| Stockholders’ Equity | Note
8 – Stockholders’ Equity The
Company has authorized 100,000,000 shares of capital stock, which consists of 90,000,000
shares of Common Stock, $ 0.000001
par value per share, and 10,000,000
shares of preferred stock, $ 0.000001
par value per share. Series
B Preferred Stock Pursuant
to the Exchange Agreement (see Note 5), the Holder agreed to exchange the Prior Notes for 230,375
shares of Series B convertible preferred
stock, par value $ 0.000001
per share (the “Series B Preferred
Stock”), and a warrant (the “Exchange Warrant”). The Exchange Warrant grants the Holder the right to purchase 93,750
shares of Common Stock at an exercise
price of $ 3.00 ,
subject to adjustment as set forth therein. The Exchange Warrant is exercisable in full at any time within five years of the date of
issuance. Additional warrants on substantially identical terms as the Exchange Warrant will be issued by the Company to the Holder monthly
until such time as the Series B Preferred Stock is redeemed in full, upon which a final warrant will be issued. Shares
of the Series B Preferred Stock is convertible at any time at the option of the holder thereof into shares of Common Stock at an initial
conversion price of $ 3.00
per share, subject to adjustment as set
forth in the Certificate of Designation. The
Series B Preferred Stock is subject to mandatory redemption in full at a redemption price initially equal to $ 10.00
per share, within 15 business days after
the date on which the Company has completed an equity financing resulting in total proceeds of at least $ 10
million. At any time after January 12,
2022, provided that the Company has paid in full all obligations outstanding under the Term Loan Agreement, the holders of a majority
of the outstanding shares of Series B Preferred Stock shall be entitled to require the Company to redeem the Preferred Stock at the then
applicable redemption price, and any such redemption of Series B Preferred Stock shall be prior and superior to the redemption of any
and all other equity securities of the Company duly tendered for redemption. If,
at any time while the Series B Preferred Stock is outstanding, the Company completes any single public offering or private placement
of its equity, equity-linked or debt securities (each, a “Future Transaction”), the holders of the Series B Preferred Stock
may, in their sole discretion, elect to apply all, or any portion, of the then outstanding Preferred Stock and any accrued but unpaid
dividends, as purchase consideration for such Future Transaction. The conversion price applicable to such conversion shall equal seventy
percent (70%) of the cash purchase price paid per share, unit or other security denomination for the securities of the Company issued
to other investors in the Future Transaction. Common
Stock During
the nine months ended September 30, 2021, the Company:
● issued
100,0000
shares of Common Stock to a member
of the Company’s Board of Directors, in a negotiated transaction for $ 0.50
per share, or aggregate cash consideration
of $ 50,000 ;
● issued
295,000
shares of Common Stock for the exercise
of 321,875
stock options for cash consideration
of $ 92,878 ;
● issued
1,273,050
shares of Common Stock for the cashless
exercise of 1,348,525
stock options;
● issued
600
shares of Common Stock to an investor
in connection with a prior note payable agreement;
● issued
1,000,000
shares of Common Stock in connection
with the conversion of a convertible note payable for $ 500,000 ;
● issued
an aggregate of 256,250
shares of Common Stock in connection
with legal settlements. The shares were valued at $ 1,145,768
which was based on the market price
of the Common Stock on the grant date; and
● issued
825,000
shares to Acuitas Group Holdings,
LLC, (“Acuitas”) which is now the Company’s largest shareholder, in connection with a settlement agreement between
Acuitas and X, LLC, a company owned by the Company’s former chief executive officer. The board of directors deemed it was in
the best interest of the Company to issue the shares to Acuitas. The value of the shares was $ 3,240,600
which is based on the market price
of the Company’s Common Stock at the grant date. The $ 3,240,600
was expensed as financing costs as
the dispute underlying the settlement agreement related to an anti-dilution of a prior investment in the Company by Acuitas. Stock
Options The
following is a summary of stock option activity: Summary
of Stock Option Activity
Weighted
Weighted Average
Average Remaining Aggregate
Options Exercise Contractual Intrinsic
Outstanding Price Life Value
Outstanding,
December 31, 2020 2,540,000 $ 0.22 4.52 $ 1,074,245
Granted 290,000 0.84
Forfeited (401,475 ) 0.22
Exercised (1,670,400 ) 0.230
Outstanding,
September 30, 2021 758,125 $ 0.42 3.93 $ 514,928
Exercisable,
September 30, 2021 413,875 $ 0.56 3.99 $ 262,473 EVmo,
Inc. Notes
to Condensed Consolidated Financial Statements For
the Nine Months Ended September 30, 2021 and 2020 (unaudited) The
exercise price for options outstanding and exercisable at September 30, 2021: Schedule
of Options Outstanding by Exercise Price Range
Outstanding Exercisable
Number
of Exercise Number
of Exercise
Options Price Options Price
20,000 $ 0.210 20,000 $ 0.210
528,125 0.215 252,625 0.215
15,000 0.220 2,500 0.220
155,000 0.530 98,750 0.530
20,000 2.120 20,000 2.120
20,000 3.800 20,000 3.800
758,125 413,875 Warrants The
following is a summary of warrant activity: Summary
of Warrant Activity
Weighted
Weighted Average
Average Remaining Aggregate
