NOTE 14 – STOCKHOLDERS’ EQUITY

Stockholder Resolutions

At the Company’s 2021 annual meeting of stockholders in September 2021 (the “Annual Meeting”), stockholders approved an amendment to the Company’s certificate of incorporation increasing the number of authorized shares of common stock from 500,000,000 to 700,000,000.

Also at the Annual Meeting, stockholders approved an amendment to the Company’s Amended and Restated 2018 Stock Award and Incentive Plan (the “Plan”) increasing the aggregate number shares reserved for issuance under the Plan from 40,000,000 to 70,000,000.

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 13 – 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 nine months ended September 30, 2021 and 2020, the Company granted 9,081 and 97,797 shares of common stock, respectively, to an employee. The fair value of these shares of approximately $7,000 in 2021 and $11,000 in 2020 was charged to compensation expense. Of these shares granted, 2,204 shares and 33,319 shares, with fair values of approximately $2,000 and $5,000, respectively, were yet to be issued at September 30, 2021 and 2020, respectively, and were included in Common Stock Subscribed But Not Issued on the balance sheets at those dates.

In the nine months ended September 30, 2021, the Company granted 245,217 shares of restricted common stock to three employees. The fair value of these restricted shares of approximately $226,000 was charged to compensation expense. Of these restricted shares granted, 100,000 shares, with a fair value of approximately $93,000, were yet to be issued at September 30, 2021, and were included in Common Stock Subscribed But Not Issued on the balance sheet at such date. No shares of restricted common stock were issued in 2020.

In the nine months ended September 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 for each period.

In the nine months ended September 30, 2021, the Company issued (i) 300,000 shares of common stock valued at $283,200 to pay for consulting fees, and (ii) 109,308 shares valued at approximately $92,000 to pay for licensing fees. No such fees were paid with common stock in 2020.

In July 2021, 79,815 shares of common stock were returned to the Company from the adjustment of a previously converted debenture. No common stock was returned in 2020.

During the nine months ended September 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 11 – Promissory Notes, the Company issued (i) an aggregate of 10,042,125 shares of common stock in 2021 upon the conversion of approximately $3,346,000 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 12 – 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 – Options, the Company issued 178,885 shares of common stock during the nine months ended September 30, 2021 from the exercise of stock options. No options were exercised during the same period in 2020.

As further disclosed in Note 16 – Warrants, the Company issued 980,062 shares of common stock during the nine months ended September 30, 2021 from the exercise of warrants. No warrants were exercised during the same period in 2020.

Common Stock Issuance Obligations

At September 30, 2021, the Company was obligated to issue (i) 102,204 shares of common stock valued at approximately $95,000 in connection with a stock grant and restricted stock grants to current employees, and (ii) 100,000 shares of common stock valued at approximately $94,000 in connection with the purchase of the remaining 30% interest of MediTaurus as discussed in Note 3 – Acquisitions. These shares were issued in November 2021. At September 30, 2020, the Company was obligated to issue 33,319 shares of common stock valued at approximately $5,000 in connection with a stock grant to a current employee. These shares were issued in October 2020.