Quarterly report pursuant to Section 13 or 15(d)

OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS

v3.21.2
OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS
9 Months Ended
Sep. 30, 2021
Disclosure Text Block Supplement [Abstract]  
Shareholders' Equity and Share-based Payments [Text Block]

NOTE 9 – OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS

 

BioSig Technologies, Inc.

 

2012 Equity Incentive Plan

 

On October 19, 2012, the Board of Directors of BioSig Technologies, Inc. approved the 2012 Equity Incentive Plan (the “Plan”) and terminated the Long-Term Incentive Plan (the “2011 Plan”). The Plan (as amended) provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to 14,474,450 shares of the Company’s common stock to officers, directors, employees and consultants of the Company. Under the terms of the Plan the Company may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of the Company only and nonstatutory options. The Board of Directors of the Company or a committee thereof administers the Plan and determines the exercise price, vesting and expiration period of the grants under the Plan.

 

However, the exercise price of an Incentive Stock Option should not be less than 110% of fair value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair value for a grantee who is not 10% stockholder. The fair value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the administrator in good faith.

 

Additionally, the vesting period of the grants under the Plan will be determined by the administrator, in its sole discretion, with an expiration period of not more than ten years. There are 3,606,901 shares remaining available for future issuance of awards under the terms of the Plan as of September 30, 2021.

 

Options

 

Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices of comparable entities until sufficient data exists to estimate the volatility using the Company’s own historical stock prices. Management determined this assumption to be a more accurate indicator of value. The Company accounts for the expected life of options based on the contractual life of options for non-employees.

 

For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options.  The fair value of stock-based payment awards during the three and nine months ended September 30, 2021 was estimated using the Black-Scholes pricing model.

 

During the nine months ended September 30, 2021, the Company granted an aggregate of 917,000 options to officers, directors and key consultants.

 

The following table presents information related to stock options at September 30, 2021:

 

Options Outstanding

   

Options Exercisable

 
               

Weighted

         
               

Average

   

Exercisable

 

Exercise

   

Number of

   

Remaining Life

   

Number of

 

Price

   

Options

   

In Years

   

Options

 
$ 2.51-5.00       2,539,757       7.2       1,579,427  
  5.01-7.50       1,229,032       4.7       997,757  
  7.51-10.00       203,333       8.0       138,326  
  10.01-12.50       65,000       8.6       50,415  
          4,037,122       6.5       2,765,925  

 

A summary of the stock option activity and related information for the Plan for the nine months ended September 30, 2021 is as follows:

 

   

Shares

   

Weighted-Average

Exercise Price

   

Weighted-Average

Remaining

Contractual Term

   

Aggregate

Intrinsic

Value

 

Outstanding at December 31, 2020

    3,568,497     $ 5.59       7.0     $ 110,961  

Grants

    917,000       3.39       10.0     $ -  

Exercised

    (9,375

)

  $ 2.96               -  

Forfeited/expired

    (439,000

)

  $ 6.68               -  

Outstanding at September 30, 2021

    4,037,122     $ 5.20       6.5     $ 938  

Exercisable at September 30, 2021

    2,765,925     $ 5.35       5.3     $ 563  

 

The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the stock price of BioSig Technologies, Inc. of $2.98 as of September 30, 2021, which would have been received by the option holders had those option holders exercised their options as of that date.

 

On January 12, 2021, BioSig Technologies, Inc. granted 387,500 options to purchase the company stock in connection with the services rendered at the exercise price of $4.23 per share for a term of ten years with one-third vesting on the one-year anniversary and two-thirds vesting quarterly thereafter beginning January 12, 2022 for two years.

 

On February 16, 2021, BioSig Technologies, Inc. granted 102,000 options to purchase the company stock in connection with the services rendered at the exercise price of $4.97 per share for a term of ten years with one-third vesting on the one year anniversary and two-thirds vesting quarterly thereafter beginning February 16, 2022 for two years.

 

On April 9, 2021, BioSig Technologies, Inc. granted 90,000 options to purchase the company stock in connection with the services rendered at the exercise price of $4.38 per share for a term of ten years with one-third vesting on the one-year anniversary and two-thirds vesting quarterly thereafter beginning April 9, 2022 for two years.

 

On April 13, 2021, BioSig Technologies, Inc. granted 25,000 options to purchase the company stock in connection with the services rendered at the exercise price of $4.42 per share for a term of ten years with one-third vesting on the one-year anniversary and two-thirds vesting quarterly thereafter beginning April 13, 2022 for two years.

 

On May 18, 2021, BioSig Technologies, Inc. granted 150,000 options to purchase the company stock in connection with the services rendered at the exercise price of $3.20 per share for a term of ten years with one-third vesting on the one year anniversary and two-thirds vesting quarterly thereafter beginning May 18, 2022 for two years.

 

On August 3, 2021, BioSig Technologies, Inc. granted an aggregated of 75,000 options to purchase shares of its common stock to three employees. The options are exercisable at $3.61 per share for ten years with one-third vesting on the first anniversary of the date of grant, and the remaining two-thirds vesting in substantially equal quarterly installments over the following two years.