Warrants Exercise Contractual Intrinsic
Outstanding Price Life Value
Outstanding,
December 31, 2020 1,631,250 $ 4.08 2.38 $ -
Granted 1,106,250 2.64
Forfeited -
Exercised -
Outstanding,
September 30, 2021 2,737,500 $ 3.50 2.89 $ -
Exercisable,
September 30, 2021 2,737,500 $ 3.50 2.89 $ - The
exercise price for warrants outstanding at September 30, 2021: Schedule
of Warrants Outstanding by Exercise Price Range
Outstanding
and Exercisable
Number
of Exercise
Warrants Price
450,000 $ 2.10
656,250 3.00
1,500,000 4.00
131,250 5.00
2,737,500 In
connection with a convertible note discussed in Note 6, the Company has issued an aggregate of 468,750
warrants. The fair value of the warrants
was determined to be $ 961,106 ,
using a Black-Scholes model, and has been recorded as financing costs in the accompanying statements of operations for the nine months
ended September 30, 2021. The Company used the following assumptions in determining the fair value: Schedule
of Stock Options Value Assumptions
Risk-free
interest rate 0.76
–
0.87 %
Expected
life of the options 5
years
Expected
volatility 180 %- 190 %
Expected
dividend yield 0 % EVmo,
Inc. Notes
to Condensed Consolidated Financial Statements For
the Nine Months Ended September 30, 2021 and 2020 (unaudited) | Note
7 – Stockholders’ Equity The
Company authorized 100,000,000 shares
of capital stock with consists of 90,000,000 shares of common stock, $ 0.000001
par value per share and 10,000,000
shares of preferred stock, $ 0.000001
par value per share. Common
Stock During
the year ended December 31, 2020, the Company sold an aggregate of 2,553,571
shares of common stock to three investors for
cash proceeds of $ 275,000 ,
of which 125,000
shares and $ 25,000
was to a member of the Company’s board
of directors. During
the years ended December 31, 2019, the Company:
● issued
84,300
shares of common stock to vendors in satisfaction
of $ 421,500
of accounts payable and accrued expenses.
The 84,300
shares were valued at $ 674,000 ;
therefore the Company took a charge to earnings of $ 252,900
related to the settlement of debt during
the years ended December 31, 2019;
● issued
2,625,000
shares of common
shares in connection with its initial public offering at $ 4.00
per share. Total
gross proceeds from the offering were $ 10,500,000 ,
before deducting underwriting discounts and commissions and other offering expenses. Stock
Options The
following is a summary of stock option activity: Summary
of Stock Option Activity
Weighted
Weighted Average
Average Remaining Aggregate
Options Exercise Contractual Intrinsic
Outstanding Price Life Value
Outstanding,
December 31, 2018 300,000 $ 8.00 2.00 $ -
Granted - $
Forfeited -
Exercised -
Outstanding, December
31, 2019 300,000 $ 8.00 1.00 $ -
Granted 4,040,000 1.62
Forfeited (1,800,000 ) 4.67
Exercised -
Outstanding,
December 31, 2020 2,540,000 $ 0.22 4.52 $ 1,074,245
Exercisable,
December 31, 2020 1,162,875 $ 0.22 4.52 $ 491,821 The
exercise price for options outstanding and exercisable at December 31, 2020: Schedule
of Options Outstanding by Exercise Price Range
Outstanding Exercisable
Number
of Exercise Number
of Exercise
Options Price Options Price
2,505,000 $ 0.215 1,147,875 $ 0.215
35,000 0.220 15,000 0.220
2,540,000 1,162,875 For
options granted during the year ended December 31, 2020 where the exercise price equaled the stock price at the date of the grant, the
weighted-average fair value of such options was $ 0.211
and the weighted-average exercise price of such
options was $ 0.215 .
For options granted during the year ended December 31, 2020 where the exercise price was greater than the stock price at the date of
the grant, the weighted-average fair value of such options was $ 1.11
and the weighted-average exercise price of such
options was $ 4.00 .
No options were granted during the year ended December 31, 2020 where the exercise price was less than the stock price at the date of
grant. The
fair value of the stock options is being amortized to stock option expense over the vesting period. The Company recorded stock option
expense of $ 739,973 and
$ 0 during
the years ended December 31, 2020 and 2019, respectively. At December 31, 2020, the unamortized stock option expense was $ 253,830 . The
assumptions used during the year ended December 31, 2020 in calculating the fair value of options granted using the Black-Scholes option-pricing
model for options granted are as follows: Schedule
of Assumptions Used
Risk-free
interest rate 0.28 %
- 1.59 %
Expected
life of the options 5.0
years
Expected
volatility 195 %- 212 %
Expected
dividend yield 0 % The
following is a summary of warrant activity: Summary
of Warrant Activity
Weighted
Weighted Average
Average Remaining Aggregate
Warrants Exercise Contractual Intrinsic
Outstanding Price Life Value
Outstanding,
December 31, 2018 1,500,000 $ 4.00 4.44 $ 6,000,000
Granted 131,250 5.00
Forfeited -
Exercised -
Outstanding, December
31, 2019 1,631,250 $ 4.08 3.38 $ -
Granted -
Forfeited -
Exercised -
Outstanding,
December 31, 2020 1,631,250 $ 4.08 2.38 $ -
Exercisable,
December 31, 2020 1,631,250 $ 4.08 2.38 $ - The
exercise price for warrants outstanding at December 31, 2020: Schedule
of Warrants Outstanding by Exercise Price Range
Outstanding
and Exerciseable
Number
of Exercise
Warrants Price
1,500,000 $ 4.00
131,250 5.00
1,631,250 In
connection with the Company’s initial public offering, the Company issued the underwriters a total of 131,250
warrants to purchase shares of the Company’s
common stock for $ 5.00
per share. The warrants expire in November
2024 . |
