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Item 1. Financial Statements

2022-08-05 compared with 2022-04-26 · 267 added, 149 removed, 285 unchanged (59% of the section changed)

1 unchanged sentence

Balance Sheets

March 31, 2022

June 30, 2022

December 31, 2021

15 unchanged sentences

Stockholders’ Equity

Preferred Stock, $ 0.001 par;

Preferred Stock, $ 0.001 par value;

10,000,000 shares authorized;

465 shares issued and outstanding, respectively

Common Stock, $ 0.001

465 shares issued and outstanding

Common Stock, $ 0.001 par value;

24,000,000 shares authorized;

10,498,802 shares issued and outstanding , respectively

10,498,802 shares issued and outstanding

Additional Paid-In Capital

7 unchanged sentences

Three Months Ended

March 31, 2022

March 31, 2021

Six Months Ended

COST OF REVENUE

3 unchanged sentences

Operations and R&D Costs

Investor & Public Relations

Investor, Public Relations and Marketing

Organization Costs

7 unchanged sentences

( 2,140,900 )

( 4,519,785 )

( 3,592,497 )

OTHER INCOME (EXPENSE)

2 unchanged sentences

State Incentives

Exchange Rate Loss

Exchange Rate Gain (Loss)

Interest Expense

2 unchanged sentences

( 2,247,170 )

( 1,845,547 )

( 4,454,565 )

( 2,496,207 )

Provision for income Taxes

1 unchanged sentence

$ ( 1,845,547 )

$ ( 4,454,565 )

$ ( 2,496,207 )

Preferred Dividends

2 unchanged sentences

$ ( 1,859,767 )

$ ( 4,483,005 )

$ ( 2,571,334 )

Net Loss per Common Share – Basic and Diluted

2 unchanged sentences

of Stockholders’ Equity

The Quarters Ended March 31, 2022 and March 31, 2021

the Three and Six Months Ended June 30, 2022 and June 30, 2021

the Three Months Ended June 30, 2022 and June 30, 2021

Preferred Stock

4 unchanged sentences

Accumulated Deficit

Balances, December 31, 2021

Balances, March 31, 2022

$ ( 42,814,795 )

2 unchanged sentences

Preferred Stock Dividends

Preferred Stock Dividends, shares

Common Shares Issued for Third Party Services

Stock Options Issued for Third Party Services

Stock Options Awarded to Directors for Services

Stock Options Awarded to Employees

Balances, June 30, 2022

$ ( 45,076,185 )

Preferred Stock

Shares Outstanding

Preferred Stock

Shares Outstanding

Paid-in Capital

Accumulated Deficit

Balances, March 31, 2021

$ ( 33,816,575 )

( 1,845,547 )

Extinguishment of Derivative Liability

Preferred Stock Dividends

Securities Issued for Third Party Services

Stock Options Awarded to Employees

Stock Options Awarded to Directors

Balances, June 30, 2021

$ ( 35,676,342 )

the Six Months Ended June 30, 2022 and June 30, 2021

Preferred Stock

4 unchanged sentences

Accumulated Deficit

December 31, 2020

Balances, December 31, 2021

$ ( 40,593,180 )

Common Shares Sold in Public Offerings

Derivative Liability Value on Issuance Date

( 4,454,565 )

Common Shares issued for Exercise of Warrants

Preferred Stock Dividends

Common Shares Issued for Conversion of Preferred Shares

Common Shares Issued for Third Party Services

Stock Options Issued for Third Party Services

Stock Options Awarded to Directors for Services

Stock Options Awarded to Employees

Balances, June 30, 2022

$ ( 45,076,185 )

Preferred Stock

Shares Outstanding

Preferred Stock

Shares Outstanding

Paid-in Capital

Accumulated Deficit

Balances, December 31, 2020

$ ( 33,105,008 )

( 2,496,207 )

Common Shares Sold in Public Offerings

Extinguishment of Derivative Liability

( 1,092,441 )

