What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-10-21 compared with 2021-07-22 · 408 added, 298 removed, 228 unchanged (76% of the section changed)

1 unchanged sentence

Balance Sheets

Receivable, net

September 30, 2021

December 31, 2020

Current Assets:

and Equipment, net

Prepaid Asset

AND STOCKHOLDERS’ EQUITY

Accounts Receivable, net

Prepaid Assets

Total Current Assets

Other Assets:

Property and Equipment, net

Intangible Assets, net

Long-Term Prepaid Asset

Total Other Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Appreciation Rights

Act Deferred Payroll Tax Liability

Accounts Payable

Deferred Revenue

Accrued Expenses

Total Current Liabilities

Long-Term Liabilities:

Stockholders’

Stock, $ 0.001 par;

Stock Appreciation Rights

CARES Act Deferred Payroll Tax Liability

Total Long-Term Liabilities

TOTAL LIABILITIES

Stockholders’ Equity

Preferred Stock, $ 0.001 par;

10,000,000 shares authorized;

465 and 715 issued and outstanding, respectively

Stock, $ 0.001 par;

Common Stock, $ 0.001 par;

24,000,000 shares authorized;

10,498,802 and 5,995,320 issued and outstanding, respectively

Paid-In Capital

Additional Paid-In Capital

Accumulated Deficit

( 38,181,540 )

( 33,105,008 )

Stockholders’ Equity

LIABILITIES AND STOCKHOLDERS’ EQUITY

Total Stockholders’ Equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes to condensed financial statements.

Statements of Operations

PROFIT (LOSS)

& Public Relations

& Professional Service Fees

& Amortization

Operating Expenses

Three Months Ended

September 30,

Nine Months Ended

September 30,

COST OF REVENUE

OPERATING EXPENSES:

FROM OPERATIONS

Salaries & Benefits

Stock-Based Compensation

Operating R&D Costs

Investor, Public Relations & Marketing

Organization Costs

Legal & Professional Service Fees

Office Expenses

Depreciation & Amortization

Other Operating Expenses

Total Operating Expenses

LOSS FROM OPERATIONS

( 2,491,417 )

2 unchanged sentences

( 4,210,936 )

INCOME (EXPENSE)

Rate Gain (Loss)

on Dissolution of Joint Venture

OTHER INCOME (EXPENSE)

BEFORE PROVISION FOR INCOME TAXES

Interest Income

State Incentives

Exchange Rate Gain (Loss)

Interest Expense

Loss on Dissolution of Joint Venture

Total Other Income (Expense)

LOSS BEFORE PROVISION FOR INCOME TAXES

( 2,490,978 )

1 unchanged sentence

( 4,987,185 )

for income Taxes

( 3,711,236 )

Provision for income Taxes

$ ( 2,490,978 )

2 unchanged sentences

$ ( 3,711,236 )

Loss Applicable to Common Stockholders

Preferred Dividends

( 1,744,471 )

Net Loss Applicable to Common Stockholders

$ ( 2,505,198 )

1 unchanged sentence

$ ( 5,076,532 )

Loss per Common Share – Basic and Diluted

Average Number of Shares Outstanding – Basic and Diluted

$ ( 5,455,707 )

Net Loss per Common Share – Basic and Diluted

Weighted Average Number of Shares Outstanding – Basic and Diluted

accompanying notes to condensed financial statements.

of Stockholders’ Equity

the Three and Six Months Ended June 30, 2021 and 2020

the Three Months Ended June 30, 2021 and June 30, 2020

March 31, 2021

the Three and Nine Months Ended September 30, 2021 and 2020

the Three Months Ended September 30, 2021 and September 30, 2020

Balances, June 30, 2021

$ ( 35,676,342 )

Preferred Stock Dividends

Preferred Stock Dividends, shares

Shares Securities Issued to Directors for Services

Securities Issued to Directors for Services, Shares

Securities Issued for Third Party Services

Securities Issued for Third

Party Services, shares

Securities Awarded to Employees

Preferred Shares issued for

Exercise of Preferred Warrants

Preferred Shares issued for

Exercise of Preferred Warrants, shares

Common Shares issued for Conversion

of Preferred Shares

Common Shares issued for Conversion

of Preferred Shares, shares

Common Shares Sold in Public

Common Shares Sold in Public Offering, shares

Preferred Shares Sold in Private Offering

Preferred Shares Sold in Private Offering, shares

Extinguishment of Derivative Liability

Common Shares issued for Exercise of Common Warrants

Common Shares issued for Exercise of Common Warrants, shares

Offering Costs

Issuance of Fractional Shares from Reverse Split

Issuance of Fractional Shares from Reverse Split, shares

Stock Options Awarded to Directors

Securities Issued to Directors

( 2,490,978 )

Extinguishment

of Derivative Liability

Stock Dividends

Issued for Third Party Services

Options Awarded to Employees

Options Awarded to Directors

Common Shares Sold in Public Offerings

Common Shares Sold in Public Offerings, shares

Balances, September 30, 2021

$ ( 38,181,540 )

Balances, June 30, 2020

$ ( 29,595,944 )

