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Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders' Equity

Note 9. Stockholders’ Equity

During the year ended December 31, 2018, we issued 180,265 shares of common stock, valued at $90,167 for services. We also issued 183,240 shares of our common stock, with a value of $100,000, to certain members of our Board of Directors in lieu of cash payments for Director fees. Also, we have 786,890 shares issued in connection with formerly issued restricted stock grants that vested during 2018. In addition, we issued 227,111 options to purchase our common stock to certain members of the Board of Directors in lieu of cash payments for Director fees, valued at $100,000. The exercise price of the options ranged from $0.50 to $0.595 per share, vest immediately, and are exercisable for periods of 8 years. In addition, we issued 1,315,000 options to purchase our common stock to employees and executives. The exercise price of the options is $0.52 per share, vest after 3 years, and are exercisable for periods of 8 years.

The fair value of the options issued ($543,550, in the aggregate) was calculated using the Black-Sholes option pricing model, based on the criteria shown below.

Expected life (in years)			5.5 to 8
Volatility (based on a comparable company)			59.82%-70.29	%
Risk Free interest rate			2.78%-2.93	%
Dividend yield (on common stock)			-

During the year ended December 31, 2019, we issued 282,944 shares of common stock, valued at $169,040 for services. We also issued 91,653 shares of our common stock, with a value of $50,000, to a member of our Board of Directors in lieu of cash payments for Director fees. In addition, we issued 281,343 options to purchase our common stock to certain member of the Board of Directors in lieu of cash payments for Director fees valued at $116,874. The exercise price of the options ranged from $0.47 to $0.65 per share, vest immediately, and are exercisable for periods of 8 years. In addition, we issued 875,000 options to purchase our common stock to employees and executives. The exercise price of the options ranged from $0.45 to $0.73 per share, vest after 3 years, and are exercisable for periods of 8 years.

The fair value of the options issued ($237,850, in the aggregate) was calculated using the Black-Sholes option pricing model, based on the criteria shown below.

Expected life (in years)			5.5 to 8
Volatility (based on a comparable company)			59.82% to 77.19	%
Risk Free interest rate			1.79% to 2.78	%
Dividend yield (on common stock)			-

The shares of our common stock were valued at the trading price on the date of grant, $0.45 and $0.73 per share

During the same period, we cancelled 1,387,333 options to purchase our common stock, which was primarily driven by the resignation of executives.

The Holders of 2,841,454 I warrants elected to exercise those warrant on a cash basis of $1,320,313 and cashless basis of $384,563 to offset convertible note and accrued interest; and received 2,841,454 shares of our common stock.

The Holder of 300,000 G warrants elected to exercise those warrant on a cash basis of $180,000 and received 300,000 shares of our common stock.

During the first quarter of 2019, the Company completed additional funding including a Private Placement Offering for common shares priced at $0.60 per share, resulting in the receipt of proceeds in the amount of $2.4 million and the issuance of 4,000,000 shares.

During the first quarter of 2019, the Company settled certain Executive Deferred Compensation payments with a combination of cash and warrants. The total amount of Deferred Executive compensation settled is $771,113. One-third of that total or $243,623, was paid in cash. The remaining balance of $487,246 was settled by granting the Executives warrants exercisable for five years to purchase the Company’s stock at an exercise price of $0.70 per share.

The total amount of equity-based compensation included in additional paid in capital for the years ended December 31, 2019 and 2018 was 225,026 and $598,768, respectively,

The following is a summary of outstanding stock options issued to employees and directors as of December 31, 2019:

														Aggregate
		Number				Exercise price per				Average remaining term				intrinsic value at date of
		of Options				share $				in years				grant $
Outstanding January 1, 2018			6,715,419				.40 - .87				5.48
Issued			1,542,111				.50 - .60
Cancelled			(321,183	)
Exercised			(508,333	)
Outstanding December 31, 2018			7,428,014				.40 - .87				5.48				-
Issued			1,156,343				.45 - .73
Cancelled			(1,387,333	)
Outstanding December 31, 2019			7,197,024				.40 - .87				4.55

Exercisable, December 31 2019			3,706,606				.40 - .87				3.45				-

As of December 31, 2019, the Company has $967,826 of total unrecognized share-based compensation expense related to unvested options, which is expected to be amortized over the remaining weighted average period of 4.55 years.