Equity

6 Months Ended

Jun. 30, 2022

Note 11 – Equity

Reverse stock split

On June 11, 2021, the Company’s Board of Directors approved a 1-for-3 reverse stock split of the Company’s common stock. On July 27, 2021, the Company filed a Certificate of Change with the State of Nevada (the “Certificate”) to effect the 1-for-3 reverse stock split of the Company’s authorized shares of common stock, par value $0.001 (the “Common Stock”), accompanied by a corresponding decrease in the Company’s issued and outstanding shares of Common Stock (the “Reverse Stock Split”), effective upon filing. Following the Reverse Stock Split, the number of authorized shares of Common Stock was reduced from 1,000,000,000 to 333,333,333.

Issuance of restricted common stock

On July 13, 2018, the Board of Directors of the Company approved the grant of 766,668 restricted stock units (the “RSUs”) to three employees of the Company, pursuant to the Merion, Inc. 2018 Omnibus Equity Plan. The RSUs vested 30% each on July 13, 2019 and 2020 and the remaining 40% of the RSUs vested on July 13, 2021, in each case provided that the employee remains employed, in good standing, by the Company. These shares were valued at $851,000, determined using the closing price of the Company’s common stock on July 13, 2018 of $1.11 per share, and were being amortized ratably over the term of the vesting period of three years on a straight line basis. The Company accounts for the restricted common stock as equity-settled awards in accordance with ASC 718. For the three months ended June 30, 2022 and 2021, amortization of deferred stock compensation of these shares amounted to $0 and $84,867, respectively. For the six months ended June 30, 2022 and 2021, amortization of deferred stock compensation of these shares amounted to $0 and $168,801, respectively.

Although the RSUs were fully vested in July 2021, the Company has not instructed the transfer agent to issue the shares of common stock. However, the 766,668 shares of common stock to be issued are being shown as outstanding as of July 13, 2021 through June 30, 2022 for financial statement purposes.

The following table summarizes unvested restricted common stock activity for the six months ended June 30, 2022 and for the year ended December 31, 2021:

	Number of shares		Weighted average grant-date fair value per share
Outstanding as of December 31, 2020		306,668	$	1.11
Granted		-		-
Vested		306,668		-
Forfeited		-		-
Outstanding as of December 31, 2021		-		-
Granted		-		-
Vested		-		-
Forfeited		-		-
Outstanding as of June 30, 2022		-	$	-

Merion, Inc. 10-Q