Stockholders' Deficiency | 6. Stockholders’ Deficiency Preferred Stock The Company has authorized a total of 5,000,000 shares of preferred stock, par value $0.001 per share. As of September 30, 2019 and December 31, 2018, 1,250,000 shares were designated as 9% Cumulative Convertible Preferred Stock (non-voting, “9% Preferred Stock”); 37,500 shares were designated as Series B Convertible Preferred Stock (non-voting, “Series B Preferred Stock”); 205,000 shares were designated as Series A Junior Participating Preferred Stock (non-voting, “Series A Junior Participating Preferred Stock”); and 1,700 shares were designated as Series G 1.5% Convertible Preferred Stock. Accordingly, as of September 30, 2019 and December 31, 2018, 3,505,800 shares of preferred stock were undesignated and may be issued with such rights and powers as the Board of Directors may designate. Series B Preferred Stock outstanding as of September 30, 2019 and 2018 consisted of 37,500 shares issued in a May 1991 private placement. Each share of Series B Preferred Stock is convertible into approximately 0.00030 shares of common stock at an effective conversion price of $2,208.375 per share of common stock, which is subject to adjustment under certain circumstances. As of September 30, 2019 and December 31, 2018, the shares of Series B Preferred Stock outstanding are convertible into 11 shares of common stock. The Company may redeem the Series B Preferred Stock for $25,001, equivalent to $0.6667 per share, an amount equal to its liquidation preference, at any time upon 30 days prior notice. Common Stock There are 3,879,576 shares of the Company’s common stock outstanding as of September 30, 2019. The Company has reserved an aggregate of 7,401,292 for conversions of convertible debt which reserve includes contractual reserves totaling 7,383,482 shares of the Company’s common stock, which exceeds the actual conversion amounts under those contracts as of September 30, 2019 by 6,534,657 shares. In addition, The Company has reserved 6,303,652 shares of the Company’s common stock for exercises of common stock purchase options granted and warrants issued. There are 6,497 shares of the Company’s common stock reserved as Pier contingent shares. There are 4,490,578 shares reserved for future issuances under the Company’s 2014 and 2015 Plans (as hereafter defined). There are 43,452,954 shares of the Company’s common stock available for future issuances. Common Stock Warrants Information with respect to the issuance and exercise of common stock purchase warrants in connection with the Convertible Note Payable and the related warrant, and Notes Payable to Officers, is provided at Note 4. A summary of warrant activity for the nine months ended September 30, 2019 is presented below. Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years) Warrants outstanding and exerciable at December 31, 2018 1,783,229 $ 2.20393 3.06 Issued 302,372 0.95908 Expired (69,558 ) 2.65928 Warrants outstanding and exercisable at September 30, 2019 2,016,043 $ 1.99011 2.73 The exercise prices of common stock warrants outstanding and exercisable are as follows at September 30, 2019: Exercise Price Warrants (Shares) Warrants (Shares) Expiration Date $ 0.5000 150,000 150,000 August 19, 2024 $ 1.0000 916,217 916,217 September 20, 2022 $ 1.1800 42,372 42,372 May 17, 2022 $ 1.5000 190,000 190,000 December 30, 2023 $ 1.5620 130,284 130,284 December 31, 2021 $ 1.5750 238,814 238,814 April 30, 2023 $ 2.7500 8,000 8,000 September 20, 2022 $ 4.8750 108,594 108,594 September 30, 2020 $ 6.8348 145,758 145,758 September 30, 2020 $ 7.9300 86,004 86,004 February 28, 2021 2,016,043 2,016,043 Based on a fair market value of $0.45 per share on September 30, 2019, the intrinsic value of exercisable in-the-money common stock warrants as of September 30, 2019 was $7,500. A summary of warrant activity for the nine months ended September 30, 2018 is presented below. