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EQUITY COMPENSATION | 9 Months Ended
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Sep. 30, 2021
Share-Based Payment Arrangement [Abstract] |
EQUITY COMPENSATION | 7. EQUITY COMPENSATION The Company accounts for the issuance of equity awards to employees in accordance with ASC Topic 718, which requires that the cost resulting from all equity payment transactions be recognized in the financial statements. This pronouncement establishes fair value as the measurement objective in accounting for equity payment arrangements and requires all companies to apply a fair value based measurement method in accounting for all equity payment transactions with employees. All equity compensation is included in operating expenses for the periods as follows: SCHEDULE OF STOCK BASED COMPENSATION
|  | Three Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Compensation cost recognized: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling, general & administrative |  | $ | 613,667 |  |  | $ | 3,130,905 |  |  | $ | 5,536,418 |  |  | $ | 3,307,152 |
Research & development |  |  | 98,401 |  |  |  | 8,646 |  |  |  | 470,025 |  |  |  | 22,151 |
Share-based compensation expenses |  | $ | 712,068 |  |  | $ | 3,139,551 |  |  | $ | 6,006,443 |  |  | $ | 3,329,303 |
Stock Options The Company uses the Black-Scholes option pricing model to value the options on the grant date. For the awards which were modified and are no longer classified as equity awards, the Company uses the share price as of each reporting period to calculate the fair value of the options. The table below presents the weighted average expected life of the options in years. The expected life computation is based on the time to option expiration. Volatility is determined using changes in historical stock prices. The interest rate for periods within the expected life of the award is based on the U.S. Treasury yield curve in effect at the time of grant. As discussed above, certain option awards no longer qualify as equity awards and instead are classified as liability awards. The fair values of these awards are determined at each reporting period utilizing a Black Scholes option pricing model, and the associated compensation expense for the reporting period is recorded. The Company recorded $3,736,238 of additional compensation expense in the nine months ended September 30, 2021 as a result of this award reclassification. Stock option activity under the 2015 Stock Option Plan (the “Plan”) during the period indicated below were as follows: SCHEDULE OF STOCK OPTION ACTIVITY
|  | Number of Shares Subject to Issuance |  |  | Weighted-average Exercise Price |  |  | Weighted-average Remaining Contractual Term |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2020 |  |  | 637,882 |  |  | $ | 2.50 |  |  |  | 2.55 years |  |  | $ | 5,686,421 |
Granted |  |  | 221,843 |  |  |  | 10.38 |  |  |  |  |  |  |  |  |
Exercised |  |  | (357,301 | ) |  |  | 2.34 |  |  |  |  |  |  |  |  |
Outstanding at September 30, 2021 |  |  | 502,424 |  |  | $ | 6.09 |  |  |  | 3.25 years |  |  | $ | 1,548,558 |
Exercisable at September 30, 2021 |  |  | 135,859 |  |  | $ | 2.72 |  |  |  | 2.14 years |  |  | $ | 743,173 |
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on September 30, 2021. This amount changes based upon the fair market value of the Company’s stock. Restricted Stock Units The Company issues Restricted Stock Units (“RSUs”) which are equity-based instruments that may be settled in shares of common stock of the Company. During the nine months ended September 30, 2021, the Company issued RSUs to its officers and certain employees and to certain directors as compensation. RSU agreements can vest immediately or with the passage of time. The vesting of all RSUs is contingent on continued board and employment services. The compensation expense incurred by the Company for RSUs is based on the closing market price of the Company’s common stock on the date of grant and is amortized ratably on a straight-line basis over the requisite service period and charged to general and administrative expense with a corresponding increase to additional paid-in capital. SCHEDULE OF RESTRICTED STOCK UNITS OUTSTANDING
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2020 |  |  | 1,754 |  |  | $ | 11.40 |  |  | $ | - |
Granted |  |  | 428,831 |  |  |  | 10.49 |  |  |  |  |
Vested and settled in shares |  |  | (17,278 | ) |  |  | 8.68 |  |  |  |  |
Forfeited |  |  | (4,650 | ) |  |  | 11.50 |  |  |  |  |
Outstanding at September 30, 2021 |  |  | 408,657 |  |  | $ | 10.56 |  |  | $ | 7,905 |
Performance Stock Units On August 7, 2020, the Company issued 265,942 Performance Stock Units (PSUs) to its officers and certain employees as compensation. For these PSU agreements, 50% vest based on the Company’s market price and 50% vest based on its Adjusted EBITDA performance metric. Both the conditions are to occur over a passage of a specified time and is contingent on continued employment services. For the market condition, compensation expense is based on a Geometric Brownian Motion valuation model based on the closing market price of the Company’s common stock on the date of grant and is amortized ratably on a straight-line basis over the requisite period. For the performance condition, the Company reviews the probability of achieving this goal on a periodic basis. If the Company determines that it is probable that the performance criteria will be achieved, the amount of compensation cost derived for this performance metric is amortized over the anticipated service period. If these criteria are not met, no compensation cost is recognized and any previously recognized compensation cost would be reversed. For both conditions, compensation expense is charged to selling, general and administrative and research and development expense with a corresponding increase to additional paid-in capital. SCHEDULE OF PERFORMANCE STOCK UNITS
|  | Number of Shares |  |  | Weighted Average Grant Date Fair Value |  |  | Aggregate Intrinsic Value |
Outstanding at December 31, 2020 |  |  | 265,942 |  |  | $ | 7.91 |  |  | $ | - |
Forfeited |  |  | (37,444 | ) |  |  | 7.91 |  |  |  |  |
Outstanding at September 30, 2021 |  |  | 228,498 |  |  | $ | 7.91 |  |  | $ | - |
As of September 30, 2021, there was $4,712,464 of total unrecognized compensation cost, net of estimated forfeitures, related to all unvested stock options, RSUs and PSUs, which is expected to be recognized over a weighted average period of approximately 2.25 years. The Company had 1,467,554 shares available for future grants under the Plan at September 30, 2021. Warrants All previously granted warrants were issued with an exercise price that was equal to or above the fair market value of the Company’s common stock on the date of grant. As of September 30, 2021, the Company had no remaining warrants available to exercise. During the nine months ended September 30, 2021, there were 9,000 warrants exercised at an exercise price of $2.20 per share.

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