Quarterly report pursuant to Section 13 or 15(d)

EQUITY

v3.10.0.1
EQUITY
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
NOTE 12. EQUITY

The Company has authorized the issuance of 500,000 shares of Series A preferred stock, 500,000 shares of Series C preferred stock, 4,000,000 shares of preferred stock and 4,000,000,000 shares of common stock.

 

Common Stock

 

During the six months ended June 30, 2018, the Company issued 74,923 shares of the Company’s common stock for the conversion of a related party convertible note in the amount of $25,000.

 

The Company issued common stock for services during the six months ended June 30, 2018. The table below details the issuances:

 

Month     Shares Issued      

Fair Value

 at Issue Date

 
                 
May 2018     106,250     $ 4,771  
June 2018     1,290,000       52,632  
Total     1,396,250     $ 57,403  

 

Options

 

2009 Plan

 

In 2009, the Company adopted the 2009 Stock Option Plan (the “2009 Plan”). The 2009 Plan allows the Company to issue options to officers, directors and employees, as well as consultants, to purchase up to 7,000,000 shares of common stock.

 

As of June 30, 2018, there are 5,200 stock options outstanding under the 2009 Plan.

 

2015 Equity Incentive Plan

 

On November 25, 2015, the Company authorized the Spotlight Innovation Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The total number of shares of common stock which may be issued under the options granted pursuant to the 2015 Plan is 3,600,000.

 

2016 Equity Incentive Plan

 

On December 13, 2016, the Company adopted the Spotlight Innovation Inc. 2016 Equity Incentive Plan (the “2016 Plan”) and reserved 5,000,000 shares of common stock under the 2016 Plan.

 

On June 26, 2018, the Compensation Committee of the Board of Directors awarded 1,390,000 shares of common stock to certain officers, directors, employees and key vendors, under the Company’s 2016 Equity Incentive Plan. As of June 30, 2018, the Company had not yet issued 100,000 shares of these awards and recorded stock payable for $4,080.

 

During the six months ended June 30, 2018, the Company issued no options to purchase shares of common stock. A summary of the stock option activity for the six months ended June 30, 2018 is presented below.

 

    Options    

Weighted-Average

Exercise Price

 
Outstanding December 31, 2017     153,771     $ 12.48  
Granted     -       -  
Exercised     -       -  
Expired/Forfeited     -       -  
Outstanding June 30, 2018     153,771     $ 12.48  
Exercisable June 30, 2018     153,771       12.48  

 

Warrants

 

During the six months ended June 30, 2018, the Company issued warrants to purchase 230,940 shares of common stock. These warrants were issued in connection with the Company’s private placement conducted during the six months ended June 30, 2018. These warrants have an exercise price equal to the closing price of the Company’s common stock on the six-month anniversary of the issuance thereof. The relative fair value of the warrants based on the Black-Scholes model was $3,334.

 

During the six months ended June 30, 2018, 95,000 warrants expired with an average exercise price of $1.25.

 

During the six months ended June 30, 2018, 45,000 warrants were terminated with an average exercise price of $1.02

 

The fair value of the above warrants was determined by using the Black-Scholes option-pricing model. Variables used in the model for the warrants issued include: i) discount rates ranging from 2.05% to 2.46%; ii) expected terms of 3.00 years; iii) expected volatility ranging from 139% to 147%; iv) zero expected dividends and v) stock price of $0.10 to $0.19.

 

A summary of the warrant activity for the six months ended June 30, 2018 is presented below:

 

    Warrants     Weighted-Average Exercise Price  
Outstanding at December 31, 2017     6,151,845     $ 1.16  
Granted     230,940       1.30  
Exercised     -       -  
Expired/forfeited/terminated     (140,000 )     1.18  
Outstanding June 30, 2018     6,242,785     $ 1.16  
Exercisable June 30, 2018     6,282,745     $ 1.16  

 

The weighted average remaining contractual term of the outstanding warrants and exercisable warrants as of June 30, 2018 is 1.13 years.