Quarterly report pursuant to Section 13 or 15(d)

SHARE-BASED PAYMENTS

v3.21.2
SHARE-BASED PAYMENTS
9 Months Ended
Sep. 30, 2021
SHARE-BASED PAYMENTS  
SHARE-BASED PAYMENTS

NOTE 10: SHARE-BASED PAYMENTS

Common Stock Warrants

During the nine months ended September 30, 2020, the Company granted 374,048 common stock warrants to the venture debt lender with an exercise price of $2.50 per share. The warrants were valued at $139,572 using the below range of inputs using the Black-Scholes model.

During the Company’s Series A-3 Preferred Stock raise, the Company granted 2,603 common stock warrants at an exercise price of $8.28 per share to a funding platform in the nine months ended September 30, 2020.

    

Nine Months Ended

 

September 30, 

 

2020

 

Risk Free Interest Rate

 

1.54 - 1.59

%

Expected Dividend Yield

 

0.00

%

Expected Volatility

 

58.0

%

Expected Life (years)

 

10.00

In connection with the IPO, the Company issued 2,409,639 warrants and an additional 361,445 warrants to purchase common stock per the over-allotment option. Each warrant will have an exercise price of $4.57 per share (equal to 110% of the offering price of the common stock), will be exercisable upon issuance and will expire five years from issuance.

On May 13, 2021, pursuant to the IPO Underwriting Agreement, the Company issued warrants to the underwriters to purchase up to an aggregate of 120,482 shares of common stock with an exercise price of $5.19 per share. The warrants may be exercised beginning on November 13, 2021 and will expire five years from issuance.

In connection with the Company’s April 2021 note financing, the Company issued warrants to the lender to purchase up to 120,482 shares of common stock. The warrants have an exercise price of $4.15 per share and are exercisable immediately after issuance.

In May 2021, an aggregate of 31,881 warrants were exercised for shares of common stock for proceeds of $145,696. In July 2021, warrant holders exercised 355,000 warrants for proceeds of $1,622,350.

A summary of information related to common stock warrants for the nine months ended September 30, 2021 is as follows:

    

Common

    

Weighted

Stock

Average

Warrants

Exercise Price

Outstanding - December 31, 2020

 

914,539

$

2.66

Granted

 

3,012,048

 

4.58

Conversion of preferred stock warrants upon IPO

51,642

7.66

Exercised

 

(386,881)

 

4.57

Forfeited

 

 

Outstanding - September 30, 2021

 

3,591,348

$

4.13

Exercisable at September 30, 2021

 

3,470,866

$

4.10

Preferred Stock Warrants

A summary of information related to preferred stock warrants for the nine months ended September 30, 2021 is as follows:

    

Preferred

    

Weighted

Stock

Average

Warrants

Exercise Price

Outstanding - December 31, 2020

 

806,903

$

0.49

Converted to common stock warrants upon IPO

(806,903)

0.49

Exercised

 

 

Forfeited

 

 

Outstanding - September 30, 2021

 

$

Exercisable at September 30, 2021

 

$

Upon the IPO, all outstanding preferred stock warrants converted into common stock warrants at a ratio of 15.625:1.

Stock Options

2020 Incentive Stock Plan

The Company has adopted a 2020 Omnibus Incentive Stock Plan (the “2020 Plan”). An aggregate of 3,300,000 shares of the Company’s common stock is reserved for issuance and available for awards under the 2020 Plan, including incentive stock options granted under the 2020 Plan. The 2020 Plan administrator may grant awards to any employee, director, consultant or other person providing services to us or our affiliates. Upon the IPO, 2,712,000 options were granted to executives and directors at an exercise price of $4.15 per share. As of September 30, 2021, 588,000 options were available for future issuance.

A summary of information related to stock options under our 2013 and 2020 Stock Plan for the nine months ended September 30, 2021 is as follows:

    

    

Weighted

Average

Options

Exercise Price

Outstanding - December 31, 2020

 

1,163,103

$

2.34

Granted

 

2,712,000

 

4.15

Exercised

 

 

Forfeited

 

 

Outstanding - September 30, 2021

 

3,875,103

$

3.62

Exercisable at September 30, 2021

 

3,084,831

$

3.61

Weighted average duration (years) to expiration of outstanding options at September 30, 2021

 

8.27

 

  

Stock-based compensation expense of $134,113 and $5,779 was recognized for the three months ended September 30, 2021 and 2020, and $4,155,641 and $105,643 was recognized for the nine months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021, $537,550 was recorded to sales and marketing expense, and all other stock compensation was included in general and administrative expense in the condensed consolidated statements of operations. Total unrecognized compensation cost related to non-vested stock option awards as of September 30, 2021 amounted to $1,164,223 and will be recognized over a weighted average period of 2.48 years.