Stockholders’ Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Stockholders’ Equity

Note 5. Stockholders’ Equity

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 “Reverse Stock Split”). 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. Unless we indicate otherwise, all information in this Quarterly Report on Form 10-Q gives pro forma effect to the Reverse Stock Split and the corresponding adjustment of all common stock price per share and common stock warrant price data.

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. To enable the private placement transaction, our Company’s Board of Directors approved the Reverse Stock Split. 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.

During the second quarter of 2021, holders of the remaining 14,137 warrants that had been outstanding exercised their options to purchase a total of 14,137 shares of our Company’s common stock at $0.20 per share. The warrants were granted in 2014 to two individuals who acquired convertible debentures from the Company in 2014. The warrants were exercisable two years after issuance and expire seven years after issuance. The fair value of the warrants was determined using the Black-Scholes pricing model. The relative fair value of the warrants was recorded as a discount to the notes payable with an offsetting credit to additional paid-in capital since our Company determined that the warrants were an equity instrument in accordance with FASB ASC 815. The debt discount related to the warrant issuances was accreted through interest expense over the term of the notes payable. At September 30, 2022, our Company had no warrants outstanding.