

In January 2022, upon agreement with Series A warrant holders, 375,000 warrants were exercised at a price of $6.60 into 375,000 of the Company’s common stock.

 

In March 2022, the Company issued 6,000 shares of the Company’s common stock due to the vesting of 6,000 stock awards pursuant to an employee agreement.

 

In May and June 2022, 3,276,929 Series C prepaid warrants were exchanged for 3,276,929 shares of the Company’s common stock.

 

As of June 30, 2022 and December 31, 2021, there were 14,614,038 and 10,956,109 shares of Common Stock outstanding, respectively.

 

Warrants

 

Series A warrant holders exercised 375,000 Series A warrants in January 2022, resulting in 1,695,000 of Series A warrants remaining issued and outstanding as of June 30, 2022.

 

 

In January 2022, as a result of the issuance of common stock in the January 2022 stock offering and the Medigap Acquisition, the Company received a deficiency notification from Nasdaq indicating violation of Listing Rule 5365(a). As part of its remediation plan, in March 2022, the Company entered into Exchange Agreements with the holders of common stock issued in January 2022. Pursuant to the Exchange Agreements, the Company issued 3,276,929 Series C prepaid warrants in exchange for 3,276,929 shares of the Company’s common stock. Additionally, as compensation for entering into the Exchange Agreements, the Company issued 1,222,498 Series D prepaid warrants to the January 2022 stock offering investors for no additional consideration. The fair value of the Series D prepaid warrants was treated as a deemed dividend and accordingly was treated as a reduction from income available to common stockholders in the calculation of earnings per share. Refer to Note 7, Earnings (Loss) Per Share for additional information.

 

In May and June 2022, the 3,276,929 Series C prepaid warrants were converted for 3,276,929 shares of the Company’s common stock for an exercise price of $0.001.   Through June 30, 2022, the Company has received payments of $1,336 from one investor for these issuances.

 

Equity-based Compensation

 

Between February and May 2022, three existing employees were awarded bonuses consisting of shares of the Company’s common stock to be vested immediately. The shares granted in 2022 were valued at $766,250. For the three and six months ended June 30, 2022, compensation expense on these grants totaled $100,000 and $766,250, respectively. As of June 30, 2022, these shares have not been issued.

 

In April 2022 , pursuant to an agreement between the Company and an Executive, the Executive will be compensated with 60,000 shares of the Company’s Common stock. These shares vest quarterly over a three-year period. The shares granted were valued at $178,200 at the date of the grant. For the three and six months ended June 30, 2022, compensation expense on this grant was $70,721. As of June 30, 2022, no shares were issued under this contract.