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STOCKHOLDERS EQUITY
 3 Months Ended
Mar. 31, 2024
STOCKHOLDERS' EQUITY  
STOCKHOLDERS' EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

 

On January 25, 2023, the holders of 1,692,672 shares of Series D Preferred stock converted the preferred shares and the Company issued 1,692,672 shares of common stock.  The Company also paid the holders $787,730 for dividends payable as declared on November 28, 2022. 1,590,672 shares of the 1,692,672 shares of Series D Preferred stock that were converted and $740,261 of the $787,730 of dividends paid related to the estate of John Lawrence, who was a prior President and Chairman of the Company.

 

On January 26, 2023, in conjunction with its share repurchase plan, the Company returned to treasury and cancelled 418,696 of its common shares which were repurchased prior to December 31, 2022 for $202,980.

Stock option and RSU awards were granted on January 29, 2024 and March 1, 2024 in accordance with our 2023 Equity Incentive Plan, which was approved by the Company’s shareholders. No other equity grants were outstanding at March 31, 2024. The Company’s Board of Directors granted to an employee on January 29, 2024 100,000 RSUs, one-third of which vest each year beginning each anniversary subsequent to the grant date, and 200,000 stock options with performance-based vesting conditions and a 10-year term. The fair value of the RSUs granted on January 29, 2024 was $24,000 and the fair value of the stock options granted on January 29, 2024 was $48,000. The Company’s Board of Directors also granted 2,375,000 RSUs and 3,400,000 stock options to employees and non-employee directors on March 1, 2024 with the RSUs vesting one-third each year beginning on the grant date, 2,500,000 stock options vesting one-third each year beginning each anniversary subsequent to the grant date, and 900,000 stock options with performance-based vesting conditions and a 3-year term. The fair value of the RSUs granted on March 1, 2024 was $522,500 and the fair value of the stock options granted on March 1, 2024 was $544,000. One-third of the RSUs granted on March 1, 2024, which equates to 791,667 shares of the Company’s common stock, vested during the three months ended March 31, 2024. At March 31, 2024, 1,583,333 RSU’s are unvested from the March 1, 2024 grant and 100,000 RSUs are unvested from the January 29, 2024 grant. The Company expensed $205,925 and $nil during the three months ended March 31, 2024 and 2023, respectively, related to stock option and RSU grants.

 

The remaining unrecognized compensation expense for RSUs granted on January 29, 2024 was $22,667 at March 31, 2024, which is expected to be recognized over the next 2.83 years. The remaining unrecognized compensation expense for RSUs granted on March 1, 2024 was $333,819 at March 31, 2024, which is expected to be recognized over the next 2.92 years.

 

The remaining unrecognized compensation expense for stock options granted on January 29, 2024 was $47,200 at March 31, 2024, which is expected to be recognized over the next 8.33 years. These stock options had no intrinsic value at March 31, 2024. The remaining unrecognized compensation expense for stock options granted on March 1, 2024 was $528,889 at March 31, 2024, which is expected to be recognized over the next 2.92 years. The intrinsic value of these stock options at March 31, 2024 was $102,000.

 

The fair value of stock options granted on January 29, 2024 and March 1, 2024 and the key assumptions used in the Black-Scholes valuation model to calculate the fair value are as follows:

 

 

 

Stock Options

 

 

Stock Options

 

 

 

Granted On

 

 

Granted On

 

 

 

January 29,

2024

 

 

March 1,

2024

 

Fair value per share of options granted

 

$0.24

 

 

$0.16

 

Options granted

 

 

200,000

 

 

 

3,400,000

 

Exercise price per share

 

$0.25

 

 

$0.22

 

Expected Term (in years)

 

 

10

 

 

 

3

 

Risk-free rate

 

 

4.08%

 

 

4.32%

Volatility

 

 

302.65%

 

 

116.28%

Common stock warrants

 

No warrants were issued, expired, or exercised during the three months ended March 31, 2024 and 2023.

 

The composition of the Company’s warrants outstanding at March 31, 2024 and 2023 was as follows:

 

Number of warrants

 

 

Exercise Price

 

 

Expiration Date

 

Remaining life (years)

 

 

2,285,715

 

 

$0.46

 

 

7/31/2025

 

 

1.33

 

 

804,000

 

 

$0.46

 

 

1/27/2026

 

 

1.83

 

 

7,650,000

 

 

$0.85

 

 

8/3/2026

 

2..34

 

 

1,606,500

 

 

$0.85

 

 

2/1/2026

 

 

1.84

 

 

12,346,215