The Company’s amended and restated certificate of incorporation filed on December 14, 2017, authorizes the Company to issue 10,000,000 shares of preferred stock and 50,000,000 shares of common stock.

On June 23, 2020, the Company awarded 412,125 stock options to a member of senior management. The awards contain a market condition whereby the awards will vest based on increases in the stock price measured at June 30 and December 31 over the three year period following the grant date. The awards will become fully vested when the stock price meets or exceeds $5.50 per share on any measurement date.

A summary of stock option activity under each of the Company’s stock option plans during the nine months period ended September 30, 2020:

	Stock Options Outstanding
	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at January 1, 2020		1,686,444		$	1.30		4.22	$	1,535,987
Granted		432,125		$	2.71
Forfeited / Cancelled		(38,197	)	$	2.51
Exercised		(744,951	)	$	0.87
Outstanding at September 30, 2020		1,335,421		$	1.81		6.66	$	616,432
Exercisable at September 30, 2020		845,649		$	1.53		5.01	$	616,323
Vested and expected to vest at September 30, 2020		1,320,728		$	1.81		6.63	$	616,429

The following table presents details of the assumptions used to calculate the weighted-average grant date fair value of common stock options granted by the Company:

	For the Nine Months Ended September 30,
	2020			2019
Expected term (in years)	5.04			4.65 - 5.87
Expected volatility	43.5 - 47.80%			43.7 - 44.4%
Risk-free interest rate		0.33	%	2.49 - 2.55%
Weighted average grant date fair value per share	$	0.83		$	1.07
Grant date fair value of options vested	$	545,388		$	574,524
Intrinsic value of options exercised	$	917,625		$	551,134

As of September 30, 2020, the amount of unearned stock-based compensation estimated to be expensed from 2020 through 2025 related to unvested common stock options is $370,072, net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 2.38 years.

If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense or calculate and record additional expense. Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that the Company grants additional common stock options or other stock-based awards.

Restricted stock units may be granted at the discretion of the compensation committee of the Board of Directors under the Company’s 2017 Equity Incentive Plan that was adopted on October 10, 2017 (the “2017 Plan”) in connection with the hiring and retention of personnel and are subject to certain conditions. Restricted stock units generally vest quarterly or semi-annually over a period of one to three years and are typically forfeited if employment is terminated before the restricted stock unit vest. The compensation expense related to the restricted stock units is calculated as the fair value of the common stock on the grant date and is amortized to expense over the vesting period and is adjusted for estimated forfeitures.

The Company’s restricted stock unit activity for the nine months ended September 30, 2020 is as follows:

	Restricted Stock Units
	Number of Shares			Weighted Average Grant Date Fair Value
Unvested at January 1, 2020		216,670		$	3.02
Granted		554,251		$	2.51
Vested		(148,751	)	$	3.15
Cancelled		(38,333	)	$	2.41
Unvested at September 30, 2020		583,837		$	2.54

As of September 30, 2020, there was $1,048,715 of unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted average period of 2.42 years.

Stock-based compensation expense for the three and nine month periods ended September 30, 2020 and 2019 was comprised of the following:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
Stock-based compensation classified as:	2020		2019		2020		2019
General and administrative	$	171,636	$	120,188	$	373,667	$	357,679
Production		15,118		18,140		50,856		52,131
Marketing and selling		15,696		15,011		50,062		44,472
Research and development		7,830		11,518		28,834		35,858
	$	210,280	$	164,857	$	503,419	$	490,140

The following table summarizes the Company’s warrant activity during the nine months ended September 30, 2020:

	Number of Warrants			Weighted Average Exercise Price
Warrants outstanding – January 1, 2020		630,947		$	4.16
Warrants granted		-		$	-
Warrants exercised		(78,948	)	$	0.76
Warrants outstanding – September 30, 2020		551,999		$	4.65