Preferred Stock Dividends

Common Shares issued for Conversion of Preferred Shares

Common Shares Issued for Conversion of

Preferred Shares, shares

Preferred Shares issued for Exercise of Preferred Warrants

Preferred Shares issued for Exercise of

Preferred Warrants, shares

Common Shares Awarded to Employees

Common Shares Awarded to Employees, shares

Securities Issued to Directors for Services

Securities Issued for Third Party Services

Securities Awarded to Employees

( 1,218,013 )

Balances, September 30, 2020

$ ( 31,551,301 )

the Nine Months Ended September 30, 2021 and September 30, 2020

Balances, December 31, 2020

$ ( 33,105,008 )

Beginning balance

$ ( 33,105,008 )

Common Shares Sold in Public Offering

Extinguishment of Derivative Liability

( 1,092,441 )

Preferred Stock Dividends

Common Shares issued for Conversion of Preferred Shares

Common Shares issued for Exercise of Common Warrants

Common Shares issued for Exercise of

Common Warrants, shares

Stock Options Awarded to Directors

Securities Issued for Third Party Services

Securities Awarded to Employees

Offering Costs

Preferred Shares Sold in Private Offering

Preferred Shares Sold in Private

Offering, shares

Issuance of Fractional Shares from Reverse Split

Issuance of Fractional Shares from

Reverse Split, shares

June 30, 2021

( 1,600,967 )

March 31, 2020

( 1,600,967 )

Shares Sold in Public Offering

Stock Dividends

Shares issued for Conversion of Preferred Shares

Shares issued for Exercise of Preferred Warrants

Issued for Third Party Services

Options Awarded to Employees

Shares Awarded to Employees

June 30, 2020

( 4,987,185 )

the Six Months Ended June 30, 2021 and June 30, 2020

December 31, 2020

Shares Sold in Public Offerings

Extinguishment

of Derivative Liability

Stock Dividends

Shares issued for Conversion of Preferred Shares

Shares issued for Exercise of Common Warrants

Issued for Third Party Services

Options Awarded to Employees

Options Awarded to Directors

June 30, 2021

December 31, 2019

( 4,987,185 )

Balances, September 30, 2021

$ ( 38,181,540 )

Ending balance

$ ( 38,181,540 )

Shares Sold in Public Offering

Shares Sold in Private Offering

Stock Dividends

Balances, December 31, 2019

$ ( 26,095,594 )

Shares issued for Conversion of Preferred Shares

Shares issued for Exercise of Preferred Warrants

Issued for Third Party Services

Options Awarded to Employees

Shares Awarded to Employees

of Fractional Shares from Reverse Split

June 30, 2020

Common Shares Sold in Public Offering

Preferred Shares Sold in Private Offering

Preferred Stock Dividends

( 1,744,471 )

Common Shares issued for Conversion of Preferred Shares

Preferred Shares issued for Exercise of Preferred Warrants

Securities Issued to Directors for Services

Securities Issued for Third Party Services

Securities Awarded to Employees

Offering Costs

Issuance of Fractional Shares from Reverse Split

( 3,711,236 )

Balances, September 30, 2020

$ ( 31,551,301 )

accompanying notes to condensed financial statements.

Statements of Cash Flows

OPERATING ACTIVITIES

$ ( 4,987,185 )

$ ( 3,711,236 )

to reconcile Net Loss to Net Cash used in operating activities:

and Amortization

on Derivative Liability

Adjustments to reconcile Net Loss to Net Cash used

in operating activities:

Noncash Expenses:

Depreciation and Amortization

Gain on Derivative Liability

( 1,092,441 )

Based Compensation - Employees

Based Compensation - Third Party Services

Based Compensation - Directors

in assets and liabilities:

CASH USED IN OPERATING ACTIVITIES

Stock Based Compensation - Employees

Stock Based Compensation – Third Party Services

Stock Based Compensation - Directors

Change in assets and liabilities:

Accounts Receivable

Prepaid Assets

Accounts Payable

Deferred Revenue

Accrued Expenses

Deferral of Payroll Taxes under

the CARES Act

NET CASH USED IN OPERATING ACTIVITIES

( 4,786,590 )

( 3,676,595 )

of Property and Equipment

of Intangible Assets

of Joint Venture

CASH USED IN INVESTING ACTIVITIES

Proceeds from Public and Private Issuances of Securities

Offering Costs

INVESTING ACTIVITIES

Purchase of Property and Equipment

Purchase of Intangible Assets

Dissolution of Joint Venture

NET CASH USED IN INVESTING ACTIVITIES

FINANCING ACTIVITIES

Gross Proceeds from Public and Private Issuances of Securities

Less Offering Costs

( 1,600,967 )

of Note Payable

Proceeds from Exercise

of Payroll Taxes under the CARES Act

CASH PROVIDED BY FINANCING ACTIVITIES

CHANGE IN CASH FOR PERIOD

AT BEGINNING OF PERIOD

AT END OF PERIOD

investing and financing activities disclosure:

of Common Shares for Preferred Dividends

of Securities for services

of cash paid for:

Payment of Note Payable

Proceeds from Exercise of Warrants

NET CASH PROVIDED BY FINANCING

NET CHANGE IN CASH FOR PERIOD

CASH AT BEGINNING OF PERIOD

CASH AT END OF PERIOD

Supplemental Disclosures:

Noncash investing and financing activities disclosure:

Issuance of Common Shares for Preferred Dividends

Issuance of Securities for Services

Disclosure of cash paid for:

accompanying notes to condensed financial statements.

