CAPITAL STOCK

12 Months Ended

Dec. 31, 2021

Equity [Abstract]

CAPITAL STOCK

NOTE 7 – CAPITAL STOCK

Common Stock - At-the-Market Offerings

In May 2019, the Company entered into an At-the-Market Issuance Sales Agreement (the “Sales Agreement”) with WestPark Capital, Inc. (“WestPark Capital”) pursuant to which the Company could sell, at its option, up to an aggregate of $5.2 million in shares of its common stock through WestPark Capital, as sales agent. Sales of shares under the Sales Agreement (the “2019 ATM Offering”) were made, in accordance with one or more placement notices delivered by the Company to WestPark Capital, which notices set parameters under which shares could be sold. The 2019 ATM Offering was made pursuant to a shelf registration statement by methods deemed to be “at the market,” as defined in Rule 415 promulgated under the Securities Act of 1933. The Company paid WestPark a commission in cash equal to 3% of the gross proceeds from the sale of shares in the 2019 ATM Offering. Additionally, the Company reimbursed WestPark Capital for $18,000 of expenses incurred in connection with the 2019 ATM Offering.

During the year ended December 31, 2020, in connection with the 2019 ATM Officering, the Company (1) sold an aggregate of 1,684,760 shares in connection with the 2019 ATM Offering and received proceeds, net of commissions and expenses, of $4,376,549, and (2) collected $58,575 of subscription receivable attributable to shares sold under the 2019 ATM Offering during 2019.

In January 2021, the Company entered into a Sales Agreement with Univest Securities, LLC (“Univest”) pursuant to which the Company could sell (the “2021 ATM Offering”), at its option, up to an aggregate of $4.768 million in shares of its common stock through Univest, as sales agent. Sales of shares under the Sales Agreement (the “2021 ATM Offering”) were made, in accordance with placement notices delivered to Univest, which notices set parameters under which shares could be sold. The 2021 ATM Offering was made pursuant to a shelf registration statement by methods deemed to be “at the market,” as defined in Rule 415 promulgated under the Securities Act of 1933. The Company paid Univest a commission in cash equal to 3% of the gross proceeds from the sale of shares in the 2021 ATM Offering. The Company reimbursed Univest for $18,000 of expenses incurred in connection with the 2021 ATM Offering.

In January 2021, the Company sold an aggregate of 2,108,520 shares in connection with the 2021 ATM Offering and received proceeds, net of commissions and expenses, of $4.6 million.

In February 2021, the Company entered into another Sales Agreement with Univest pursuant to which the Company could sell (the “2021 Supplemental ATM Offering”), at its option, up to an aggregate of $2.03 million in shares of its common stock through Univest, as sales agent. Sales of shares under the Sales Agreement (the “2021 Supplemental ATM Offering”) were made, in accordance with placement notices delivered to Univest, which notices set parameters under which shares could be sold. The 2021 Supplemental ATM Offering was made pursuant to a shelf registration statement by methods deemed to be “at the market,” as defined in Rule 415 promulgated under the Securities Act of 1933. The Company paid Univest a commission in cash equal to 3% of the gross proceeds from the sale of shares in the 2021 Supplemental ATM Offering. The Company reimbursed Univest for $18,000 of expenses incurred in connection with the 2021 Supplemental ATM Offering.

In February 2021, the Company sold an aggregate of 813,100 shares in connection with the 2021 Supplemental ATM Offering and received proceeds, net of commissions and expenses, of $2.0 million.

Preferred Stock

The Company has authorized 10,000,000 shares of preferred stock with a par value of $0.001. The Board of Directors shall determine the designations, rights, preferences, privileges and voting rights of the preferred stock as well as any restrictions and qualifications thereon. As of December 31, 2021, the Company had no shares of preferred stock issued and outstanding.