Preferred Stock Dividends

Common Shares Issued Upon Conversion of Preferred Shares

Common Shares Issued Upon Exercise of Warrants

Securities Issued for Third Party Services

Stock Options Awarded to Employees

Stock Options Awarded to Directors

Offering Costs

1 unchanged sentence

( 1,600,967 )

Balances, March 31, 2021

Balances, June 30, 2021

$ ( 35,676,342 )

1 unchanged sentence

Statements of Cash Flows

Three Months Ended

March 31, 2022

March 31, 2021

Six Months Ended

June 30, 2022

June 30, 2021

OPERATING ACTIVITIES

5 unchanged sentences

Gain on Derivative Liability

( 1,092,441 )

Stock Based Compensation - Employees

39 unchanged sentences

The Company anticipates that its core technologies

will allow its clientele to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve

will allow its customers to combine advanced manufacturing quality assurance and process control protocols with novel materials to achieve

breakthrough product potential in many industries including aerospace, defense, oil and gas, bio-medical, and power generation.

3 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 March 31, 2022 and

recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2022 and

2021 and for the periods then ended have been made.

3 unchanged sentences

conjunction with the December 31, 2021 audited financial statements and notes thereto included in the Company’s Annual Report on

The results of operations for the periods ended March 31, 2022 and 2021 are not necessarily indicative of the operating results

The results of operations for the periods ended June 30, 2022 and 2021 are not necessarily indicative of the operating results

for the full year.

6 unchanged sentences

Company does not use derivative instruments for hedging of market risk or for trading or speculative purposes.

On March 26, 2021, the

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 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 and will expire two years after

the initial exercise date.

On March 26, 2021,

the Company issued warrants to purchase an aggregate of 2,190,000

shares of common stock in a private placement concurrently with a registered direct 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 ,

and will expire on May 24, 2023 .

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

warrants at the issue date, such warrants were accounted for as a derivative liability.

For the three months ended March 31, 2021, the

Company recorded a gain of $ 802,285 due to the change in the fair value of the derivative liability as measured on a recurring basis.

On May 24, 2021, upon receiving shareholder approval to increase its authorized common shares, the Company reclassified the warrant liability

For the six months ended June 30, 2021, the Company

recorded a gain of $ 1,092,441 due to the change in the fair value of the derivative liability as measured on a recurring basis.

24, 2021, upon receiving shareholder approval to increase its authorized common shares, the Company reclassified the warrant liability

to equity pursuant to ASC 815.40.35.8.

2 unchanged sentences

260, “Earnings Per Share.” Shares underlying the Company’s outstanding warrants, options

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

At March 31, 2022 and 2021, the

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

At June 30, 2022 and 2021, the

Company had the following common shares underlying these instruments:

of Antidilutive Securities Excluded from Computation of Earnings Per Share

Three Months Ended March 31,

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Stock Options

1 unchanged sentence

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 March 31, 2022 and 2021:

of Computing Loss Per Share

Three Months Ended March 31

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

of dilutive potential common stock for the periods ended June 30, 2022 and 2021:

Schedule of Computing Loss Per Share

Three Months Ended June 30

Six Months Ended June 30

Net Loss per Common Share - Basic and Diluted

Loss from continuing operations available to common stockholders

Loss Applicable to Common Stockholders (numerator)

$ ( 2,261,390 )

$ ( 1,859,767 )

$ ( 4,483,005 )

$ ( 2,571,334 )

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

7 unchanged sentences

obsolescence.

Recognition – The Company’s revenue derived primarily from sales of our software and related hardware suite under perpetual

licenses and from providing engineering services under contracts.

The Company recognizes revenue in accordance with ASC Topic No.

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2014-09, Revenue from Contracts

with Customers .

ASU 2014-09 is a comprehensive revenue recognition standard that superseded nearly all existing revenue recognition

guidance under prior U.S.

GAAP and replaced it with a principles-based approach for determining revenue recognition.

The core principle

of the standard is the recognition of revenue upon the transfer of promised goods or services to customers in an amount that reflects

the consideration to which the company expects to be entitled in exchange for those goods or services.

