Quarterly report pursuant to Section 13 or 15(d)

Capital Stock

v3.20.2
Capital Stock
6 Months Ended
Jun. 30, 2020
Stockholders' Equity Note [Abstract]  
Capital Stock

NOTE 14 - Capital Stock

 

  1) Preferred Stock:

 

The Company is authorized to issue 50,000,000 shares of preferred stock, with par value of $0.001. As of June 30, 2020, there were no preferred stock shares outstanding. The Board of Directors has the authority to issue preferred stock in one or more series, and in connection with the creation of any such series, by resolutions providing for the issuance of the shares thereof, to determine dividends, voting rights, conversion rights, redemption privileges and liquidation preferences.

 

  2) Common Stock:

 

The Company is authorized to issue 90,000,000 shares of common stock, reflecting a reverse split in the ratio of 1 for 5 effective January 16, 2019, with par value of $0.001.

 

On February 13, 2017, all of Aircom's 5,513,334 restricted shares were converted to 2,055,947 shares of Aerkomm's restricted stock at the ratio of 2.681651 to 1, pursuant to the Exchange Agreement (see Note 1). As of June 30, 2020 and December 31, 2019, the restricted shares consisted of the following:

 

    June 30,
2020
    December 31,
2019
 
    (Unaudited)        
Restricted stock - vested     1,802,373       1,802,373  
Restricted stock - unvested     149,162       149,162  
Total restricted stock     1,951,535       1,951,535  

 

The unvested shares of restricted stock were recorded under a deposit liability account awaiting future conversion to common stock when they become vested. 

 

  3) Stock Warrant:

 

The Company has entered into a service agreement which provides for the issuance of warrants to purchase shares of its common stock to a service provider as payment for services. The warrants allow the service provider to purchase a number of shares of Aerkomm common stock equal to the service fee value divided by 85% of the share price paid by investors for Aerkomm's common stock in the first subsequent qualifying equity financing event, at an exercise price of $0.05 per share. For the Six-month periods ended June 30, 2020 and 2019, Aerkomm has not issued additional stock warrants to the service provider as payment for additional services. As of June 28, 2019, these warrants are equivalent to 4,891 shares of the Company's common stock. On June 29, 2019, the Company settled with the service provider to cancel all these warrants with $75,000 in three installments payable on July 3, August 1, and September 1, 2019 and all three installments were paid on schedule.

 

In connection with the Underwriting Agreement with Boustead Securities, LLC, or Boustead, the Company agreed to issue to Boustead warrants to purchase a number of the Company's shares equal to 6% of the gross proceeds of the public offering, which shall be exercisable, in whole or in part, commencing on April 13, 2018 and expiring on the five-year anniversary at an initial exercise price of $53.125 per share, which is equal to 125% of the offering price paid by investors. As of December 31, 2019, the Company issued total warrants to Boustead to purchase 77,680 shares of the Company's stock.  For the six-month periods ended June 30, 2020 and 2019, the Company recorded an increase of $389,300 and a decrease of $336,567, respectively, in additional paid-in capital as adjustment for the issuance costs of these stock warrants.