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Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stockholders' Equity

Note 9. Stockholders’ Equity

During the three months ended March 31, 2020, we issued 550,000 options to purchase our common stock to employees and 96,899 options to a Board Member. The exercise price of the options were $0.37 per share, with both cliff and graded vesting over 3 years, and are exercisable for a period of 8 years.

The fair value of the options issued ($129,600, 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)			70.29%-77.19	%
Risk Free interest rate			1.61%-2.78	%
Dividend yield (on common stock)			-

The shares of our common stock were valued at the trading price on the date of grant, $0.38 per share

During the same period, we cancelled 30,000 options to purchase our common stock and 458,667 options expired.

During the first quarter of 2020, the Company settled certain Executive Deferred Compensation payments with the issuance of 1,573,988 warrants. The fair value of the warrants totaled $251,837. The total executive Deferred Compensation that was settled with the issuance of the warrants was $167,892. The difference between the fair value of the warrants and the Executive Deferred Compensation settled of $83,945 was recorded as stock-based compensation during the three months ended March 31, 2020.

The total amount of equity-based compensation included in additional paid in capital was $138,712 and $136,941 for the three-months ended March 31, 2020 and 2019, respectively.

The following is a summary of outstanding stock options issued to employees and directors as of March 31, 2020:

		Number of Options				Exercise price per share $				Average remaining term in years				Aggregate intrinsic value at date of grant $
Outstanding January 1, 2020			7,197,024				.40 - .87				4.55				-
Issued			646,899				.37				7.77				-
Cancelled/Expired			(488,667	)
Outstanding March 31, 2020			7,355,256				.37 - .87				4.38				-

Exercisable, March 31, 2020			3,831,550				.40 - .87				3.32				-

The following is Changes in Stockholders’ Equity as of March 31, 2019 and March 31, 2020:

										Additional
		Common Stock								paid in				Accumulated
		Shares				Amount				Capital				(Deficit)				Total

Balance January 1, 2019			122,770,960			$	123			$	41,118,649			$	(41,153,820	)		$	(35,048	)
Exercise of warrants			3,141,454				3				1,884,869								1,884,872
Issuance of stock for services			173,446				-				181,040				-				181,040
Equity based compensation			-				-				136,941				-				136,941
Warrants issued to Management			-				-				758,754				-				758,754
Issuance of stock for capital raise			4,000,000				4				2,399,996				-				2,400,000
Warrant modification			-				-				307,460				-				307,460
Net (loss) for the year			-				-				-				(2,847,262	)			(2,847,262	)
Balance March 31, 2019			130,085,860			$	130			$	46,787,709			$	(44,001,032	)		$	2,786,807

										Additional
		Common Stock								paid in				Accumulated
		Shares				Amount				Capital				(Deficit)				Total

Balance January 1, 2020			130,341,737			$	130			$	47,030,716				(46,747,122	)		$	283,724
Issuance of stock for capital raise, net of offering costs of $27,200			7,650,000				8				3,797,792				-				3,797,800
Conversion of debt			4,623,615				5				1,313,757				-				1,313,762
Interest paid in shares			632,251				-				379,350				-				379,350
Issuance of stock for services			-				-				12,500				-				12,500
Equity based compensation			-				-				138,712				-				138,712
Warrants issued to management			-				-				167,892				-				167,892
Warrant Modification			-				-				18,899				-				18,899
Warrant issued for note extension			-				-				75,184				-				75,184
Net (loss) for the year			-				-				-				(743,066	)			(743,066	)
Balance March 31, 2020			143,247,603			$	143			$	52,934,802				(47,490,188	)		$	5,444,757

On March 20, 2020, the Company completed additional funding, including a Private Placement Offering for common shares priced at $0.50 per share (subject to adjustment) in the amount of $3.825 million and the issuance of 7,650,000 shares. Of the $3.825 million, $2.35 million is held in escrow and the remaining $1.5 million was due as offering proceeds receivable as of March 31, 2020. The $3.825 million was received and collected in April 2020. The investors of this Private Placement Offering will be granted O warrants to be eligible to purchase an additional 0.50 shares for every share issued to each purchaser, exercisable for a period of 3 years at an exercise price of $0.60 per share (subject to adjustment). If the volume-weighted average trading price for the 20 consecutive trading days that conclude upon 6 months after the initial closing (the “Six Month Price”) exceeds or equals $0.50 per share (the “Target Price”), the per share purchase price will not be adjusted. If the Six Month Price is less than the Target Price, the per share purchase price will be automatically reduced to the Six Month Price, but in no event less than $0.35 per share, in which case the Company shall issue to each investor, pro-rata based on such investor’s investment: (a) shares in a quantity that equals the difference between the number of shares issued to such purchaser at closing and the number of shares that would have been issued to such purchaser at closing at the Six Month Price; and (b) a warrant for a number of shares of common stock equal to 50% of the difference between the number of shares issued to such investor at closing and the number of shares that would have been issued to such investor at closing at the Six Month Price, with an exercise price equal to the sum of $0.10 per share and the Six Month Price, but in no eventless than $0.45 per share. The exercise price per share for each warrant will automatically adjust to the sum of $0.10 per share and the Six-Month Price, but in no event less than $0.45 per share