In general, we determine revenue

recognition by:

(1) identifying the contract, or contracts, with our customer;

(2) identifying the performance obligations in the contract;

(3) determining the transaction price;

(4) allocating the transaction price to performance obligations in the contract;

and (5) recognizing

revenue when, or as, we satisfy performance obligations by transferring the promised goods or services.

In January 2022, the Company began offering a subscription

option to its customers, pursuant to which it enters into agreements to lease its PrintRite3D platform for terms between 12 and 36 months

and provide technical support and maintenance for the term of the arrangement, as well as installation and training.

The Company has determined

these are leases because they relate to discrete pieces of equipment that customers have the right to substantially all the economic benefit

from and exclusive right to use during the term of the arrangement.

These leases are classified as operating leases and the Company retains

title to the underlying equipment.

agreements may be renewed for successive one-year terms unless notice is given by either party of its intent not to renew at least 30

days before the end of the lease term.

For leases with 36-month terms, the lessee may terminate the agreement after the first 18 months

with 30-days written notice.

Some, but not all, of the arrangements provide for a lessee to purchase the asset at a stated amount

that approximates fair value and are not reasonably certain to be exercised at the inception of the arrangement.

There are no anticipated

variable lease payments at the inception of the arrangement.

There are two non-lease components in the arrangement

that consist of technical support and maintenance, and installation and training.

The Company has elected the single component practical

expedient to combine the technical support and maintenance with the lease as they have the same pattern of transfer.

The installation

and training do not have the same pattern of transfer;

therefore, this component is not eligible for the single component practical expedient.

The consideration has been allocated on a relative fair value basis of the underlying lease and non-lease components.

The Company has

estimated the residual value of the leased assets based on the life of the underlying assets, the ability to refurbish and sell the assets,

as well as the Company’s ability to componentize the hardware and utilize subassemblies in other products.

Revenue from lease payments related to these operating leases for the three and six months ended June 30, 2022 was $ 14,138 and $ 20,138 , respectively.

Lease Payments Receivable

lease payments receivable for each of the succeeding years ending December 31 are as follows:

Lease Payments Receivable

Year ending December 31,

2022 (remaining)

2025 and thereafter

Underlying Operating Leases:

under operating leases are comprised of the following:

underlying operating leases

June 30, 2022

PrintRite 3D Hardware

Accumulated Depreciation

Net Book Value

Company is depreciating assets over their useful life of 7 years, but certain subassemblies and components may have a longer economic

2 – Inventory

March 31, 2022 and December 31, 2021, the Company’s inventory was comprised of:

March 31, 2022

June 30, 2022 and December 31, 2021, the Company’s inventory was comprised of:

Schedule of Inventory

June 30, 2022

December 31, 2021

6 unchanged sentences

during the “payroll tax deferral period.” The payroll tax deferral period began on March 27, 2020 and ended on December 31,

At March 31, 2022, the total remaining amount of the deferral was $ 37,728 .

At June 30, 2022, the total remaining amount of the deferral was $ 37,728 .

Per the terms of the deferral program, such amount is

1 unchanged sentence

4 - Stockholders’ Equity

May 24, 2021, at a Special Stockholders Meeting, our stockholders approved an increase in the authorized shares of common stock 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 a price of

10 unchanged sentences

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.

Pursuant to the Purchase Agreement, the purchasers severally agreed to vote the shares of common stock

purchased under the Purchase Agreement in favor of any resolution presented to the stockholders of the Company for the purpose of obtaining

approval of an increase in the authorized shares of the Company’s Common Stock from 12,000,000 to 24,000,000 shares (“Stockholder

March 2021, the Company closed a public offering in which it issued 2,190,000 shares of common stock at a price of $ 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.

Pursuant to the Purchase Agreement, the purchasers severally agreed to vote the shares of common stock purchased

under the Purchase Agreement in favor of any resolution presented to the stockholders of the Company for the purpose of obtaining approval

of an increase in the authorized shares of the Company’s Common Stock from 12,000,000 to 24,000,000 shares (“Stockholder

In a concurrent private placement under the Purchase Agreement, the Company issued to the purchasers warrants (“Warrants”)

11 unchanged sentences

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

465 shares of preferred stock were issued

and outstanding at March 31, 2022 and December 31,2021, respectively.