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Warrants outstanding and exercisable at December 31, 2017 1,464,415 $ 2.68146 3.73 Issued 238,814 1.57500 Warrants outstanding and exercisable at September 30, 2018 1,703,229 $ 2.52632 4.08 The exercise prices of common stock warrants outstanding and exercisable are as follows at September 30, 2018: Exercise Price Warrants Outstanding Warrants Exercisable Expiration Date $ 1.0000 916,217 916,217 September 20, 2022 $ 1.2870 41,002 41,002 April 17, 2019 $ 1.5620 130,284 130,284 December 31, 2021 $ 1,5750 238,814 238,814 April 30, 2023 $ 2.7500 8,000 8000 September 20, 2022 $ 4.8500 5,155 5,155 September 23, 2019 $ 4.8750 108,594 108,594 September 30, 2020 $ 5.0000 5,000 5,000 September 22, 2019 $ 5.1025 10,309 10,309 January 29, 2019 $ 6.5000 8,092 8,092 February 4, 2019 $ 6.8348 145,758 145,758 September 30, 2020 $ 7.9300 86,004 86,004 February 28, 2021 1,703,229 1,703,229 Based on a fair market value of $0.7171 per share on September 30, 2018, there were no exercisable in-the money common stock warrants as of September 30, 2018. Stock Options On March 18, 2014, the stockholders of the Company holding a majority of the votes to be cast on the issue approved the adoption of the Company’s 2014 Equity, Equity-Linked and Equity Derivative Incentive Plan (the “2014 Plan”), which had been previously adopted by the Board of Directors of the Company, subject to stockholder approval. The Plan permits the grant of options and restricted stock with respect to up to 325,025 shares of common stock, in addition to stock appreciation rights and phantom stock, to directors, officers, employees, consultants and other service providers of the Company. On June 30, 2015, the Board of Directors adopted the 2015 Stock and Stock Option Plan (the “2015 Plan”). The 2015 Plan initially provided for, among other things, the issuance of either or any combination of restricted shares of common stock and non- qualified stock options to purchase up to 461,538 shares of the Company’s common stock for periods up to ten years to management, members of the Board of Directors, consultants and advisors. The Company has not and does not intend to present the 2015 Plan to stockholders for approval. On August 18, 2015, the Board of Directors increased the number of shares that may be issued under the 2015 Plan to 769,231 shares of the Company’s common stock. On March 31, 2016, the Board of Directors further increased the number of shares that may be issued under the 2015 Plan to 1,538,461 shares of the Company’s common stock. On January 17, 2017, the Board of Directors further increased the number of shares that may be issued under the 2015 Plan to 3,038,461 shares of the Company’s common stock. On December 9, 2017, the Board of Directors further increased the number of shares that may be issued under the 2015 Plan to 6,985,260 shares of the Company’s common stock. On December 28, 2018, the Board of Directors further increased the number of shares that may be issued under the 2015 Plan to 8,985,260 shares of the Company’s common stock. Information with respect to the Black-Scholes variables used in connection with the evaluation of the fair value of stock- based compensation is provided at Note 3. There were no grants of common stock options or of stock for the nine month period ended September 30, 2019. A summary of stock option activity for the nine months ended September 30, 2019 is presented below. Number of Weighted Weighted Options outstanding and exercisable at December 31, 2018 4,344,994 $ 3.7634 7.38 Expired (57,385 ) (15.6139 ) Options outstanding and exercisable at September 30, 2019 4,287,609 $ 3.3798 5.23 The exercise prices of common stock options outstanding and exercisable were as follows at September 30, 2019: Exercise Price Options Outstanding Options Exercisable Expiration Date $ 0.7000 21,677 21,677 November 21, 2023 $ 1.1200 310,388 310,388 April 5, 2023 $ 1.2500 16,762 16,762 December 7, 2022 $ 1.3500 34,000 34,000 July 28, 2022 $ 1.4500 1,849,418 1,849,418 December 9, 2027 $ 1.4500 100,000 100,000 December 9, 2027 $ 2.0000 285,000 285,000 June 30, 2022 $ 2.0000 25,000 25,000 July 26, 2022 $ 3.9000 395,000 395,000 January 17, 2022 $ 4.5000 7,222 7,222 September 2, 2021 $ 5.6875 89,686 89,686 June 30, 2020 $ 5.7500 2,608 2,608 September 12, 2021 $ 6.4025 27,692 27,692 August 18, 2020 $ 6.4025 129,231 129,231 August 18, 2022 $ 6.4025 261,789 261,789 August 18, 2025 $ 6.8250 8,791 8,791 December 11, 2020 $ 7.3775 523,077 523,077 March 31, 2021 $ 8.1250 169,231 169,231 June 30, 2022 $ 13.9750 3,385 3,385 March 14, 2024 $ 15.4700 7,755 