15 unchanged sentences

In the opinion of management, all adjustments (which include only normal

recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2021 and

2020 and for the periods then ended have been made.

recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2021

and 2020 and for the periods then ended have been made.

Certain information and footnote disclosures normally included in financial statements

4 unchanged sentences

in the Company’s Form 10-K.

The results of operations for the periods ended June 30, 2021 and 2020 are not necessarily indicative

The results of operations for the periods ended September 30, 2021 and 2020 are not necessarily indicative

of the operating results for the full year.

2 unchanged sentences

in the current-period financial statements.

These reclassifications have no impact on the previously reported results.

Value of Financial Instruments - The Company applies ASC 820, “Fair Value Measurements .

13 unchanged sentences

Company closed an offering in which it issued warrants to purchase an aggregate of 2,190,000 shares of common stock in a private placement

concurrently with a registered direct offering (“Registered Offering”) of our common stock The warrants became exercisable on May 24, 2021 , the date the Company

obtained stockholder approval to increase its authorized common shares from 12,000,000 to 24,000,000 (“the Initial Exercise Date”)

and will expire two years after the Initial Exercise Date.

concurrently with a registered direct offering (“Registered Offering”) of our common stock The warrants became exercisable

on May 24, 2021 , the date the Company obtained stockholder approval to increase its authorized common shares from 12,000,000 to 24,000,000

(“the Initial Exercise Date”) and will expire two years after the Initial Exercise Date.

to ASC 815-40-25-10, because the Company did not have sufficient authorized and unissued shares of common stock available to settle the

4 unchanged sentences

Schedule of Warrant Liability Measured on Recurring Basis

of Issuance March 26, 2021

Liability - Warrants

September 30, 2021

Date of Issuance March 26, 2021

Derivative Liability - Warrants

following table presents a reconciliation of the derivative liability measured at fair value on a recurring basis using significant unobservable

1 unchanged sentence

Schedule of Derivative Liability Measured on a Recurring Basis Using Significant Unobservable Input (Level 3)

Value on Issuance Date

in Fair Value

Fair Value on Issuance Date

Change in Fair Value

( 1,092,441 )

Fair Value on May 24, 2021

Extinguishment

of Derivative Liability

Extinguishment of Derivative Liability

( 4,615,771 )

Value on June 30, 2021

Fair Value on September 30, 2021

Per Share - The computation of loss per share is based on the weighted average number of shares outstanding during the period in

2 unchanged sentences

preferred shares were excluded due to the anti-dilutive effect they would have on the computation.

At June 30, 2021 and 2020, the Company

had the following common shares underlying these instruments:

At September 30, 2021 and 2020, the

Company had the following common shares underlying these instruments:

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Months Ended June 30,

Stock Warrants

Underlying Common Shares

September 30,

Preferred Stock Warrants

Stock Options

Preferred Stock

Total Underlying Common Shares

following data shows the amounts used in computing loss per share and the effect on income and the weighted average number of shares

of dilutive potential common stock for the periods ended June 30, 2021 and 2020:

of dilutive potential common stock for the periods ended September 30, 2021 and 2020:

Schedule of Earnings Per Share, Basic and Diluted

Months Ended June 30

Loss per Common Share - Basic and Diluted

from continuing

available to Common stockholders (numerator)

Three Months Ended

Nine Months Ended

Net Loss per Common Share - Basic and Diluted

Loss from continuing

Operations available to Common stockholders (numerator)

$ ( 2,505,198 )

2 unchanged sentences

$ ( 5,455,707 )

average number of common shares Outstanding used in loss per share during the Period (denominator)

Loss from continuing Operations available to Common stockholders (numerator)

$ ( 2,505,198 )

$ ( 1,955,357 )

$ ( 5,076,532 )

$ ( 5,455,707 )

Weighted average number of common shares Outstanding used in loss per share during the Period (denominator)

Enacted Accounting Standards - The FASB established the ASC as the source of authoritative accounting principles recognized by the

12 unchanged sentences

2 – Inventory

June 30, 2021 and December 31, 2020, the Company’s inventory was comprised of:

September 30, 2021 and December 31, 2020, the Company’s inventory was comprised of:

Schedule of Inventory

3 – Deferral of Social Security Tax Payments

September 30, 2021

December 31, 2020

Raw Materials

Work in Process

Finished Goods

Total Inventory

3 – CARES Act Deferred Payroll Tax Liability

to sections 2302(a)(1) and (a)(2) of the CARES Act, the Company has elected to defer payments of its share of Social Security tax due

1 unchanged sentence

The payroll tax deferral period began on March 27, 2020 and ended on December 31,

At June 30, 2021, the total amount of such deferral was $ 75,455 .

At September 30, 2021 the total amount of such deferral was $ 75,455 .

Per the terms of the deferral program, 50 % of the deferred

5 unchanged sentences

and will expire two years from such date.

The Company has determined that these

warrants are free standing financial instruments that are legally detachable and separately exercisable from the common stock included

in the registered direct offering.