465 shares of preferred stock were issued and

outstanding at June 30, 2022 and December 31, 2021.

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

2 unchanged sentences

newly created Series D Convertible Preferred Stock (the “Series D Preferred Stock”) at an initial stated value of $ 1,000

per share (the “Stated Value”).

Dividends accrue at a 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 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).

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

conversion price equal to 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 Stock being redeemed .

March 31, 2022, there were 132 shares of Series D Preferred Stock outstanding, which if converted as of March 31, 2022, including the

make-whole dividends, would result in the issuance of 87,267 shares of common stock.

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

triggering events described therein) and are payable monthly 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 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).

Alternatively, a holder may at any

time convert all, or any part, of its Series D Preferred Shares at an alternative conversion price equal to 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 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 Stock being redeemed.

June 30, 2022, there were 132 shares of Series D Preferred Stock outstanding, which if converted as of June 30, 2022, including the make-whole

dividends, would result in the issuance of 87,267 shares of common stock.

with the Institutional Private Placement, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued

and sold to certain of its directors and the Company’s previously largest shareholder 333 shares of the Company’s newly created

Series E Convertible Preferred Stock (the “Series E Preferred Stock”) at an initial stated value of $ 1,000 per share.

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 Stock by said amount.

The Series E Preferred Stock is initially convertible into 48,544 shares of common stock (subject

to adjustment for stock splits, dividends, recapitalizations and similar events).

March 31, 2022, all of the issued Series E Preferred Stock was outstanding, which if converted as of March 31, 2022, including the make-whole

and sold to certain of its directors and the Company’s largest shareholder 333 shares of the Company’s newly created Series

E Convertible Preferred Stock (the “Series E Preferred Stock”) at an initial stated value of $ 1,000 per share.

accrue at a dividend rate of 9 % per annum and are payable monthly in kind by the increase of the stated value of the Series E Preferred

Stock by said amount.

The Series E Preferred Stock is initially convertible into 48,544 shares of common stock (subject to adjustment

for stock splits, dividends, recapitalizations and similar events).

June 30, 2022, 333 shares of Series E Preferred Stock were outstanding, which if converted as of June 30, 2022, including the make-whole

dividends, would result in the issuance of 61,651 shares of common stock.

of March 31, 2022, an aggregate of 187,762 shares of common stock were reserved for future issuance under the 2013 Plan.

of June 30, 2022, an aggregate of 201,861 shares of common stock were reserved for future issuance under the 2013 Equity Incentive Plan.

March 2022, the Company granted options to its non-employee directors to purchase up to an aggregate of 56,000 shares of common stock

at a strike price of $ 2.50 .

As of March 31, 2022, 25 % of such grants were fully vested and exercisable, and the remaining 75 % will vest

in equal installments at the end of each of the next three quarters.

the three months ended March 31, 2022, the Company granted four employees options to purchase up to an aggregate of 22,000 shares of

common stock in connection with their employment.

The options have a strike price of $ 2.50 and will vest in equal annual installments

on the first through third anniversaries of the grant dates, provided that the employees remain employed by the Company on such dates.

In addition, in February 2022, the Company granted its President and CEO an option to purchase up to 70,000 shares of common stock in

connection with his employment.

The option has a strike price of $ 2.50 and will vest in equal monthly installments over 36 months beginning

March 2022, provided that the President and CEO remains employed by the Company on such dates.

As of June 30, 2022, 50 % of such grants were fully vested and exercisable, and the remaining 50 % will vest

in equal installments at the end of each of the next two quarters.

the six months ended June 30, 2022, the Company granted four employees options to purchase up to an aggregate of 22,000 shares of common

stock in connection with their employment.

