NOTE 8 – STOCKHOLDERS’ EQUITY

The Company is authorized to issue a total number of 25,000,000 shares of “blank check” preferred stock with a par value of $0.001. As of June 30, 2022, and December 31, 2021, there were no shares of preferred stock issued or outstanding.

The Company is authorized to issue a total number of 18,750,000 shares of common stock with a par value of $0.001.

As of June 30, 2022, and December 31, 2021, there were 10,207,212 and 10,207,212 shares of common stock issued and outstanding, respectively. During the six months ended June 30, 2022, the Company issued 75,000 shares of common stock for exercise of warrants.

On May 18, 2021, our Board of Directors approved the Marizyme, Inc. Amended and Restated 2021 Stock Incentive Plan (“SIP”). The SIP incorporates stock options issued prior to May 18, 2021. The SIP authorized 1,325,000 options for issuance. As of June 30, 2022, there remains 256,014 options available for issuance (December 31, 2021 – 318,514).

During the six months ended June 30, 2022, the Company granted 100,000 (December 31, 2021 – 383,125) share purchase options to directors of the Company.

The summary of option activity for the six months ended June 30, 2022, is as follows:

As of June 30, 2022, the Company had the following options outstanding:

As of June 30, 2022, we determined that the following performance condition attached to the restricted share awards granted in the fiscal 2021 were more likely than not to be achieved:

Therefore, compensation cost of $295,750 for the restricted share awards was recognized in stock-based compensation for the six months ended June 30, 2022 (June 30, 2021 - $Nil).

As of June 30, 2022 and December 31, 2021, there are 4,813,836 and 3,036,185 warrants outstanding, respectively.

During the six months ended June 30, 2022, the Company issued the following:

On January 26 and February 14, 2022, in exchange for services of Mr. Richmond, we granted him 75,000 warrants to purchase an aggregate 75,000 shares of Marizyme’s common stock at an exercise price of $0.04 per share. The warrants issued had an average term of 5 years, vested immediately, and were fair valued at $568,677 and recorded in salary expense in the condensed consolidated statements of operations for the six months ended June 30, 2022. On March 15, 2022, Mr. Richmond exercised 75,000 warrants issued to him.

On June 26, 2022, the Company issued additional 86,760 warrants to Mr. Richmond and 57,840 warrants to Univest Securities, LLC to purchase an aggregate 144,600 shares of Marizyme’s common stock at an exercise price of $7.00 per share. The warrants issued had an average term of 5 years, vested immediately, and were fair valued at $1,281,854, of which $769,113 was recorded in salary expense and $512,471 in professional fees in the condensed consolidated statements of operations for the six months ended June 30, 2022.

In the six months ended June 30, 2022, pursuant to the Unit Purchase Agreement the Company issued an aggregate of 1,661,458 additional New Class C warrants with an exercise price of $9.00 per share and a term of five years.

During the three and six months ended June 30, 2022, the Company recorded $676,242 and $1,392,674 in non-cash share-based compensation in the stock-based compensation line on the condensed consolidated statements of operations, respectively (June 30, 2021 - $194,657 and $562,375, respectively). As of June 30, 2022, there was $2,154,935 of total unrecognized compensation cost related to non-vested stock-based compensation awards. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.85 years.

7. Stockholders’ Equity

a) Preferred stock

The Company is authorized to issue a total number of 25,000,000 shares of “blank check” preferred stock with a par value of $0.001. As of December 31, 2021 and 2020, there were no shares of preferred stock issued or outstanding.

b) Common stock

The Company is authorized to issue a total number of 18,750,000 shares of common stock with a par value of $0.001.

As of December 31, 2021 there were 10,132,212 shares of common stock issued and outstanding (2020 – 8,982,212). During the year ended December 31, 2021, the Company had the following share issuances:

During the year end December 31, 2020, the Company issued the following:

c) Options

On May 18, 2021, our Board of Directors approved the Marizyme, Inc. Amended and Restated 2021 Stock Incentive Plan (“SIP”). The SIP incorporates stock options issued prior to May 18, 2021. The SIP authorized 1,325,000 options for issuance. As of December 31, 2021, there remains 412,264 options available for issuance.