Management also determined that on the Issuance Date, the Company did not have sufficient authorized

and unissued shares to settle the warrants, and as such required classification as a liability pursuant to ASC 815 “Derivative

Instruments and Hedging” .

In accordance with the accounting guidance, the outstanding warrants were recognized as a warrant

liability on the balance sheet and were measured at their inception date fair value and subsequently re-measured at each reporting period

with changes being recorded as a component of other income in the statement of operations.

The Company has determined that these warrants are free standing financial instruments that

are legally detachable and separately exercisable from the common stock included in the registered direct offering.

Management also determined

that on the Issuance Date, the Company did not have sufficient authorized and unissued shares to settle the warrants, and as such required

classification as a liability pursuant to ASC 815 “Derivative Instruments and Hedging” .

In accordance with the accounting

guidance, the outstanding warrants were recognized as a warrant liability on the balance sheet and were measured at their inception date

fair value and subsequently re-measured at each reporting period with changes being recorded as a component of other income in the statement

of operations.

a Special Stockholders Meeting held on May 24, 2021, the Company received approval to increase its authorized common shares from 12,000,000

to 24,000,000 .

Pursuant to ASC 815-40-35-8, the Company reclassified the warrant liability

to equity as of such date.

Pursuant to ASC 815-40-35-8, the Company reclassified the warrant liability to equity as of such date.

fair value of the derivative liability presented below was measured using the Black Scholes valuation model.

Significant inputs into

the model for the six months ended June 30, 2021 are as follows:

the model for the nine months ended September 30, 2021 are as follows:

Schedule of Fair Value of Derivative Liability Using Black Scholes Valuation Model

3 unchanged sentences

Schedule of Fair Value of Warrant Liability

Value Per Share

Value at initial measurement date of March 26, 2021

on change in Fair Value of Warrant Liability

Warrant Liability

Warrants Outstanding

Fair Value Per Share

Fair Value at initial measurement date of March 26, 2021

(Gain) on change in Fair Value of Warrant Liability

( 1,092,441 )

Fair Value as of

Extinguishment

of Derivative Liability

Fair Value as of May 24, 2021

Extinguishment of Derivative Liability

( 2,190,000 )

( 4,615,771 )

Value as of June 30, 2021

Fair Value as of September 30, 2021

Company has presented the fair value measurement as a Level 3 measurement, relying on unobservable inputs reflecting management’s

5 unchanged sentences

of stockholder approval (i.e., May 24, 2021).

Management has determined the Black Scholes model to be the most reliable and least volatile determinate of

the current fair value of the warrants.

It is the Company’s expectation to maximize on all observable market inputs for the warrants

and calibrate the model to incorporate relevant observable market data into the fair value measurement at each future measurement date,

if applicable.

the six months ended June 30, 2021, the Company recognized a gain of $ 1,092,441

on the change in fair value of the warrants.

Management has determined the Black Scholes model to be the most reliable and least volatile

determinate of the current fair value of the warrants.

It is the Company’s expectation to maximize on all observable market inputs

for the warrants and calibrate the model to incorporate relevant observable market data into the fair value measurement at each future

measurement date, if applicable.

the nine months ended September 30, 2021, the Company recognized a gain of $ 1,092,441 on the change in fair value of the warrants.

5 - Stockholders’ Equity

May 24, 2021, at a Special Stockholders Meeting, our authorized shares of common stock were increased from 12,000,000 to 24,000,000 .

January 2021, the Company closed a public offering of its securities in which it issued 1,711,783

shares of common stock at $ 3.00

per share, resulting in net proceeds of approximately

$ 4,532,445 after

deducting underwriting commissions and other offering expenses payable by the Company.

Pursuant to the Underwriting Agreement, the Company

also issued to the Underwriter or its designee warrants to purchase 136,943 shares of common stock.

Such warrants have a term of five

years and an exercise price of $ 3.75

January 2021, the Company closed a public offering of its securities in which it issued 1,711,783 shares of common stock at $ 3.00 per

share, resulting in net proceeds of approximately $ 4,532,445 after deducting underwriting commissions and other offering expenses payable

by the Company.

Pursuant to the Underwriting Agreement, the Company also issued to the Underwriter or its designee warrants to purchase

136,943 shares of common stock.

Such warrants have a term of five years and an exercise price of $ 3.75 per share.

February 2021, the Company issued 263,200 shares of common stock pursuant to the exercise of warrants issued in our January 2020 private

March 2021, the Company issued 119,000

shares of common stock in exchange for the conversion

shares of Series D Convertible Preferred Stock,

including 19,000

shares of common stock as in-kind payment of

preferred stock dividends.

March 2021, the Company issued 119,000 shares of common stock in exchange for the conversion of 250 shares of Series D Convertible Preferred

Stock, including 19,000 shares of common stock as in-kind payment of preferred stock dividends.

Also in March 2021, the Company issued

shares of common stock pursuant to the exercise

of warrants issued in our April 2020 offering, and 21,591

shares of common stock issued pursuant to the

cashless exercise of placement agent warrants.

March 2021, the Company closed a public offering of its securities in which it issued 2,190,000 shares of common stock at $ 4.445 per

share, resulting in net proceeds to the Company of approximately $ 8,736,487 after deducting placement agent commissions and other offering

costs payable by the Company.

