Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS??? EQUITY

v3.21.2
STOCKHOLDERS’ EQUITY
 6 Months Ended
Jun. 30, 2021
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 13 – STOCKHOLDERS’ EQUITY

 

Undesignated Preferred Stock

 

In February 2020, the Company filed a certificate of elimination to return all shares of formerly designated Series A convertible preferred stock to the status of authorized and unissued shares of undesignated preferred stock.

 

Common Stock

 

In February 2020, pursuant to the TIS Exchange Agreement discussed in Note 12 – Mezzanine Equity, the 4,908,333 shares of common stock exchanged for shares of Series B convertible preferred stock were treated as an increase to treasury stock of $14,725,000 ($3.00 per share), and then immediately cancelled, thereby reducing treasury stock to zero, with corresponding reductions to common stock of approximately $5,000 (the par value of the exchanged common shares) and additional paid-in capital of approximately $14,720,000.

 

In the six months ended June 30, 2021 and 2020, the Company granted 6,877 and 64,478 shares of common stock, respectively, to a current employee. The fair value of the shares of approximately $5,000 in 2021 and $11,000 in 2020 was charged to compensation expense. Of the shares granted in 2020, 34,171 shares with a fair value of approximately $5,000 were yet to be issued by June 30, 2020, and were reflected in Common Stock Subscribed But Not Issued on the balance sheet on that date.

 

In the six months ended June 30, 2021 and 2020, the Company issued 71,691 and 4,400,000 shares of common stock, respectively, to settle obligations of $51,000 and approximately $699,000, respectively. Based on the price of the Company’s common stock on the settlement dates, the Company incurred non-cash losses of approximately $2,500 in 2021 and $45,000 in 2020, which were reflected under Loss On Obligations Settled with Equity on the statement of operations of each period.

 

During the six months ended June 30, 2021 and 2020, the Company issued 11,413 and 3,236,857 shares of common stock, respectively, associated with previously issued subscriptions on common stock with a value of approximately $5,000 and $1,168,000, respectively.

 

As previously disclosed in Note 10 – Debt, the Company issued (i) an aggregate of 6,937,400 shares of common stock in 2021 upon the conversion of approximately $2,260,000 of principal and interest on promissory notes, (ii) 1,900,000 shares of common stock in June 2020 to extinguish $352,000 of principal on promissory notes, and (iii) 2,525,596 shares common stock in June 2020 upon the conversion of $460,050 of principal and interest on promissory notes.

 

As previously disclosed in Note 11 – Debentures Payable, the holder of the $21M Debentures converted (i) approximately $1.4 million of principal and interest in 2021 into 4,610,645 shares of common stock, and (ii) approximately $10.1 million of principal and interest in 2020 into 77,766,559 shares of common stock.

 

As further disclosed in Note 14 – Options, options to purchase 82,885 shares of common stock were exercised during the six months ended June 30, 2021. No options were exercises during the same period in 2020.

 

As further disclosed in Note 15 – Warrants, warrants to purchase 698,812 shares of common stock were exercised during the six months ended June 30, 2021. No warrants were exercises during the same period in 2020.

 

Common Stock Issuance Obligations

 

At June 30, 2020, the Company was obligated to issue 34,171 shares of common stock valued at approximately $5,000 in connection with a stock grant to a current employee. These share were issued in August 2020. The Company had no such issuance obligation of common stock at June 30, 2021.