|9 Months Ended|
Sep. 30, 2021
Note 11 – Stockholders’ Equity
Upon formation, the total number of shares of all classes of stock that the Company is authorized to issue is seventy-five million () shares of common stock, par value $ per share.
During the nine months ended September 30, 2021, the Company issued 2,300,000 shares of common stock.
On September 2, 2021, the Company closed its initial public offering (“IPO”) under a registration statement effective August 30, 2021, in which it issued and sold 10.3 million from the IPO after deducting underwriting fee and offering expenses.shares of its Common Stock at a purchase price of $ per share. On September 2, 2021, the Company closed on the IPO’s overallotment option, selling an additional shares of Common Stock to the IPO’s underwriters at the public offering price of $ per share. The Company received net proceeds of approximately $
As of September 30, 2021 and December 31, 2020, the Company hadand shares of common stock issued and outstanding, respectively.
Shares to be issued for compensation
The Company entered into agreements with third party consultants for financing and management consulting. The Company has incurred consulting service fees not paid in cash amounting to $36,000 for the nine months ended September 30, 2021, which the Company intends to issue stock as compensation for services rendered. Expenses incurred but not yet paid in shares as of September 30, 2021 and December 31, 2020 amounted to $ and $ , respectively.
On August 30, 2021, the Company entered Representative Common Stock Purchase Warrant agreement (“Warrant Agreement”) with its placement agent, Boustead Securities LLC. (“Boustead”) for 161,000 shares and the exercise price is $6.25. Boustead exercised the warrants on September 7, 2021. The fair value of the warrants was $1,041,670 and $2,326,450 as of August 30 and September 7, 2021, respectively. For the nine months ended September 30, 2021, the Company change the fair value of warrant liability which amounted todifference $1,284,780.
These warrants were valued using a Black-Scholes pricing model with the following assumptions:
This Warrant Agreement allowed for cashless exercise option, which is calculated by the percentage difference between exercise and trading price, which resulted in a reduced number of warrants being exercisable. On September 7, 2021, Boustead exercised 121,149 shares with fair value of $1,776,044 upon cashless exercise option of warrants related to completion of the Company’s public offering. The shares will be issued six months after these warrants have been exercised. For the nine months ended September 30, 2021, the Company has a gain on settlement of derivative liability which amounted to $550,406. Shares to be issued as of September 30, 2021 and December 31, 2020 amounted to $1,776,044 and $0, respectively.
On January 4, 2021, each member of the Board was granted 15,000 options to purchase shares at $ per share.
On August 6, 2019, each member of the Board was granted 30,000 options to purchase shares at $ per share.
As of September 30, 2021, there were 315,000 options granted, options vested, options unvested, and outstanding stock options.
For the nine months ended September 30, 2021 and 2020, the Company’s stock option compensation expenses amounted to $and $ , respectively.
The fair value of the stock options listed above was determined using the Black-Scholes option pricing model with the following assumptions:
The following is a summary of options activity from December 31, 2020 to September 30, 2021:
The exercise price for options outstanding and exercisable at September 30, 2021:
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef