Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS??? EQUITY

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STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 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 the 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 three months ended March 31, 2021, the Company granted 6,877 shares of common stock to a current employee. The fair value of the shares of approximately $5,000 was charged to employee compensation. These granted shares were yet to be issued by the end of the quarter, and were reflected in Common Stock Subscribed But Not Issued on the related balance sheet.

 

In 2020, the Company granted 109,210 shares of common stock to a current employee. The fair value of the shares of approximately $21,000 was charged to employee compensation during the period. Of these granted shares, 11,413 were yet to be issued at December 31, 2020 and were reflected in Common Stock Subscribed But Not Issued on the related balance sheet.

 

In February 2021, the Company issued 42,857 shares of common stock to settle a $30,000 obligation. Based on the price of the Company’s common stock on the date of issuance, the Company incurred a non-cash loss of approximately $1,300 which was reflected under Loss On Debt Settlements on the statement of operations. No stock was issued to settle obligations during the same period in 2020.

 

During the three months ended March 31, 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) 3,365,972 shares of common stock in 2021 upon the conversion of approximately $1,010,000 of principal and interest on the $8.8M Note, (ii) 1,900,000 shares of common stock in June 2020 upon the conversion of $352,000 of principal on the $11.5M Note, and (iii) 2,525,596 shares common stock in June 2020 upon the conversion of $460,050 of principal and interest on the $900k Note.

 

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 15 – Warrants, warrants to purchase 50,000 shares of common stock were exercised during the three months ended March 31, 2021.

 

Common Stock Issuance Obligations

 

At March 31, 2021 and 2020, the Company was obligated to issue 6,877 and 30,302 shares of common stock, respectively, valued at approximately $5,000 in both periods, in connection with a stock grant to a current employee. The 2021 obligation was issued April 2021; the 2020 obligation was issued in May 2020.