 

On August 31, 2021, BioSig Technologies, Inc. granted an aggregated of 47,500 options to purchase shares of its common stock to three employees. The options are exercisable at $2.98 per share for ten years with immediate vesting.

 

On September 17, 2021, BioSig Technologies, Inc. granted an aggregated of 40,000 options to purchase shares of its common stock to two employees. The options are exercisable at $2.99 per share for ten years with one-third vesting on the first anniversary of the date of grant, and the remaining two-thirds vesting in substantially equal quarterly installments over the following two years.

 

The following assumptions were used in determining the fair value of options during the nine months ended September 30, 2021:

 

Risk-free interest rate

    0.77% - 1.30

%

Dividend yield

    0

%

Stock price volatility

    83.70% to 95.98

%

Expected life

 

5 to 6 years

 

Weighted average grant date fair value

  $ 3.39  

 

On June 28, 2021, in connection with the exit of two members of the Company’s board of directors, the Company extended the life of 145,000 previously issued director options from the contractual 90 days from termination of service to the earlier of the initial life or June 28, 2023. The change in estimated fair value of the modified options of $182,514 was charged to current period operations.

 

The following assumptions were used in determining the change in fair value of the modified options at June 28, 2021:

 

Risk-free interest rate

    0.05% - 0.25

%

Dividend yield

    0

%

Stock price volatility

    88.57

%

Expected life

 

0.25 – 2 years

 

 

On June 30, 2021, in connection with the resignation of a member of the Company’s board of directors, the Company entered into a one-year consulting contract and extended the life of 221,240 previously issued director options from the contractual 90 days from termination of service to the earlier of the initial life or two years after service contract completion. The change in estimated fair value of the modified options of $111,402 was charged to current period operations.

 

The following assumptions were used in determining the change in fair value of the modified options on June 30, 2021:

 

Risk-free interest rate

    0.06% - 0.46

%

Dividend yield

    0

%

Stock price volatility

    88.59

%

Expected life

 

0.59 – 3 years

 

 

The fair value of all options vesting during the three and nine months ended September 30, 2021 of $759,931 and $1,950,623 and $483,110 and $4,734,983 for the three and nine months ended September 30, 2020, respectively, was charged to current period operations.  Unrecognized compensation expense of $3,720,260 at September 30, 2021 will be expensed in future periods.

 

Warrants

 

The following table summarizes information with respect to outstanding warrants to purchase common stock of BioSig Technologies, Inc. at September 30, 2021: 

 

 

Exercise

   

Number

 

Expiration

 

Price

   

Outstanding

 

Date

  $ 4.80       250,000  

February 2025 to July 2026

  $ 6.16       568,910  

November 2027

            818,910    

 

On July 7, 2021, BioSig Technologies, Inc. issued warrants to purchase 125,000 shares of its common stock at $4.80 per share, expiring on July 2, 2026, for placement agent services in connection with the sale of the company’s common stock.

 

A summary of the warrant activity for the nine months ended September 30, 2021 is as follows:

 

   

Shares

   

 

Weighted-Average

Exercise Price

   

 

Weighted-Average

Remaining

Contractual

Term

   

 

Aggregate

Intrinsic Value

 

Outstanding at December 31, 2020

    1,446,200     $ 5.44       3.3     $ 1,500  

Grants

    125,000     $ 4.80       5.0          

Expired

    (752,290

)

  $ 5.00       -       -  

Outstanding at September 30, 2021

    818,910     $ 5.74       5.5     $ -  
                                 

Vested and expected to vest at September 30, 2021

    818,910     $ 5.74       5.5     $ -  

Exercisable at September 30, 2021

    818,910     $ 5.74       5.5     $ -  

 

The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the company’s stock price of $2.98 of September 30, 2021, which would have been received by the option holders had those option holders exercised their options as of that date.

 

Restricted Stock Units

 

The following table summarizes the restricted stock activity for the nine months ended September 30, 2021:

 

Restricted shares issued as of December 31, 2020

    218,334  

Granted

    301,000  

Vested and issued

    (216,834

)

Forfeited

    (120,000

)

Total

    182,500  
         

Comprised of:

       

Vested restricted shares as of September 30, 2021

    -  

Unvested restricted shares as of September 30, 2021

    182,500  

Total

    182,500  

 

On January 4, 2021, the Company granted 220,000 restricted stock units for services with 105,000 vesting one-third on the one-year anniversary and two-thirds vesting quarterly thereafter beginning January 4, 2022 for two years and with 115,000 vesting quarterly for one year.

 

On March 8, 2021 the Company granted 31,000 restricted stock units for services vesting on August 31, 2021.

 

On June 1, 2021, in connection with the termination of an employee, the Company accelerated vesting of 30,000 previously granted restricted stock units from a three-year period to fully vested. The change in vesting of the modified restricted stock unit resulted in a $109,725 charge to current period operations.

