Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.21.2
Equity
6 Months Ended
Jun. 30, 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 six months ended June 30, 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 six months ended June 30, 2021, the Company issued a total of 790,000 shares of its common stock for services rendered and to be rendered. These shares were valued at $894,300, 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 $398,518 for the six months ended June 30, 2021 and reduced accrued liabilities of $261,032 and recorded prepaid expense of $234,750 as of June 30, 2021 which will be amortized over the rest of corresponding service periods.

 

Common Shares Issued for Settlement of Accrued Professional Fees

 

In June 2021, the Company issued 167,355 shares of its common stock to settle accrued and unpaid professional fees of $202,500.

 

Options

 

The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at June 30, 2021:

 

Options Outstanding     Options Exercisable  
Range of
Exercise Price
    Number
Outstanding at
June 30,
2021
    Weighted Average Remaining
Contractual Life
(Years)
    Weighted
Average
Exercise Price
    Number
Exercisable at
June 30,
2021
    Weighted
Average
Exercise Price
 
$ 0.50       2,000,000       5.61     $ 0.50       2,000,000     $ 0.50  
  1.00 – 1.93       2,930,000       5.12       1.39       2,510,000       1.44  
  2.00 – 2.80       2,740,000       2.27       2.17       2,740,000       2.17  
  4.76       30,000       2.76       4.76       30,000       4.76  
$ 0.50 – 4.76       7,700,000       4.22     $ 1.45       7,280,000     $ 1.47  

 

Stock option activities for the six months ended June 30, 2021 were as follows:

 

    Number of Options     Weighted Average Exercise Price  
Outstanding at January 1, 2021     7,140,000     $ 1.48  
Granted     640,000       1.10  
Terminated / Exercised / Expired     (80,000 )     (1.00 )
Outstanding at June 30, 2021     7,700,000     $ 1.45  
Options exercisable at June 30, 2021     7,280,000     $ 1.47  
Options expected to vest     420,000     $ 1.08  

 

The aggregate intrinsic value of both stock options outstanding and stock options exercisable at June 30, 2021 was $965,000.

 

The fair values of options granted during the six months ended June 30, 2021 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: volatility of 123.27% - 128.42%, risk-free rate of 0.33% - 0.80%, annual dividend yield of 0% and expected life of 3.00 - 5.00 years. The aggregate fair value of the options granted during the six months ended June 30, 2021 was $575,078.

 

The fair values of options granted during the six months ended June 30, 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 0.25% - 1.67%, annual dividend yield of 0% and expected life of 3.00 – 10.00 years. The aggregate fair value of the options granted during the six months ended June 30, 2020 was $2,644,161.

 

For the three months ended June 30, 2021 and 2020, stock-based compensation expense associated with stock options granted amounted to $195,209 and $726,600, respectively, of which, $136,392 and $694,692 was recorded as compensation and related benefits, $39,545 and $25,374 was recorded as professional fees, and $19,272 and $6,534 was recorded as research and development expenses, respectively.

 

For the six months ended June 30, 2021 and 2020, stock-based compensation expense associated with stock options granted amounted to $397,714 and $1,511,950, respectively, of which, $275,899 and $1,369,690 was recorded as compensation and related benefits, $82,988 and $129,192 was recorded as professional fees, and $38,827 and $13,068 was recorded as research and development expenses, respectively.

 

A summary of the status of the Company’s nonvested stock options granted as of June 30, 2021 and changes during the six months ended June 30, 2021 is presented below:

 

    Number of Options     Weighted Average Exercise Price  
Nonvested at January 1, 2021     218,334     $ 1.18  
Granted     640,000       1.10  
Vested     (438,334 )     (1.15 )
Nonvested at June 30, 2021     420,000     $ 1.08