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STOCKHOLDERS' EQUITY | 3 Months Ended
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Mar. 31, 2020
STOCKHOLDERS' EQUITY |
STOCKHOLDERS' EQUITY | NOTE 8 — STOCKHOLDERS’ EQUITY Preferred stock As of March 31, 2020 and December 31, 2019, the Company had 105,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) outstanding, which was issued at $10 per share, paying a 5% cumulative annual dividend, and convertible into the Company’s common stock at a price of $4.385 per share. For the three months ended March 31, 2020, preferred stockholders collectively earned, but were not paid, approximately $13,000 in quarterly dividends, which is equivalent to 2,985 shares of common stock based on a conversion price of $4.385 per share. As of March 31, 2020 and December 31, 2019, cumulative and unpaid dividends were approximately $258,000 and approximately $245,000, respectively, which is equivalent to 58,912 and 55,927 shares of common stock, respectively, based on a conversion price of $4.385 per share. On any matter presented to the stockholders of the Company, holders of Preferred Stock are entitled to cast the number of votes equal to the number of shares of common stock into which their shares of Preferred Stock are convertible as of the record date to vote on such matter. As long as any shares of Preferred Stock are outstanding, the Company has certain restrictions on share repurchases or amendments to the Certificate of Incorporation in a manner that adversely affects any rights of the Preferred Stockholders. In addition, the preferred stockholders have a liquidation preference for purposes of which the Preferred Stock would be valued at $10 per share plus accrued cumulative annual dividends. At March 31, 2020 and December 31, 2019, the liquidation preference was valued at approximately $1,308,000 and approximately $1,295,000, respectively. In the event of any liquidity event, holders of each share of Preferred Stock shall be entitled to be paid out of the assets of the Company legally available before any sums shall be paid to holders of common stock. Common stock As of March 31, 2020 and December 31, 2019, the Company had 8,876,553 shares of common stock issued and outstanding. During the three months ended March 31, 2020, the Company did not issue any shares of its common stock of the Company upon the exercise of options or warrants. Options As of March 31, 2020 and December 31, 2019, the Company had outstanding options to purchase 923,653 and 965,043 shares of common stock, respectively.
|  |  |  |  |  |  | Weighted |  |  |  | Intrinsic
|  |  |  | Weighted |  | Average |  |  |  | Value
|  | Number of |  | Average |  | Remaining |  |  |  | of
|  | Options |  | Exercise Price |  | Term |  | Exercisable |  | Options
Outstanding at December 31, 2019 |  | 965,043 |  | $ | 3.70 |  | 3.01 |  | 759,631 |  | $ | 1,666,266
Granted |  | — |  |  | — |  | — |  | — |  |  | —
Exercised |  | — |  |  | — |  |  |  |  |  |  |
Forfeited/Expired |  | (41,390) |  |  | 10.99 |  |  |  |  |  |  |
Outstanding at March 31, 2020 |  | 923,653 |  | $ | 3.38 |  | 2.89 |  | 742,345 |  | $ | 1,498,979
During the three months ended March 31, 2020, there were no stock options granted or exercised. Option grants historically were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of, expected volatility, risk free interest rate, and expected dividend yield. For the three months ended March 31, 2020 and 2019, total stock-based compensation expense related to the options totaled approximately $85,000 and $72,000, respectively. The outstanding unamortized stock-based compensation expense related to options was approximately $700,000 (which will be recognized through December 2022) as of March 31, 2020. Warrants Below is a table summarizing the Company’s outstanding warrants as of March 31, 2020 and December 31, 2019:
|  |  |  |  |  |  | Weighted |  | Intrinsic
|  |  |  | Weighted |  | Average |  | Value
|  | Number of |  | Average |  | Remaining |  | of
|  | Warrants |  | Exercise Price |  | Term |  | Warrants
Outstanding at December 31, 2019 |  | 424,708 |  | $ | 5.31 |  | 0.82 |  | $ | 189,450
Granted |  | — |  |  | — |  | — |  |  | —
Exercised |  | — |  |  | — |  |  |  |  |
Forfeited/Expired |  | (22,188) |  |  | 9.59 |  |  |  |  |
Outstanding at March 31, 2020 |  | 402,520 |  | $ | 5.07 |  | 0.61 |  | $ | 130,400
For the three months ended March 31, 2020 and 2019, the Company incurred warrant-based compensation expense of $0. There was no outstanding unamortized stock-based compensation expense related to warrants as of March 31, 2020. Restricted stock units (“RSUs”) The following table summarizes the restricted stock unit activity for the three months ended March 31, 2020:
Restricted stock units issued as of December 31, 2019 |  | 428,919
Granted |  | 15,000
Forfeited/Canceled |  | (25,000)
Total Restricted stock units issued at March 31,2020 |  | 418,919
Vested at March 31, 2020 |  | 253,794
Unvested restricted stock units as of March 31, 2020 |  | 165,125
For the three months ended March 31, 2020 and 2019, the Company incurred RSU-based compensation expense of approximately $170,000 and $377,000, respectively. The outstanding unamortized stock-based compensation expense related to RSUs was approximately $591,000 (which will be recognized through December 2022) as of March 31, 2020. In January 2020, the Company granted awards of 10,000 RSUs and 5,000 RSUs to a consultant to the Company in accordance with a consulting agreement. The vesting of each award is subject to (i) a performance condition based on the extent to which established performance milestones are achieved within a specified timeframe as determined and certified by the Compensation Committee of the Board of Directors and (ii) continuing service within the Company through the one-year anniversary of the grant date. The settlement date for such RSUs, to the extent they vest is the earlier of (a) promptly after the vesting date or (b) in any event no later than March 15 of the calendar year following the calendar year in which such vesting occurs. The fair value of the RSUs at the date of grant was approximately $80,000.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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