The Company’s Amended and Restated Certificate of Incorporation was adopted on January 31, 2020 to authorize the issuance of two classes of stock to be designated, respectively, common stock and preferred stock. The total number of shares which the Company is authorized to issue is 37,000,000, each with a par value of $0.0001 per share. Of these shares, 35,000,000 shall be common stock and 2,000,000 shall be preferred stock.
(b) Common Stock
1. Dividends
Subject to the rights of holders of all classes of Company stock outstanding having rights that are senior to or equivalent to holders of common stock, the holders of the common stock are entitled to receive dividends when and as declared by the Board.
2. Liquidation
Subject to the rights of holders of all classes of stock outstanding having rights that are senior to or equivalent to holders of common stock as to liquidation, upon the liquidation, dissolution or winding up of the Company, the assets of the Company will be distributed to the holders of common stock.
3. Voting
The holders of common stock are entitled to one vote for each share of common stock held. There is no cumulative voting.
(c) Preferred Stock
Preferred stock may be issued from time to time by the Board in one or more series. There was no preferred stock issued or outstanding as of June 30, 2021 or December 31, 2020.
(d) Warrants
In conjunction with the IPO, the Company granted the underwriters 100,000 warrants to purchase shares of Company common stock at an exercise price of $7.50 per share, which was 125% of the initial public offering price. The warrants have a five-year term and are exercisable commencing January 29, 2021. During the six months ended June 30, 2021, 97,600 of the warrants were tendered to the Company by the holders pursuant to cashless exercises. As of June 30, 2021 and December 31, 2020, 2,400 and 100,000 of the warrants were outstanding, respectively. The Company accounts for the warrants as a component of stockholders’ equity.
(10) Share-Based Compensation
Effective upon the closing of the Company’s IPO on January 31, 2020, the Company’s 2019 Equity Incentive Plan (the “2019 Plan”) became effective, succeeding the Company’s previous plan (see Note 1). As of the effective date of the 2019 Plan, the previous plan had 352,282 options outstanding 2019 Plan and no new awards may be issued under the previous plan, although shares subject to grants which are cancelled or forfeited will again be available under the 2019 Plan. Effective June 1, 2021, the 2019 Plan was amended to increase the number of shares authorized to be issued from 1,000,000 shares to 2,000,000. As of June 30, 2021, 1,168,664 shares were available for future grants.
There were no options or stock awards issued during the six months ended June 30, 2021. Share-based compensation expense for the three months ended June 30, 2021 and 2020 was $7,992 and $1,111,272, respectively, and for the six months ended June 30, 2021 and 2020 was $31,970 and $1,111,172, respectively. As of June 30, 2021, there were 961,653 options outstanding, all of which were vested and exercisable. As of December 31, 2020, there were 1,111,466 options outstanding, of which 1,061,466 were vested and exercisable.