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EQUITY
6 Months Ended
Mar. 31, 2023
EQUITY  
EQUITY

8. EQUITY 

 

Authorized Capital Stock

 

The Company’s authorized capital stock currently consists of 205,000,000 shares, consisting of 200,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share, of which 1,785,715 shares have been designated as series C convertible preferred stock, 1,016,014 shares have been designated as series D convertible preferred stock, and 500 shares have been designated as series F preferred stock.

 

Securities Subject to Price Adjustments 

 

If in the future,  the Company sells its common stock at a price below $0.25 per share, the conversion price of our outstanding shares of series C convertible preferred stock and series D convertible preferred stock would adjust below $0.25 per share pursuant to the documents governing such instruments. In addition, the conversion price of the convertible promissory notes referred to above and the exercise price of certain outstanding warrants to purchase 10,074,381 shares of common stock would adjust below $0.25 per share pursuant to the documents governing such instruments. Warrants totaling 4,439,707 would adjust below $1.20 per share and warrants totaling 4,424,425 would adjust below $2.40 per share, in each case pursuant to the documents governing such instruments.

 

Common Stock

 

Each share of common stock entitles its holder to one vote on each matter submitted to the stockholders for a vote, and no cumulative voting for directors is permitted. Stockholders do not have any preemptive rights to acquire additional securities issued by the Company.

 

Six Months Ended March 31, 2023

 

The Company issued 50,000 shares of common stock related to the exercise of warrants and received $12,500.

 

The Company issued 1,875 shares related to the exercise of stock option grants and received $2,343.

 

Warrants to Purchase Common Stock

 

Six Months Ended March 31, 2023

 

On December 7, 2022, the Company signed an Extension of Warrant Agreement with Clayton Struve, extending the exercise dates as follows:

 

Warrant No./Class

 

Issue Date

 

No. Warrant Shares

 

 

Exercise Price

 

 

Current Expiration Date

 

Amended Expiration Date

 

Clayton A. Struve Warrant

 

08-14-2017

 

 

1,440,000

 

 

$0.25

 

 

08-13-2024

 

08-13-2025

 

Clayton A. Struve Warrant

 

12-12-2017

 

 

1,200,000

 

 

$0.25

 

 

12-11-2024

 

12-11-2025

 

Clayton A. Struve Warrant

 

08-04-2016

 

 

1,785,715

 

 

$0.25

 

 

08-04-2024

 

08-04-2025

 

Clayton A. Struve Warrant

 

02-28-2018

 

 

1,344,000

 

 

$0.25

 

 

02-28-2024

 

02-28-2025

 

    

The Company recorded interest expense of $194,019 during the six months ended March 31, 2023 related to the extension of the warrants. The Company recorded the original value of warrants in equity and as such, the Company recorded the extension value as an expense with an offset to additional paid in capital.

 

On January 19, 2023, the Company signed an Extension of Warrant Agreements with Ronald P. Erickson and an entity controlled by Mr. Erickson, extending the exercise dates from January 30, 2023 to January 30, 2024.

A summary of the warrants outstanding as of March 31, 2023 were as follows:

  

 

 

March 31, 2023

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

Average

 

 

 

 

 

 

Exercise

 

 

 

Shares

 

 

Price

 

Outstanding at beginning of period

 

 

21,786,313

 

 

$1.029

 

Issued

 

 

-

 

 

 

-

 

Exercised

 

 

(50,000)

 

 

(0.250)

Forfeited

 

 

-

 

 

 

-

 

Expired

 

 

-

 

 

 

-

 

Outstanding at end of period

 

 

21,736,313

 

 

$1.031

 

Exercisable at end of period

 

 

21,736,313

 

 

 

 

 

    

The following table summarizes information about warrants outstanding and exercisable as of March 31, 2023:

 

 

 

 

March 31, 2023

 

 

 

 

Weighted

 

 

Weighted

 

 

 

 

 

Weighted

 

 

 

 

Average

 

 

Average

 

 

 

 

 

Average

 

Number of

 

 

Remaining

 

 

Exercise

 

 

Shares

 

 

Exercise

 

Warrants

 

 

Life ( In Years)

 

 

Price

 

 

Exercisable

 

 

Price

 

 

10,519,381

 

 

 

1.44

 

 

$0.250

 

 

 

10,519,381

 

 

$0.250

 

 

6,512,207

 

 

 

1.88

 

 

 1.20-1.85

 

 

 

6,512,207

 

 

 1.20-1.85

 

 

4,694,725

 

 

 

3.11

 

 

 2.00-3.00

 

 

 

4,694,725

 

 

 2.00-3.00

 

 

10,000

 

 

 

0.25

 

 

 

4.080

 

 

 

10,000

 

 

 

4.080

 

 

21,736,313

 

 

 

2.44

 

 

$1.031

 

 

 

21,736,313

 

 

$1.031

 

     

The significant weighted average assumptions relating to the valuation of the Company’s warrants for the three months ended  March 31, 2023 were as follows:

 

Assumptions

 

 

 

Dividend yield

 

 

0%

Expected life

 

3-5 years

 

Expected volatility

 

 

104%

Risk free interest rate

 

 

2.96%

 

There were vested warrants of 21,736,313 with an aggregate intrinsic value of $6,522,016.