In a concurrent private placement under the Purchase Agreement, the Company issued to the purchasers warrants to purchase

an aggregate of 2,190,000 shares of Common Stock at an exercise price of $ 4.32 per share.

Each Warrant became exercisable on May 24,

2021 , the date the Company obtained stockholder approval of an increase in the authorized shares of the Company’s Common Stock and will expire two years from such date.

The Company also issued to designees

of the Placement Agent warrants to purchase up to 175,200 shares of Common Stock (the “Placement Agent Warrants”) constituting

8 % of the aggregate number of shares of Common Stock sold in the Registered Offering.

The Placement Agent Warrants have substantially

the same terms as the Warrants, except that the Placement Agent Warrants have an exercise price equal to 125 % of the offering price per

share (or $ 5.55625 per share).

Upon any exercise of the Warrants for cash, we have also agreed to pay the Placement Agent warrants to

purchase 8.0 % of the number of shares of our Common Stock issued upon the cash exercise of the Warrants.

191,204 shares of common stock pursuant to the exercise of warrants issued in our April 2020 offering, and 21,591 shares of common stock

issued pursuant to the cashless exercise of placement agent warrants.

March 2021, the Company closed a public offering of its securities in which it issued 2,190,000

shares of common stock at $ 4.445

per share, resulting in net proceeds to the Company

of approximately $ 8,736,487

after deducting placement agent commissions and

other offering costs payable by the Company.

In a concurrent private placement under the Purchase Agreement, the Company issued to the

purchasers warrants to purchase an aggregate of 2,190,000

shares of Common Stock at an exercise price of

Each Warrant became exercisable on

24, 2021 , the date the Company obtained stockholder

approval of an increase in the authorized shares of the Company’s Common Stock and will expire two years from such date.

also issued to designees of the Placement Agent warrants to purchase up to 175,200 shares of Common Stock (the “Placement Agent

Warrants”) constituting 8 % of the aggregate number of shares of Common Stock sold in the Registered Offering.

The Placement Agent

Warrants have substantially the same terms as the Warrants, except that the Placement Agent Warrants have an exercise price equal to

125 % of the offering price per share (or $ 5.55625 per share).

Upon any exercise of the Warrants for cash, we have also agreed to pay

the Placement Agent warrants to purchase 8.0 % of the number of shares of our Common Stock issued upon the cash exercise of the Warrants.

March 2021, Company issued 1,500 shares of common stock valued at $ 4.99 per share to CorProminence, an investor relations firm previously

engaged by the Company as partial compensation for services previously rendered.

In September 2021, the Company granted 5,204 shares

of common stock to non-executive employees pursuant to the 2013 Equity Incentive Plan.

April 6, 2020, the Company closed a public offering of equity securities in which it issued 493,027 shares of common stock and pre-funded

7 unchanged sentences

Net proceeds to the Company after deducting offering expenses were approximately $ 1,230,000 .

the second quarter of 2020, the Company issued 1,603,984 shares of common stock in exchange for the conversion of 1,684 shares of Series

D Convertible Preferred stock, including 323,624 shares of common stock as in-kind payment of preferred stock dividends.

April 2020, the Company granted 11,517 shares of common stock to employees under the 2013 Equity Incentive Plan.

Such shares vested on December

the first quarter of 2020, the Company issued 408,318 shares of common stock in exchange for the conversion of 1,107 shares of Series

D Convertible Preferred stock, including 86,801 shares of common stock as in-kind payment of preferred stock dividends.

February 2020, the Company issued 2,500 shares of common stock valued at $ 8.70 per share to MHZCI, LLC, an investor relations firm engaged

by the Company, as partial compensation for services to be rendered.

Company is authorized to issue 10,000,000 shares of preferred stock, $ 0.001 par value.

465 and 333 shares of preferred stock were issued

and outstanding at June 30, 2021 and 2020, respectively.

January 2020, the Company entered into a Securities Purchase Agreement (the “Institutional SPA”) with certain

institutional investors (the “Institutional Private Placement”).

Pursuant to the Institutional SPA, the Company issued

and sold 1,640

shares of the Company’s newly created Series D Convertible Preferred Stock (the “Series D Preferred Stock”).

the Certificate of Designations for the Series D Preferred Stock, the Series D Preferred Stock has an initial stated value of $ 1,000

per share (the “Stated Value”).

Dividends accrue at a dividend rate of 9 %

per annum (subject to increase upon the occurrence (and during the continuance) of certain triggering events described therein) and,

on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series D Preferred Shares by said amount.

The holders of the Series D Preferred Shares will have the right at any time to convert all or a portion of the Series D Preferred

Shares (including, without limitation, accrued and unpaid dividends and make-whole dividends through the third anniversary of the

closing date) into shares of the Company’s Common Stock at the conversion price then in effect, which is $ 2.50

the nine months ended September 30, 2020, the Company issued 3,157,427 shares of common stock in exchange for the conversion of 6,109

shares of Series D Convertible Preferred stock, and 749,924 shares of common stock as in-kind payment of preferred stock dividends.

the nine months ended September 30, 2020, the Company issued 25,851 shares of common stock for services.

Company is authorized to issue 10,000,000

shares of preferred stock, $ 0.001

shares of preferred stock were issued and outstanding

at September 30, 2021 and 2020, respectively.