7,755 April 8, 2020 $ 15.9250 2,462 2,462 February 28, 2024 $ 16.6400 1,538 1,538 January 29, 2020 $ 19.5000 9,487 9,487 July 17, 2022 $ 19.5000 6,410 6,410 August 10, 2022 4,287,609 4,287,609 There was no deferred compensation expense for the outstanding stock options at September 30, 2019. Based on a fair market value of $0.45 per share on September 30, 2019, there was no intrinsic value of exercisable in-the-money common stock options as of September 30, 2019. A summary of stock option activity for the nine months ended September 30, 2018 is presented below. Number of Weighted Weighted Options outstanding and exercisable at December 31, 2017 3,996,167 $ 3.7634 6.30 Granted 327,150 1.1267 4.50 Options outstanding and exercisable at September 30, 2018 4,323,317 $ 3.5855 6.17 The exercise prices of common stock options outstanding and exercisable were as follows at September 30, 2018: Exercise Price Options Outstanding Options Exercisable Expiration Date $ 1.1200 310,388 310,388 April 5, 2023 $ 1.2500 16,762 16,762 December 7, 2022 $ 1.3500 34,000 34,000 July 28, 2022 $ 1.4500 1,849,418 1,849,418 December 9, 2027 $ 1.4500 100,000 100,000 December 9, 2027 $ 2.0000 285,000 285,000 June 30, 2022 $ 2.0000 25,000 25,000 July 26, 2022 $ 3.9000 395,000 395,000 January 17, 2022 $ 4.5000 7,222 7,222 September 2, 2021 $ 5.6875 89,686 89,686 June 30, 2020 $ 5.7500 2,608 2,608 September 12, 2021 $ 6.4025 27,692 27,692 August 18, 2020 $ 6.4025 129,231 129,231 August 18, 2022 $ 6.4025 261,789 261,789 August 18, 2025 $ 6.8250 8,791 8,791 December 11, 2020 $ 7.3775 523,077 523,077 March 31, 2021 $ 8.1250 169,231 169,231 June 30, 2022 $ 13.0000 7,385 7,385 March 13, 2019 $ 13.0000 3,846 3,846 April 14, 2019 $ 13.9750 3,385 3,385 March 14, 2024 $ 15.4700 7,755 7,755 April 8, 2020 $ 15.9250 2,462 2,462 February 28, 2024 $ 16.0500 46,154 46,154 July 17, 2019 $ 16.6400 1,538 1,538 January 29, 2020 $ 19.5000 9,487 9,487 July 17, 2022 $ 19.5000 6,410 6,410 August 10, 2022 4,323,317 4,323,317 Based on a fair market value of $0.7101 per share on September 30, 2018, there were no exercisable in-the-money common stock options as of September 30, 2018. Reserved and Unreserved Shares of Common Stock On January 17, 2017, the Board of Directors of the Company approved the adoption of an amendment of the Amended and Restated RespireRx Pharmaceuticals, Inc. 2015 Stock and Stock Option Plan (as amended, the “2015 Plan”). That amendment increases the shares issuable under the plan by 1,500,000, from 1,538,461 to 3,038,461. On December 9, 2017, the Board of Directors further amended the 2015 Plan to increase the number of shares that may be issued under the 2015 Plan to 6,985,260 shares of the Company’s common stock. On December 28, 2018, the Board of Directors further amended the 2015 Plan to increase the number of shares that may be issued under the 2015 Plan to 8,985,260 shares of the Company’s common stock. Other than the change in the number of shares available under the 2015 Plan, no other changes were made to the 2015 Plan by these amendments noted above. At September 30, 2019, the Company had 65,000,000 shares of common stock authorized and 3,879,576 shares of common stock issued and outstanding. The Company has reserved 11 shares of common stock for the conversion of the Series B Preferred Stock. The Company has reserved an aggregate of 7,401,292 for conversions of convertible debt which reserve includes contractual reserves totaling 7,383,482 shares of the Company’s common stock, which exceeds the actual conversion amounts under those contracts as of September 30, 2019 by 6,516,847 shares. In addition, The Company has reserved 6,303,652 shares of the Company’s common stock for exercises of common stock purchase options granted and warrants issued. There are 6,497 shares of the Company’s common stock reserved as Pier contingent shares. There are 4,490,578 shares reserved for future issuances under the Company’s 2014 and 2015 Plans (as hereafter defined). Accordingly, after taking into consideration the reserved shares, there are 42,918,394 shares of the Company’s common stock available for future issuances. The Company expects to satisfy its future common stock commitments through the issuance of authorized but unissued shares of common stock. |