 

On June 30, 2021, in connection with the resignation of a member of the Company’s board of directors, the Company accelerated vesting of 50,000 previously granted restricted stock units from a three-year period to fully vested. The change in vesting of the modified restricted stock unit resulted in a $232,375 charge to current period operations.

 

On August 14, 2021 the Company granted 50,000 restricted stock units for services vesting quarterly for one year.

 

Stock based compensation expense related to restricted stock grants was $63,266 and $773,381 for the three and nine months ended September 30, 2021 and $174,945 and $1,005,243 for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, the stock-based compensation relating to restricted stock of $463,317 remains unamortized. 

 

ViralClear Pharmaceuticals, Inc.

 

2019 Long-Term Incentive Plan

 

On September 24, 2019, ViralClear’s Board of Directors approved the 2019 Long-Term Incentive Plan (as subsequently amended, the “ViralClear Plan”). The ViralClear Plan was approved by BioSig as ViralClear’s majority stockholder. The ViralClear Plan provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to 4,000,000 shares of ViralClear’s common stock to officers, directors, employees and consultants of the ViralClear. Under the terms of the ViralClear Plan, ViralClear may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of ViralClear only and nonstatutory options. The Board of Directors of ViralClear or a committee thereof administers the ViralClear Plan and determines the exercise price, vesting and expiration period of the grants under the ViralClear Plan.

 

However, the exercise price of an Incentive Stock Option should not be less than 110% of fair market value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair market value for a grantee who is not 10% stockholder. The fair market value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the administrator in good faith.

 

Additionally, the vesting period of the grants under the ViralClear Plan will be determined by the administrator, in its sole discretion, with an expiration period of not more than ten years. There are 2,330,750 shares remaining available for future issuance of awards under the terms of the ViralClear Plan.

 

ViralClear Options

 

A summary of the stock option activity and related information for the ViralClear Plan for the nine months ended September 30, 2021 is as follows:

 

   

Shares

   

Weighted-Average

Exercise Price

   

Weighted-Average

Remaining

Contractual

Term

 

Outstanding at December 31, 2020

    1,527,666     $ 5.00       3.96  

Grants

    -                  

Exercised

    (550,000

)

  $ 5.00          

Forfeited/expired

    (852,666

)

  $ 5.00          

Outstanding at September 30, 2021

    125,000     $ 5.00       7.40  

Exercisable at September 30, 2021

    74,998     $ 5.00       6.62  

 

The following table presents information related to stock options at September 30, 2021:

 

Options Outstanding

   

Options Exercisable

 
               

Weighted

         
               

Average

   

Exercisable

 

Exercise

   

Number of

   

Remaining Life

   

Number of

 

Price

   

Options

   

In Years

   

Options

 
$ 5.00       125,000       6.12       74,998  

 

The fair value of the stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices of comparable entities with the market value of stock price based on recent sales. The Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. 

 

On July 1, 2021, ViralClear issued 206,250 shares of its common stock in exchange for the cashless exercise of 550,000 options previously granted on October 16, 2019.

 

On June 30, 2021, in connection with the resignation of a member of the Company’s board of directors, the Company entered into a one-year consulting contract and extended the life of 25,000 previously issued director options from the contractual 90 days from termination of service to the earlier of the initial life or two years after service contract completion. The change in estimated fair value of the modified options of $26,577 was charged to current period operations.

 

The following assumptions were used in determining the change in fair value of the modified options at June 30, 2021:

 

Risk-free interest rate

    0.07% - 0.46

%

Dividend yield

    0

%

Stock price volatility

    88.59

%

Expected life

 

1.25 - 3 years

 

 

The fair value of all options vesting during the three and nine months ended September 30, 2021 of $36,521 and $109,562 and $242,703 and $5,836,855 for the three and nine months ended September 30, 2020, respectively, was charged to current period operations.  Unrecognized compensation expense of $219,124 at September 30, 2021 will be expensed in future periods.

 

Warrants (ViralClear)

 

The following table presents information related to warrants (ViralClear) at September 30, 2021:

 

 

Exercise

   

Number

 

Expiration

 

Price

   

Outstanding

 

Date

  $ 5.00       473,772  

November 2027

    10.00       6,575  

May 2025

            480,347    

 

Restricted stock units (ViralClear)

 

The following table summarizes the restricted stock activity for the nine months ended September 30, 2021:

 

Restricted shares issued as of December 31, 2020

    1,420,716  

Granted

    -  

Issued

    (40,000

)

Forfeited

    (82,716

)

Total

    1,298,000  
         

Comprised of:

       

Vested restricted shares as of September 30, 2021

    658,000  

Unvested restricted shares as of September 30, 2021

    640,000  

Total

    1,298,000  

 

Stock based compensation expense related to restricted stock unit grants of ViralClear was $87,865 and $508,896 for the three and nine months ended September 30, 2021 and $485,352 and $5,445,346 for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, the stock-based compensation relating to restricted stock of $372,093 remains unamortized.