January 2020, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors (the

“Institutional Private Placement”).

Pursuant to the SPA, the Company issued and sold 1,640 shares of the Company’s

newly created Series D Convertible Preferred Stock (the “Series D Preferred Stock”).

Under the Certificate of Designations

for the Series D Preferred Stock, the Series D Preferred Stock has an initial stated value of $ 1,000 per share (the “Stated Value”).

Dividends accrue at a dividend rate of 9 % per annum (subject to increase upon the occurrence (and during the continuance) of certain

triggering events described therein) and, on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series

D Preferred Shares by said amount.

The holders of the Series D Preferred Shares will have the right at any time to convert all or a portion

of the Series D Preferred Shares (including, without limitation, accrued and unpaid dividends and make-whole dividends through the third

anniversary of the closing date) into shares of the Company’s Common Stock at the conversion price then in effect, which is $ 2.50

(subject to adjustment for stock splits, dividends, recapitalizations and similar events and full ratchet price protection).

addition, a holder may at any time, alternatively, convert all, or any part, of its Series D Preferred Shares at an alternative

conversion price, which equals the lower of the applicable conversion price then in effect, and the greater of (x) $1.80 and (y) 85%

of the average volume weighted average price (“VWAP”) of the Common Stock for a five (5) trading day period prior to

such conversion.

Upon the occurrence of certain triggering events, described in the Certificate of Designations, including, but not

limited to payment defaults, breaches of transaction documents, failure to maintain listing on the Nasdaq Capital Market, and other

defaults set forth therein, the Series D Preferred Shares would become subject to redemption, at the option of a holder, at a 125%

premium to the underlying value of the Series D Preferred Shares being redeemed.

June 30, 2021 there were 132 shares of Series D Convertible Preferred stock outstanding, which if converted at the Conversion Price of

$ 2.50 as of June 30, 2021, including the make-whole dividends, would result in the issuance of 62,832 shares of common stock.

with the Institutional Private Placement, the Company entered into a Securities Purchase Agreement (the “Other SPA”) with certain

a holder may at any time, alternatively, convert all, or any part, of its Series D Preferred Shares at an alternative conversion price,

which equals the lower of the applicable conversion price then in effect, and the greater of (x) $1.80 and (y) 85% of the average volume

weighted average price (“VWAP”) of the Common Stock for a five (5) trading day period prior to such conversion.

occurrence of certain triggering events, described in the Certificate of Designations, including, but not limited to payment defaults,

breaches of transaction documents, failure to maintain listing on the Nasdaq Capital Market, and other defaults set forth therein, the

Series D Preferred Shares would become subject to redemption, at the option of a holder, at a 125% premium to the underlying value of

the Series D Preferred Shares being redeemed

September 30, 2021 there were 132 shares of Series D Convertible Preferred stock outstanding, which if converted at the Conversion Price

of $ 2.50 as of September 30, 2021, including the make-whole dividends, would have resulted in the issuance of 62,832 shares of common

with the Institutional Private Placement, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain

of its directors and the Company’s previously largest shareholder (the “Other Private Placement”).

Pursuant to the Other SPA, the Company

issued and sold 333 shares of the Company’s newly created Series E Convertible Preferred Stock (the “Series E Preferred Stock”).

Dividends accrue at a dividend rate of 9 % per annum and, on a monthly basis, shall be payable in kind by the increase of the Stated Value

of the Series E Preferred Shares by said amount.

The Series E Preferred Stock is initially convertible into 48,544 shares of Common Stock.

June 30, 2021, all of the issued Series E Convertible Preferred Stock were outstanding, which if converted as of June 30, 2021, including

the make-whole dividends, would have resulted in the issuance of 61,651 shares of common stock.

previous years and in the six months ended June 30, 2021, the Company issued to various employees, directors, and contractors shares

to the SPA, the Company issued and sold 333

shares of the Company’s newly created Series

E Convertible Preferred Stock (the “Series E Preferred Stock”).

Dividends accrue at a dividend rate of 9 %

per annum and, on a monthly basis, shall be payable in kind by the increase of the Stated Value of the Series E Preferred Shares by said

The Series E Preferred Stock is initially convertible into 48,544

shares of Common Stock.

September 30, 2021, all of the issued Series E Convertible Preferred Stock were outstanding, which if converted as of September 30, 2021,

including the make-whole dividends, would have resulted in the issuance of 61,651 shares of common stock.

previous years and in the nine months ended September 30, 2021, the Company issued to various employees, directors, and contractors shares

of the Company’s common stock, subject to restrictions, pursuant to the 2013 Equity Incentive Plan (the “2013 Plan”).

2 unchanged sentences

recorded as an increase to stockholders’ equity.

During the six months ended June 30, 2021 and June 30, 2020, $ 0 and $ 7,870 , respectively,

of the unvested compensation cost related to these issues was recognized.

June 30, 2021, there was $ 0 of unrecognized deferred compensation expense to be recognized over the remainder of the year.

of June 30, 2021, an aggregate of 890,000 shares of common stock were reserved for issuance under the 2013 Plan.

the six months ended June 30, 2021, the Company granted options to purchase a total of 145,487 shares of common stock to 5 employees,

4 directors and 3 consultants with vesting periods ranging from immediately upon issuance to 3 years beginning January 4, 2021.

the six months ended June 30, 2020, the Company granted options to purchase a total of 335,183 shares of common stock to 19 employees

and 4 consultants with vesting periods ranging from immediately upon issuance to 3 years beginning June 15, 2020.