The options have a strike price of $ 2.50 and will vest in equal annual installments on the

first through third anniversaries of the grant dates, provided that the employees remain employed by the Company on such dates.

in February 2022, the Company granted its President and CEO an option to purchase up to 70,000 shares of common stock in connection with

his employment.

The option has a strike price of $ 2.50 and will vest in equal monthly installments over 36 months beginning March 2022,

provided that the President and CEO remains employed by the Company on such dates.

in March 2022, the Company granted two consultants options to purchase up to an aggregate of 14,000 shares of common stock for services

to be rendered.

The options have a strike price of $ 2.50 , and are fully vested and exercisable as to 50 % of such grants.

The remaining

50 % will vest on June 30, 2022 , provided that the consultants remain as service providers to the Company as of such date.

The options have a strike price of $ 2.50 and are fully vested.

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

stock on the dates of grant.

Stock options are typically granted throughout the year and generally vest over a period from one to three

years of service and expire five years from the grant date, unless otherwise specified.

The Company recognizes compensation expense for

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

stock-based compensation expense included in the statements of operations for the three months ended March 31, 2022 and 2021 was $ 170,976

stock on the grant date.

Stock options are typically granted throughout the year and generally vest over a period from one to three years

of service and expire five years from the grant date, unless otherwise specified.

The Company recognizes compensation expense for the

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

stock-based compensation expense included in the statements of operations for the six months ended June 30, 2022 and 2021 was $ 338,415

and $ 233,919 , respectively, all of which is related to stock options.

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

three months ended March 31, 2022 and the year ended December 31, 2021:

of Share Based Payments Award Stock Options Valuation Assumptions

interest rate

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

six months ended June 30, 2022 and 2021:

Schedule of Share Based Payments Award Stock Options Valuation Assumptions

Dividend yield

Risk-free interest rate

0.95 - 1.65 %

0.19 - 0.32 %

Expected volatility

106.4 - 110.0 %

116.8 - 123.8 %

life (in years)

activity for the three months ended March 31, 2022 and the year ended December 31, 2021 was as follows:

of Stock Option Activity

Expected life (in years)

activity for the six months ended June 30, 2022 and the year ended December 31, 2021 was as follows:

Schedule of Stock Option Activity

Weighted Average Exercise Price ($)

5 unchanged sentences

Forfeited or cancelled

Options outstanding March 31, 2022

Options expected to vest in the future as of March 31, 2022

Options exercisable at March 31, 2022

Options vested, exercisable, and options expected to vest at March 31, 2022

Options outstanding June 30, 2022

Options expected to vest in the future as of June 30, 2022

Options exercisable at June 30, 2022

Options vested, exercisable, and options expected to vest at June 30, 2022

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

our common stock for those awards that have an exercise price below the $ 2.04

closing price of our Common Stock on March 31,

At March 31, 2022, no option grants had an exercise price below $ 2.04 .

March 31, 2022, there was $ 1,222,243 of unrecognized share-based compensation expense related to unvested stock options with a weighted

our common stock for those awards that have an exercise price below the $ 1.28 closing price of our Common Stock on June 30, 2022.

June 30, 2022, no option grants had an exercise price below $ 1.28 .

June 30, 2022, there was $ 990,838 of unrecognized stock-based compensation expense related to unvested stock options with a weighted

average remaining recognition period of 1.77 years.

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The Plan provides for incentive awards only in the form of stock appreciation rights payable

in cash (“SARs”) and no shares of common stock are reserved in connection with the adoption of the Plan since no shares will

be issued pursuant to the Plan.

in cash (“SARs”) and no shares of common stock are reserved or will be issued pursuant to the Plan.

may be granted to any Service Provider.

11 unchanged sentences

exercisable on the date of the grant.

February 16, 2022, the Company granted 30,000 SARs to its President and CEO at an exercise price of $ 2.50 , the closing price of the Company’s

common stock on the date of grant.

The SARs expire on the fifth anniversary of the grant date and will vest equally over 36 months beginning

March 2022, provided that the CEO remains an employee of the Company on such dates.