Series A Convertible Preferred Stock

In January 2017, the Company issued 1,200 shares of 12% Series A Convertible Preferred Stock (the “Series A Preferred Stock”) for aggregate gross proceeds of $1.2 million. The Series A Preferred Stock (i) accrued a cumulative dividend, commencing July 1, 2017, at 12% payable, if and when declared, quarterly; (ii) was convertible at the option of the holder into shares of common stock at a conversion price of $2.50 per share, (iii) had a liquidation preference of $1,000 per share plus accrued and unpaid dividends; and (iv) was redeemable at the Company’s option, commencing on the second anniversary of the issue date, at a premium to issue price, which premium decreases from 12% to 0% following the fifth anniversary of the issue date, plus accrued and unpaid dividends.

During 2021 and 2020, respectively, the Company paid $20,501 and $130,950 of dividends on its Series A Preferred Stock.

In February 2021, 60 shares of Series A Preferred Stock were converted into 24,000 shares of common stock, and the Company redeemed all outstanding shares of Series A Preferred Stock for cash paid of $1.07 million plus accrued dividends totaling $21,501.

Series B Convertible Preferred Stock

In May 2017, the Company received $909,600 from the sale of 909.6 Units (the “Units”), each Unit consisting of one share of 12.0% Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and a Warrant (the “Series B Warrant”). The Series B Preferred Stock (i) accrued a cumulative dividend at 12% payable, if and when declared, quarterly; (ii) was convertible at the option of the holder into shares of common stock at a conversion price of $4.50 per share, (iii) had a liquidation preference of $1,000 per share plus accrued and unpaid dividends; and (iv) was redeemable at the Company’s option, commencing on the second anniversary of the issue date, at a premium to issue price, which premium decreases from 12% to 0% following the fifth anniversary of the issue date, plus accrued and unpaid dividends.

During 2021 and 2020, respectively, the Company paid $16,700 and $100,950 of dividends on its Series B Preferred Stock.

In February 2021, the Company redeemed all outstanding shares of Series B Preferred Stock for cash paid of $0.9 million plus accrued dividends of $16,700.

Warrants

Consultant Warrants. In September 2017, the Company issued warrants (the “Consultant Warrants”) to a consultant. The Consultant Warrants were exercisable to purchase 4,000 shares of common stock at $6.875 per share and expired on December 31, 2021. The relative value of the warrants were valued on the date of grant at $16,132 using the Black-Scholes option-pricing model with the following parameters: (1) risk-free interest rate of 1.63% based on the applicable US Treasury bill rate; (2) expected life in years of 4.32; (3) expected stock volatility of 99.75% based on the trading history of the Company; and (4) expected dividend yield of 0%. The Company recognized $0 of stock-based compensation expense related to the vesting of the Consultant Warrants during each of the years ended December 31, 2021 and 2020.

Bridge Loan Warrants. In September 2019, the Company issued the warrants in conjunction with a bridge loan. The Bridge Loan Warrants are exercisable, for a period of ten years, expiring September 18, 2029, to purchase an aggregate of 94,400 shares of common stock of the Company at $2.50 per share. The relative fair value of the warrants was determined on the date of grant at $144,948 using the Black Scholes option-pricing model with the following parameters: (1) risk free interest rate of 1.80% based on the applicable US Treasury bill rate; (2) expected life in years of 10.0; (3) expected stock volatility of 82.9% based on the trading history of the Company; and (4) expected dividend yield of 0%. The relative fair value of the warrants was recorded as debt discount on the Bridge Loan Notes and was amortized as additional interest expense over the term of the notes.

A summary of warrant activity and related information for 2021 and 2020 is presented below:

	Warrants		Weighted-Average Exercise Price		Aggregate Intrinsic Value
Outstanding at December 31, 2019		98,400	$	2.63
Issued		—		—
Exercised		—		—
Expired		—	$	—
Outstanding at December 31, 2020		98,400	$	2.63
Issued		—		—
Exercised		—		—
Expired		4,000		6.88
Outstanding at December 31, 2021		94,400	$	2.50	$	—
Exercisable at December 31, 2021		94,400	$	2.50	$	—