Annual report pursuant to Section 13 and 15(d)

EQUITY

v3.22.1
EQUITY
12 Months Ended
Dec. 31, 2021
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]

NOTE 9 EQUITY

 

Common Stock At-The-Market Sales Program

 

On October 1, 2020, the Company entered into an At Market Issuance Sales Agreement (the “2020 At Market Agreement”) with a H.C. Wainwright &Co. (the “Sales Agent”) under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $3,489,499 from time to time through the Sales Agent. Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the U.S. Securities and Exchange Commission. The Company will pay to the Sales Agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2020 At Market Agreement.

 

Shares of common stock sold under the 2020 At Market Agreement were made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), and the prospectus included in the 2020 Registration Statement. In February 2021, 393,300 shares of Common Stock were issued and sold generating $3,382,352, excluding legal expenses. No shares remain eligible for sale under the 2020 At Market Agreement.

 

In April 2021, the Company entered into an At Market Issuance Sales Agreement (the “2021 At Market Agreement”) with the Sales Agent under which the Company may issue and sell shares of its common stock having an aggregate offering price of up to $3,308,842 from time to time through the Sales Agent. Sales of the Company’s common stock through the Sales Agent, if any, will be made by any method that is deemed an “at the market” offering as defined by the SEC. The Company will pay to the Sales Agent a commission rate equal to 3.0% of the gross proceeds from the sale of any shares of common stock sold through the Sales Agent under the 2021 At Market Agreement.

 

Shares of common stock sold under the 2021 At Market Agreement are made pursuant to the Company’s Registration Statement on Form S-3 (File No. 333-249238), filed with the Securities and Exchange Commission (the “SEC”) on October 2, 2020, as amended, and declared effective on October 23, 2020 (the “2020 Registration Statement”), the prospectus included in the 2020 Registration Statement and the related prospectus supplement dated February 26, 2021. In June 2021, 65,452 shares of Common Stock were issued and sold generating $722,116, excluding legal expenses. In July 2021, an additional 9,548 shares of Common Stock were issued and sold generating $76,436, net of legal expenses.

 

For the year ended December 31, 2021, the company issued and sold a total of 468,300 shares generating $4,180,904, net of legal expenses.

 

Stock Repurchase Program

 

On October 10, 2019, the Company’s Board of Directors authorized a new stock repurchase program, under which the Company may repurchase up to $2 million of its outstanding common stock. Under this new stock repurchase program, the Company may repurchase shares in accordance with all applicable securities laws and regulations, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations, as determined by the Company’s management. The repurchase program may be extended, suspended or discontinued at any time. The Company expects to finance the program from existing cash resources. On November 5, 2021, the Board of Directors voted to increase the authorized amount of the buyback from $2 million to $5 million. As of December 31, 2021, no repurchases have been made.

 

Dividends

 

On December 24, 2019, the Company announced the payment of a $0.50 special cash dividend per share of Common Stock payable on January 14, 2020 for an aggregate amount of $2,250,636, which was applied against paid in capital.

 

On December 10, 2020, the Company announced the payment of a $0.40 special cash dividend per share of Common Stock payable on December 28, 2020 for an aggregate amount of $1,800,509 which was applied against paid in capital.

 

On June 21, 2021, the Company announced the payment of a $0.60 special cash dividend per share of Common Stock to shareholders of record July 9, 2021. The dividend was paid on July 16, 2021 in the amount of $3,081,706.

 

Conversion of Convertible Debt

 

In February 2021, ISM converted the outstanding balance of the loan in the amount of $479,112 into 119,004 shares of the Company’s common stock (see Note 6).

 

In February 2021, Nellnube converted the outstanding balance of the loan in the amount of $191,645 into 47,602 shares of the Company’s common stock (see Note 6).

 

Stock Options

 

The Company adopted the 2019 Equity and Incentive Plan (the “2019 Plan”) to order provide long-term incentives for employees and non-employees to contribute to the growth of the Company and attain specific performance goals.

 

The fair value of each option awarded is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. Expected volatilities are based on historical volatility of Common Stock. The expected life of the options granted represents the period from date of grant to expiration (5 years). The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant. On March 29, 2021, 99,990 stock options were granted with an exercise price of $6.53 per option and have a five-year term with a two-year vesting period at 50% per annum. The fair value of stock options granted was $4.888 per option on the date of grant using the Black Scholes option-pricing model with the assumptions in the below table. On October 14, 2021, 71,630 shares were granted to directors and officers with an exercise price of $5.90 per option and have a five-year term and are vested at the date of grant. There were no stock options granted for the year ended December 31, 2020. The fair value of stock options granted was $4.14 per option on the date of grant using the Black Scholes option-pricing model with the assumptions in the below table.

 

Date of Grant

 

Dividend Yield

   

Risk-free Interest Rate

   

Volatility

   

Life

                             

March 21, 2021

    0.00

%

    0.89

%

    101.36

%

 

5 years

October 14, 2021

    0.00

%

    1.05

%

    91.51

%

 

5 years

 

A summary of the status of the Company’s stock option plans for the fiscal years ended December 31, 2021 and 2020 and changes during the years are presented below (in number of options):

 

   

Number

of Options

   

Average

Exercise Price

   

Average Remaining

Contractual Term

   

Aggregate

Intrinsic Value

 
                                 

Outstanding options at January 1, 2020

    26,280     $ 3.710    

0.70 years

    $ -0-  

Options granted

    -       -                  

Options canceled/forfeited

    (26,280

)

  $ 3.710                  
                                 

Outstanding options at December 31, 2020

    -     $ -             $ -0-  

Options granted

    171,620     $ 6.268                  

Options canceled/forfeited

    (6,000

)

  $ 6.530                  
                                 

Outstanding options at December 31, 2021

    165,620     $ 6.256    

4.48 years

    $ -0-  
                                 

Vested Options:

                               

December 31, 2021:

    71,630     $ 5.900    

4.79 years

    $ -0-  

December 31, 2020:

    -     $ -       -     $ -0-  

 

Total stock compensation recognized for the year ended December 31, 2021 and 2020 was $441,310 and $10,194, respectively

 

As of December 31, 2021 and 2020, the unamortized compensation expense for stock options was $228,726 and $0, respectively. The remaining amount will be recognized over the next 1.25 years.

 

Warrants

 

The following table summarizes the warrants transactions:

 

   

Warrants

Outstanding

   

Weighted Average

Exercise Price

 

Average Remaining

Contractual Term

                   

Balance, January 1, 2020

    191,543     $ 5.28  

0.3 years

Granted

    -     $ -    

Exercised

    -     $ -    

Canceled

    186,555     $ 5.31    

Outstanding and Exercisable December 31, 2020

    4,988     $ 4.01  

1.24 years

                   

Granted

    -     $ -    

Exercised

    -     $ -    

Canceled

    -     $ -    

Outstanding and Exercisable December 31, 2021

    4,988     $ 4.01  

0.24 years