During the nine months ended September 30, 2021 and September 30, 2020, $ 0 and

$ 15,740 , respectively, of the unvested compensation cost related to these issues was recognized.

September 30, 2021, there was no unrecognized deferred compensation expense to be recognized over the remainder of the year.

July 15, 2021, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013

Equity Incentive Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Plan

by 875,000 shares of our common stock to a total of 1,765,000 shares.

of September 30, 2021, an aggregate of 335,152 shares of common stock remained available for issuance under the 2013 Plan.

the nine months ended September 30, 2021, the Company granted options to purchase a total of 697,831 shares of common stock to 34 employees,

4 directors and 4 consultants with vesting periods ranging from immediately upon issuance to three years beginning January 4, 2021.

the nine months ended September 30, 2020, the Company granted options to purchase a total of 472,183 shares of common stock to 20 employees,

5 directors and 5 consultants with vesting periods ranging from immediately upon issuance to 3 years beginning July 31, 2020.

Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company’s

4 unchanged sentences

of the stock options over the requisite service period for each stock option award.

share-based compensation expense included in the statements of operations for the six months ended June 30, 2021 and 2020 is $ 233,919

and $ 424,989 of which $ 233,919 and $ 417,119 is related to stock options, respectively.

share-based compensation expense included in the statements of operations for the nine months ended September 30, 2021 and 2020 is $ 893,431

and $ 483,208

of which $ 874,176 and $ 467,468

is related to stock options, respectively.

fair value of share-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the

six months ended June 30, 2021 and 2020:

nine months ended September 30, 2021 and 2020:

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

interest rate

Dividend yield

Risk-free interest rate

0.19 – 0.70 %

0.22 - 1.52 %

life (in years)

activity for the six months ended June 30, 2021 and the year ended December 31, 2020 was as follows:

Expected volatility

114.0 - 117.0

Expected life (in years)

activity for the nine months ended September 30, 2021 and the year ended December 31, 2020 was as follows:

Schedule of Stock Option Activity

outstanding at December 31, 2019

outstanding at December 31, 2020

outstanding June 30, 2021

expected to vest in the future as of June 30, 2021

exercisable at June 30, 2021

vested, exercisable, and options expected to vest at June 30, 2021

aggregate intrinsic value at June 30, 2021 is calculated as the difference between the exercise price of the underlying awards and the

quoted price of our common stock for those awards that have an exercise price currently below the $3.90 closing price of our common stock

on June 30, 2021.

All of the 2021 option grants have an exercise price currently below $ 3.90 .

June 30, 2021, there was $ 987,899 of unrecognized share-based compensation expense related to unvested share options with a weighted

Weighted Average

Options outstanding at December 31, 2019

Forfeited or cancelled

Options outstanding at December 31, 2020

Forfeited or cancelled

Options outstanding September 30, 2021

Options expected to vest in the future as of September 30, 2021

Options exercisable at September 30, 2021

Options vested, exercisable, and options expected to vest at September 30, 2021

aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of

our common stock for those awards that have an exercise price currently below the $ 3.02 closing price of our common stock on September

None of the 2021 option grants have an exercise price currently below $ 3.02 .

September 30, 2021, there was $ 1,544,383 of unrecognized share-based compensation expense related to unvested share options with a weighted

average remaining recognition period of 3.0 years.

22 unchanged sentences

the exercise price and medium of payment and vesting provisions, and to specify the provisions of the SAR Agreement relating to such

June 23, 2020, the

Company granted, pursuant to the Plan, (i) 60,094 SARs to its President and Chief Executive Officer, (ii) 12,019 SARs to its Vice

President of Business Development, (iii) 24,038 SARs to its Chief Technology Officer, and (iv) 18,028 SARs to its Chief Financial

The exercise price of each such SAR is $2.63, which was the closing price of the Company’s common stock on the date

Such SARs expire on the fifth anniversary of the grant date and may be settled only in cash.

Additionally, each such SAR

will vest and become exercisable in three equal (as closely as possible) installments on each of the first, second and third

anniversaries of the grant date, subject, in each case, to the applicable SAR holder being in the continuous employ of the Company

on the applicable vesting date, and, in the event of a Change in Control (as defined in the Plan), will become immediately vested

and exercisable as long as the applicable holder is in the Company’s employ immediately prior to the Change in Control, and

will otherwise be on such other terms set forth in the form of Stock Appreciation Rights Agreement.

November 19, 2020, we granted 13,500 SARs to a consultant as partial compensation for services pursuant to the consulting

August 11, 2021, the Company granted, pursuant to the Plan, (i) 77,748 SARs to its President and Chief Executive Officer, (ii) 30,313

SARs to its Vice President of Business Development, (iii) 76,304 SARs to its Chief Technology Officer, and (iv) 48,580 SARs to its Chief

Financial Officer.

The exercise price of each such SAR is $ 3.42 , which was the closing price of the Company’s common stock on the

date of grant.

