Note 6 - Stockholders’ Equity

Authorized Capital

The Company has authorized the issuance and sale of up to 185,000,000 shares of stock, consisting of 180,000,000 shares of common stock having a par value of $0.001 and 5,000,000 shares of Preferred Stock having a par value of $0.001 per share. As of March 31, 2021 and 2020, there were no shares of Preferred Stock outstanding and there were no declared but unpaid dividends or undeclared dividend arrearages on any shares of the Company’s capital stock.

Registration of Shares

During the three months ended March 31, 2021, the Company filed a registration statement for the shares issued in its private offering (the “Private Offering”) with certain promissory note holders in December 2020. The Company converted outstanding amounts under its 8% Unsecured Promissory Notes (the “2018 Notes”) due in 2021 and 2022 in the Private Offering totaling an aggregate of $3,847,018 in principal and interest and issued 3,154,115 units at a price of $1.22 per unit. Each unit consists of one share of the Company’s common stock and one warrant to purchase 0.75 of one share of the Company’s common stock at an exercise price of $1.44 per share. Each warrant can be exercised at any time on or after June 18, 2021 and has an expiration date of June 18, 2026. Two officers of the Company participated in the Private Offering and converted an aggregate of approximately $131,000 in principal and interest into 107,000 units.

Stock Options

The Company has an incentive stock plan, the Amended and Restated 2011 Equity Incentive Plan (the “2011 Plan”), and has granted stock options to employees, non-employee directors and consultants from the 2011 Plan. Options granted under the 2011 Plan may be Incentive Stock Options or Non-statutory Stock Options, as determined by the Administrator at the time of grant. As of March 31, 2021, there were 5,169,561 shares remaining available for issuance under the 2011 Plan.

During the three months ended March 31, 2021, stock options to purchase 623,901 shares of common stock were exercised for cash proceeds of $958,847.

During the three months ended March 31, 2021, stock options to purchase 40,452 shares of common stock expired, were cancelled and returned to the option pool for future issuance.

The Company recorded stock-based compensation as follows:

The following table represents stock option activity for the three months ended March 31, 2021:

The following table summarizes information on stock options outstanding and exercisable as of March 31, 2021:

Warrants

During the three months ended March 31, 2021, the Company granted warrants to two service providers to purchase a total of 60,000 shares of its common stock with an exercise price of $1.38 per share. Fifty thousand of these warrants were valued using the Black-Scholes option pricing model and the corresponding expense will be recognized over the vesting period of one year. Ten thousand of these warrants are performance based and will be valued and expensed at the time the performance conditions are met. The warrants have terms that range from two to three years with vesting over a one-year period.

During the three months ended March 31, 2021, warrants to purchase 46,900 shares of common stock were exercised for cash proceeds of $67,536.

During the three months ended March 31, 2021, warrants to purchase 17,000 shares of common stock expired and were cancelled.

The following table summarizes information on warrants outstanding as of March 31, 2021.