February 16, 2022, the Company granted 30,000

SARs to our President and Chief Executive Officer at an exercise price of $ 2.50 ,

the closing price of the Company’s common stock on the date of grant.

The SARs will expire on the fifth anniversary of the

grant date and will vest equally over 36 months beginning March 2022, provided that the President and Chief Executive Officer remains an employee of the Company on

March 31, 2022, the Company granted 3,000 SARs to a consultant as partial compensation for services pursuant to a consulting agreement.at

an exercise price of $ 2.50 , The SARs expire on the fifth anniversary of the grant date.

As of March 31, 2022, 50 % of such grant was fully

vested and exercisable, and the remaining 50 % will vest on June 30, 2022 , provided that the consultant remains a service provider to

the Company on that date.

an exercise price of $ 2.50 , The SARs expire on the fifth anniversary of the grant date and are fully vested and exercisable.

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 the Statement of Operations as of the applicable reporting date.

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

ended March 31, 2022 and the year ended December 31, 2021:

of Share Based Payments Award Stock Options Valuation Assumptions

interest rate

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

ended June 30, 2022 and the year ended December 31, 2021:

Schedule of Share Based Payments Award Stock Options Valuation Assumptions

Dividend yield

Risk-free interest rate

0.82 - 1.65 %

0.39 - 0.40 %

Expected volatility

108.4 - 119.0 %

life (in years)

activity for the three months ended March 31, 2022 and the year ended December 31, 2021 was as follows:

of Stock Option Activity

Average Exercise Price ($)

Average Remaining Contractual Life (Yrs.)

Intrinsic Value ($)

outstanding at December 31, 2020

outstanding at December 31, 2021

outstanding March 31, 2022

expected to vest in the future as of March 31, 2022

exercisable at March 31, 2022

vested, exercisable, and SARs expected to vest at March 31, 2022

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 $ 2.04 closing price of our common stock on March 31,

12,033 of the SARs grants have an exercise price below $ 2.04 .

March 31, 2022, there was $ 660,001 of unrecognized share-based compensation expense related to unvested SARs with a weighted average

remaining recognition period of 2.21 years.

activity for the three months ended March 31, 2022 the year ended December 31, 2021 was as follows:

Expected life (in years)

activity for the six months ended June 30, 2022 and the year ended December 31, 2021 was as follows:

Schedule of Stock Option Activity

Weighted Average Exercise Price ($)

Weighted Average Remaining Contractual Life (Yrs.)

Aggregate Intrinsic Value ($)

SARs outstanding at December 31, 2020

Forfeited or cancelled

SARs outstanding at December 31, 2021

Forfeited or cancelled

SARs outstanding June 30, 2022

SARs expected to vest in the future as of June 30, 2022

SARs exercisable at June 30, 2022

SARs vested, exercisable, and SARs expected to vest at June 30, 2022

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

our common stock for those awards that have an exercise price currently below the $ 1.28 closing price of our common stock on June 30,

No SARs grants have an exercise price below $ 1.28 .

June 30, 2022, there was $ 577,981 of unrecognized stock-based compensation expense related to unvested SARs with a weighted average remaining

recognition period of 2.0 years.

activity for the six months ended June 30, 2022 and the year ended December 31, 2021 was as follows:

of Warranty Activity

5 unchanged sentences

Forfeited or cancelled

Warrants outstanding at March 31, 2022

Warrants outstanding at June 30, 2022

5 - Subsequent Events

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.

July 1, 2022, our Board of Directors (the “Board”), based upon determinations and recommendations of the Compensation Committee

of the Board, approved the Company’s 2022 executive compensation program.

The program includes targeted cash incentive bonuses

and long-term equity incentive awards to Jacob Brunsberg, our Chief Executive Officer, Frank Orzechowski, our Chief Financial Officer,

Darren Beckett, our Chief Technology Officer, and Mark Ruport, our other named executive officer as of December 31, 2021, whom we collectively

refer to as the “Participating Persons.” Also, on July 1, 2022, the Board, upon the recommendation of the Compensation Committee,

adopted retention bonus and change in control plans for certain of the Participating Persons.

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