June 23, 2020, the Company granted, pursuant to the Plan, (i) 60,094 SARs to its President and Chief Executive Officer, (ii) 12,019 SARs

to its Vice President of Business Development, (iii) 24,038 SARs to its Chief Technology Officer, and (iv) 18,028 SARs to its Chief Financial

The exercise price of each such SAR is $ 2.63 , which was the closing price of the Company’s common stock on the date of

expire on the fifth anniversary of the grant date and may be settled only in cash.

Additionally, each such SAR will vest and become exercisable

in three equal (as closely as possible) installments on each of the first, second and third anniversaries of the grant date, subject,

in each case, to the applicable SAR holder being in the continuous employ of the Company on the applicable vesting date, and, in the

event of a Change in Control (as defined in the Plan), will become immediately vested and exercisable as long as the applicable holder

is in the Company’s employ immediately prior to the Change in Control, and will otherwise be on such other terms set forth in the

form of Stock Appreciation Rights Agreement.

Company recognizes compensation expense and a corresponding liability for the fair value of the SARs over the requisite service period

2 unchanged sentences

and any changes in fair value are reflected in income as of the applicable reporting date.

were no SAR awards issued during the first six months of 2021.

activity for the six months ended June 30, 2021 was as follows:

fair value of SAR awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the nine months

ended September 30, 2021 and 2020:

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

Dividend yield

Risk-free interest rate

Expected volatility

Expected life (in years)

activity for the nine months ended September 30, 2021 was as follows:

Schedule of Stock Option Activity

outstanding at December 31, 2020

outstanding June 30, 2021

expected to vest in the future as of June 30, 2021

exercisable at June 30, 2021

vested, exercisable, and options expected to vest at June 30, 2021

aggregate intrinsic value at June 30, 2021 is calculated as the difference between the exercise price of the underlying awards and the

quoted price of our common stock for those awards that have an exercise price currently below the $ 3.90 closing price of our common stock

on June 30, 2021.

June 30, 2021, there was $ 155,361 of unrecognized share-based compensation expense related to unvested SARs with a weighted average remaining

recognition period of 1.98 years.

activity for the six months ended June 30, 2021 and 2020 was as follows:

Weighted Average

SARs outstanding at December 31, 2020

Forfeited or cancelled

SARs outstanding September 30, 2021

SARs expected to vest in the future as of September 30, 2021

SARs exercisable at September 30, 2021

SARs vested, exercisable, and options expected to vest at September 30, 2021

aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of

our common stock for those awards that have an exercise price currently below the $ 3.02 closing price of our common stock on September

None of the 2021 SARs grants have an exercise price currently below $ 3.02 .

September 30, 2021, there was $ 614,947 of unrecognized share-based compensation expense related to unvested SARs with a weighted average

remaining recognition period of 2.87 years.

activity for the nine months ended September 30, 2021 and 2020 was as follows:

Summary of Warrant Activity

outstanding at December 31, 2019

outstanding at June 30, 2020

Warrants outstanding

at December 31, 2020

outstanding at June 30, 2021

Weighted Average

Warrants outstanding at December 31, 2019

Forfeited or cancelled

Warrants outstanding at September 30, 2020

Warrants outstanding at December 31, 2020

Forfeited or cancelled

Warrants outstanding at September 30, 2021

connection with its March 2021 private placement, the Company issued warrants to purchase 2,190,000 shares of its common stock at an

exercise price of $ 4.32 per share.

Each Warrant became exercisable on May 24, 2021 , the date the Company obtained stockholder approval

of an increase in the authorized shares of the Company’s Common Stock and will expire two years from such date.

The Company also

issued to designees of the Placement Agent warrants to purchase up to 175,200 shares of Common Stock (the “Placement Agent Warrants”)

constituting 8 % of the aggregate number of shares of Common Stock sold in the Registered Offering.

The Placement Agent Warrants have

substantially the same terms as the Warrants, except that the Placement Agent Warrants have an exercise price equal to 125 % of the offering

price per share (or $ 5.55625 per share).

Upon any exercise of the Warrants for cash, we have also agreed to pay the Placement Agent warrants

to purchase 8.0 % of the number of shares of our Common Stock issued upon the cash exercise of the Warrants.

connection with its January 2021 public offering, the Company issued to the Underwriter or its designee warrants to purchase 136,943

of shares of common stock.

Such warrants have a term of five years from the commencement of sales in the Offering and an exercise price

of $ 3.75 per share.

January 8, 2021, the Company obtained a waiver (“Waiver”) from certain investors (“Investors”) with respect to

certain anti-dilution adjustment provisions of a January 2020 warrant and an April 2020 warrant issued to the Investors.

As consideration

for the Waiver, the Company issued an additional warrant (“Warrant”) to the Investors to purchase an aggregate of 100,000

shares of common stock, each exercisable after six months for a five-year period with an exercise price equal to 115% of the closing

price of the Company’s stock on the date of the waiver.

6 - Subsequent Events

July 15, 2021, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013

Equity Incentive Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Equity Incentive Plan

by 875,000 shares of our common stock to a total of 1,765,000 shares.

Company performed an evaluation of subsequent events through the date of filing of these condensed financial statements with the SEC.

There were no material subsequent events which affected, or could affect, the amounts or disclosures in the condensed financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements