| Equity | 11.
Equity Preferred
Stock As
of September 30, 2021, the Company was authorized to issue 20 million
shares of preferred stock with a par value of $0 .001 per
share, of which 600,000 shares
had been designated as Series A convertible and 99,000 shares
had been issued and are outstanding. In the event
of any liquidation, dissolution or winding up of the Company, the holders of preferred stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets of the Company to the holders of common stock, an amount equal to $10
for each share of preferred stock, plus all unpaid
dividends that have been accrued, accumulated or declared. The Company may redeem the preferred stock from the holders at any time following
the second anniversary of the closing of the original purchase of the preferred stock. The Company shall also have the right to convert
any or all of the preferred stock into common stock at a 20% discount to the market price of common shares with written approval of the
stockholder. Holders of preferred
stock are entitled to receive preferential cumulative dividends, only if declared by the board of directors, at a rate of 7% per annum
per share of the liquidation preference amount of $10 per share. During the nine months ended September 30, 2021 and 2020, the Board
of Directors has declared and paid dividends on the preferred stock of $ 51,975 and $ 33,250 respectively. During the three months ended September
30, 2021 and 2020, the Board of Directors has declared and paid dividends on the preferred stock of $ 17,325 and $ 12,500 respectively. As of September 30, 2021 and December
31, 2020, preferred dividends are in arrears by $ 17,325 and $ 17,325 respectively. December 31,
2019 dividends in arrears were declared and paid in January 2020. March 31, 2020 dividends in arrears were declared and paid in April
2020. June 30, 2020 dividends in arrears were declared and paid in July 2020. September 30, 2020 dividends in arrears were declared and
paid in October 2020. December 31, 2020 dividends in arrears were declared and paid in January 2021. March 31, 2021 dividends in arrears
were declared and paid in April 2021. June 30, 2021 dividends in arrears were declared and paid in July 2021. September 30, 2021 dividends in arrears were declared and paid
in October 2021. Common
Stock As
of both September 30, 2021 and December 31, 2020, the Company was authorized to issue 100 million shares of common stock with a par value
of $0 .001 per
share, of which 2,905,016 shares
were issued and outstanding.
On
March 30, 2020, the Company repurchased and retired 600,000 480,000 8 Stock
Options In 2019, the Company’s
Board of Directors approved the creation of the 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for
the issuance of incentive stock options to designated employees, certain key advisors and non-employee members of the Board of Directors
with the opportunity to receive grant awards to acquire, in the aggregate, up to 300,000 shares of the Corporation’s common stock. A
summary of information regarding the stock options outstanding is as follows:
Schedule of stock options outstanding
Number
of Shares Weighted
Average Exercise Price Weighted
Average Remaining Contractual Term
Outstanding at December 31, 2020 187,400 $ 0.80
Issued — —
Exercised — —
Outstanding
at September 30, 2021 187,400 $ 0.80 10.4
Exercisable
at September 30, 2021 93,700 The above
outstanding options were granted on March 1, 2020, to designated Officers and employees. Half of the options vested on March 1, 2021
and the other half will vest on March 1, 2022. During the nine months ended September 30, 2021 and 2020, the Company recognized $ 26,002 and $ 20,224 respectively, of stock option expense. During the three months ended September 30, 2021 and
2020, the Company recognized $ 8,668 and $ 8,668 respectively, of stock option expense.
Stock
Warrants On
April 1, 2020, the Company issued 800,000
of previously authorized warrants for the purchase
of common stock that are split into two classes of warrants. The 400,000
Class W4 warrants are issued at $ .001 Par Value and exercisable at a strike price of
$ 4 for a period of five ( 5 years. The 400,000
Class W12 warrants are issued at $ .001 Par Value and are exercisable at a strike price
of $ 12 for
a period of five ( 5 175,000 .001 and
exercisable at a strike price of $ 4 5
Schedule of stock warrants
Number
of Shares Weighted
Average Exercise Price Weighted
Average Remaining Contractual Term
Outstanding at December 31, 2020 800,000 $ 8.00
Issued 175,000 4.00
Exercised — —
Outstanding
at September 30, 2021 975,000 $ 7.28 3.71
years
Exercisable
at September 30, 2021 975,000 During the nine
months ended September 30, 2021 and 2020, the Company recognized $ 9,275 and $ 27,200 respectively, of stock warrant expense. During the three months ended September 30, 2021
and 2020, the Company recognized $ 0 and
$ 0 respectively,
of stock warrant expense. |
