Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.21.2
Equity
9 Months Ended
Sep. 30, 2021
Stockholders' Equity Note [Abstract]  
EQUITY

NOTE 9 – 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 nine months ended September 30, 2021, Jefferies sold an aggregate of 1,884,036 shares of common stock at an average price of $1.34 per share to investors. The Company recorded net proceeds of $2,371,052, net of commission and other offering costs of $147,656.

 

Common Shares Issued for Services

 

During the nine months ended September 30, 2021, the Company issued a total of 1,205,679 shares of its common stock for services rendered and to be rendered. These shares were valued at $1,319,487, 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 $784,800 for the nine months ended September 30, 2021 and reduced accrued liabilities of $276,032 and recorded prepaid expense of $258,655 as of September 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 September 30, 2021:

 

Options Outstanding     Options Exercisable  
Range of
Exercise
Price
    Number
Outstanding at
September 30,
2021
    Weighted Average
Remaining
Contractual Life
(Years)
    Weighted
Average
Exercise
Price
    Number
Exercisable at
September 30,
2021
    Weighted
Average
Exercise
Price
 
$ 0.50       2,000,000       5.36     $ 0.50       2,000,000     $ 0.50  
  1.00 – 1.93       2,950,000       4.87       1.39       2,723,334       1.41  
  2.00 – 2.80       2,740,000       2.02       2.17       2,740,000       2.17  
  4.76       30,000       2.51       4.76       30,000       4.76  
$ 0.50 – 4.76       7,720,000       3.97     $ 1.45       7,493,334     $ 1.46  

 

Stock option activities for the nine months ended September 30, 2021 were as follows:

 

    Number of
Options
    Weighted Average
Exercise Price
 
Outstanding at January 1, 2021     7,140,000     $ 1.48  
Granted     660,000       1.10  
Expired     (80,000 )     (1.00 )
Outstanding at September 30, 2021     7,720,000     $ 1.45  
                 
Options exercisable at September 30, 2021     7,493,334     $ 1.46  
Options expected to vest     226,666     $ 1.09  

 

The aggregate intrinsic value of both stock options outstanding and stock options exercisable at September 30, 2021 was $776,000.

 

The fair values of options granted during the nine months ended September 30, 2021 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: volatility of 121.52% - 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 nine months ended September 30, 2021 was $594,401.

 

The fair values of options granted during the nine months ended September 30, 2020 were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: volatility of 134.32% - 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 nine months ended September 30, 2020 was $2,702,401.

 

For the three months ended September 30, 2021 and 2020, stock-based compensation expense associated with stock options granted amounted to $188,859 and $739,362, respectively, of which, $134,833 and $605,555 was recorded as compensation and related benefits, $37,596 and $110,970 was recorded as professional fees, and $16,430 and $22,837 was recorded as research and development expenses, respectively.

 

For the nine months ended September 30, 2021 and 2020, stock-based compensation expense associated with stock options granted amounted to $586,573 and $2,251,312, respectively, of which, $410,732 and $1,975,245 was recorded as compensation and related benefits, $120,584 and $240,162 was recorded as professional fees, and $55,257 and $35,905 was recorded as research and development expenses, respectively.

 

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

 

    Number of
Options
    Weighted Average
Exercise Price
 
Nonvested at January 1, 2021     218,334     $ 1.18  
Granted     660,000       1.10  
Vested     (651,668 )     (1.13 )
Nonvested at September 30, 2021     226,666     $ 1.09