During the year ended December 31, 2021, the company granted 383,125 (2020 – 335,000) share purchase options to directors, officers, employees, and consultants of the Company. The weighted-average assumptions used to estimate the fair value of stock options using the Black-Scholes option valuation model were as follows:

The Company recognizes forfeitures as they occur.

The summary of option activity for the years ended December 31, 2021 and 2020 was as follows:

As of December 31, 2021, the Company had the following options issued and outstanding:

d) Restricted Share Units

During the year ended December 31, 2021, the Company granted restricted share awards for an aggregate of 87,500 shares of common stock (2020 - Nil) to directors, senior officers and consultants of the Company, with underlying performance conditions. As of December 31, 2021, we determined that none of the performance condition were likely to be achieved, therefore compensation cost of $Nil for the restricted share awards was recognized in the year ended December 31, 2021 (2020 - $Nil).

e) Warrants

During the year ended December 31, 2021, the Company issued the following:

Unit Purchase Agreements Warrants

Pursuant to the May Unit Purchase Agreement (Note 6) the Company issued: (i) Class A Warrants for the purchase an aggregate of 117,495 shares of common stock, with a strike price of $12.52 per share and a term of five years, and (ii) Class B Warrants for the purchase an aggregate of 117,495 shares of common stock with a strike price of $20.00 per share and a term of five years.

On September 29, 2021, pursuant to the September 2021 Amended Unit Purchase Agreement, all Class A and Class B warrants were replaced with an aggregate of 261,387 pro-rata Class C warrants. The warrants had a strike price of 9.00 per share and a term of five years.

On December 2, 2021, the Company issued additional 49,444 Class C warrants with the terms and conditions stipulated in the September 2021 Amended Unit Purchase Agreement.

On December 21, 2021, pursuant to the December 2021 Exchange Agreements (Note 6) all previously issued Original Class C warrants were replaced with an aggregate of 416,011 pro-rata New Class C warrants with an exercise price of $9.00 per share (unchanged) and a five-year life measured from the date of the December 2021 Exchange Agreements. The decrease in the Unit price also resulted in additional number of New Class C Warrants being issued in exchange for the Original Class C Warrants due to the 200% warrant coverage provided for in the Unit Purchase Agreement.

On December 21, 2021, pursuant to the December 2021 Unit Purchase Agreement the Company issued additional 1,714,286 New Class C warrants with an exercise price of $9.00 per share and a term of five years.

The detachable warrants issued were accounted for as an equity instrument and were ascribed an aggregate fair market value of $4,447,982 using the residual fair value allocation method.

Other Warrants

 
During the year ended December 2021, the Company issued warrants for the purchase of an aggregate of 57,499 shares of common stock for a settlement and services rendered. The warrants issued have an average strike price of $5.56 per share and an average term of 4.74 years, were fair valued at $368,287 and recorded in professional fees and salary expense in the onsolidated Statements of Operations for the year ended December 31, 2021.

During the year end December 31, 2020, the Company issued the following:

On July 31, 2020, the Company completed the Somah Acquisition (Note 2) whereas 2,500,000 shares of common stock and 749,984 warrants were issued. The warrants have a strike price of $20.00 per share and a term of five years. The valuation of the warrants granted was completed during the year ended December 31, 2021, and the fair market value was determined to be $1.60 per share or $1,200,000.

On September 25, 2020, the Company issued two warrants for services. The warrants were to purchase 42,002 and 28,001 shares with a strike price of $5.50 and a term of five years. The fair market value was determined to be $3.625 per share or $152,249 and $101,500, respectively, or $253,749, collectively.

f) Stock-based compensation

During the year ended December 31, 2021, the Company recorded $865,111 in non-cash share-based compensation (2020 - $1,833,292). Additionally, the Company recognized $33,333 of stock-based compensation on restricted common stock in the year ended December 31, 2021.