Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.21.1
Equity
3 Months Ended
Mar. 31, 2021
Stockholders' Equity Note [Abstract]  
EQUITY

NOTE 8 – EQUITY


2020 Incentive Stock Plan


The Company held its annual meeting on August 4, 2020. During its annual meeting, the Company approved 2020 Incentive Stock Plan and reserved 5,000,000 shares of common stock for issuance thereunder.


Common Shares Sold for Cash


On December 13, 2019, the Company entered into an Open Market Sale AgreementSM (the “Sales Agreement”) with Jefferies LLC, as sales agent (“Jefferies”), pursuant to which the Company may offer and sell, from time to time, through Jefferies, shares of its common stock. During the three months ended March 31, 2021, Jefferies sold an aggregate of 1,848,267 shares of common stock at an average price of $1.34 per share to investors. The Company recorded net proceeds of $2,337,259, net of commission and other offering costs of $144,146.


Common Shares Issued for Services


During the three months ended March 31, 2021, the Company issued a total of 300,000 shares of its common stock for services rendered. These shares were valued at $360,000, the fair market values on the grant dates using the reported closing share prices on the dates of grant and the Company recorded stock-based compensation expense of $98,968 for the three months ended March 31, 2021 and reduced accrued liabilities of $261,032.


Options


The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at March 31, 2021:


Options Outstanding     Options Exercisable  
Range of
Exercise
Price
    Number
Outstanding at
March 31,
2021
    Weighted Average
Remaining
Contractual Life
(Years)
    Weighted
Average
Exercise
Price
    Number
Exercisable at
March 31,
2021
    Weighted
Average
Exercise
Price
 
$ 0.50       2,000,000       5.86     $ 0.50       2,000,000     $ 0.50  
  1.00 – 1.93       2,810,000       5.37       1.40       2,366,666       1.45  
  2.00 – 2.80       2,740,000       2.52       2.17       2,740,000       2.17  
  4.76       30,000       3.01       4.76       30,000       4.76  
$ 0.50 – 4.76       7,580,000       4.46     $ 1.45       7,136,666     $ 1.47  

Stock option activities for the three months ended March 31, 2021 were as follows:


    Number of
Options
    Weighted
Average
Exercise Price
 
Outstanding at January 1, 2021     7,140,000     $ 1.48  
Granted     440,000       1.12  
Terminated / Exercised / Expired     -       -  
Outstanding at March 31, 2021     7,580,000     $ 1.45  
Options exercisable at March 31, 2021     7,136,666     $ 1.47  
Options expected to vest     443,334     $ 1.14  

The aggregate intrinsic value of both stock options outstanding and stock options exercisable at March 31, 2021 was $1,161,700.


The fair values of options granted during the three months ended March 31, 2021 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: volatility of 128.42%, risk-free rate of 0.36%, annual dividend yield of 0% and expected life of 5.00 years. The aggregate fair value of the options granted during the three months ended March 31, 2021 was $419,020.


The fair values of options granted during the three months ended March 31, 2020 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: volatility of 137.42% - 139.58%, risk-free rate of 1.39% - 1.67%, annual dividend yield of 0% and expected life of 5.00 – 10.00 years. The aggregate fair value of the options granted during the three months ended March 31, 2020 was $2,422,225.


For the three months ended March 31, 2021 and 2020, stock-based compensation expense associated with stock options granted amounted to $202,505 and $785,350, respectively, of which, $139,507 and $674,998 was recorded as compensation and related benefits, $43,443 and $103,818 was recorded as professional fees, and $19,555 and $6,534 was recorded as research and development expenses, respectively.


A summary of the status of the Company’s nonvested stock options granted as of March 31, 2021 and changes during the three months ended March 31, 2021 is presented below:


    Number of
Options
    Weighted
Average
Exercise
Price
 
Nonvested at January 1, 2021     218,334     $ 1.18  
Granted     440,000       1.12  
Vested     (215,000 )     (1.15 )
Nonvested at March 31, 2021     443,334     $ 1.14