Stockholders’ Equity

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Stockholders’ Equity

8. Stockholders’ Equity

As part of an employment agreement, the Company granted an executive a one-time equity award of 1,000,000 restricted shares of the Company’s common stock valued at $3,580,000, fair value, which award shall vest in its entirety on August 18, 2024. The fair market value of the restricted stock award was determined based on the closing price of the Company’s common stock on the grant date and is being amortized on a straight-line basis to general and administrative expense as stock based compensation over the one year vesting term. The Company recorded stock based compensation expense of $1,320,500 for the year ended December 31, 2023. To the extent the Company has not established an employee equity compensation plan on or prior to August 18, 2024, the restricted shares may be converted, at the election of the executive, in full or in part, into cash compensation, at a rate of $3.58 per share of common stock, which was the fair market value of the common stock on October 10, 2023, which was the date the Board of Directors approved the Grant.. Since the issuance of the restricted stock can be settled in cash, the monthly amortization of the $3,580,000 fair value of the restricted stock grant is recorded as stock compensation payable. If the restricted stock grant is settled in shares of the Company’s common stock based on an established employee equity compensation plan or the option to settle in cash is no longer valid, then the stock compensation payable will be reclassified to additional paid in capital.  

On September 11, 2023 our Company entered into a stock purchase agreement in connection with a private placement for total gross proceeds of $5.0 million. The stock purchase agreement provided for the issuance of an aggregate of 1,250,000 shares of our Company’s common stock to an investor at a purchase price of $4.00 per share. In addition, as consideration for general advisory services until the third anniversary, the Company agreed to issue an aggregate total of 65,790 shares of common stock with a total fair market value on date of grant of $263,160, which shares shall be issued as follows: one-third (21,930 shares) on September 11, 2024, one-third (21,930 shares) on September 11, 2025 and one-third (21,930 shares) on September 11, 2026. The Company expenses the value of the stock grant, which is determined to be the fair market value of the shares at the date of grant, straight-line over the term of the advisory agreement. For the year ended December 31, 2023, the Company recognized $26,600 of consulting expense associated with this issuance. On September 11, 2023, the sale pursuant to the Purchase Agreement closed. No placement fees or commissions were paid in connection with this transaction.

On August 25, 2022, our Company filed Articles of Amendment to its Articles of Incorporation with the State Department of Assessments and Taxation of the State of Maryland to effect a one-for-ten (1:10) reverse stock split of our Company’s common stock, par value $0.01 per share. The August 25, 2022 Articles of Amendment become effective as of 12:01 a.m. Eastern Standard Time on September 2, 2022 (the “Effective Time”). At the Effective Time, every ten shares of common stock of our Company that were issued and outstanding immediately prior to the Effective Time were changed into one issued and outstanding share of common stock of our Company. The reverse stock split did not affect any stockholder’s ownership percentage of our Company’s shares, except to the limited extent that the reverse stock split resulted in any stockholder owning a fractional share. No fractional shares were issued in connection with the reverse stock split. Each stockholder who would otherwise have been entitled to receive a fraction of a share of our Company’s common stock instead received one whole share of common stock. There was no change to the number of authorized shares or the par value per share. Share and per share amounts have been retroactively restated to reflect the one-for-ten reverse stock split on September 2, 2022.

On August 1, 2022 our Company entered into a stock purchase agreement in connection with a private placement for total gross proceeds of $3.5 million. The stock purchase agreement provided for the issuance of an aggregate of 2,500,000 shares of our Company’s common stock to two investors at a purchase price of $1.40 per share, as adjusted for our Company’s one-for-ten (1:10) reverse stock split of our Company’s common stock, par value $0.01 per share. To enable the private placement transaction, our Company’s Board of Directors approved a 1-for-10 (1:10) reverse stock split of its common stock that was effective on September 2, 2022. On September 13, 2022, the sale pursuant to the stock purchase agreement closed. No placement fees or commissions were paid in connection with this transaction.

At December 31, 2023, our Company had no warrants outstanding.