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Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Stockholders' Equity

Note 10. Stockholders’ Equity

During the six months ended June 30, 2020, we issued 850,000 options to purchase our common stock to employees and 96,899 options to a Board Member. The exercise price of the options was $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 ($209,700, 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)			73.36%-75.82	%
Risk Free interest rate			0.30%-1.61	%
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

For the six months ended June 30, 2020, 625,423 options expired or were cancelled.

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 six months ended June 30, 2020.

The total amount of equity-based compensation included in additional paid in capital was $55,812 and $134,607 for the three-months ended June 30, 2020 and 2019, respectively. The total amount of equity-based compensation included in additional paid in capital was $194,524 and $271,548 for the six-months ended June 30, 2020 and 2019, respectively.

The following is a summary of outstanding stock options issued to employees and directors as of June 30, 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			946,899				.37				7.77				-
Cancelled/Expired			(625,423	)
Outstanding June 30, 2020			7,575,256				.37 - .87				4.38				-

Exercisable, June 30, 2020			3,944,901				.40 - .87				3.32				-

The following is Changes in Stockholders’ Equity as of June 30, 2019 and June 30, 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			173,406				-				181,039				-				181,040
Equity based compensation			-				-				271,548				-				271,548
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			-				-				-				(3,421,178	)			(3,421,178	)
Balance June 30, 2019			130,085,820			$	130			$	46,922,315			$	(44,574,998	)		$	2,347,447

										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			4,770,030				5				1,333,757				-				1,333,762
Interest paid in shares			632,251				-				379,350				-				379,350
Issuance of stock for services			27,601				-				25,000				-				25,000
Equity based compensation			-				-				194,524				-				194,524
Warrants issued to management			-				-				167,892				-				167,892
Warrant Modification			-				-				18,899				-				18,899
Warrant issued for note extension			-				-				75,184				-				75,184
Restricted stock issuance			121,527				-				-				-				-
Net (loss) for the year			-				-				-				(1,922,586	)			(1,922,586	)
Balance June 30, 2020			143,543,146			$	143			$	53,023,114			$	(48,669,708	)		$	4,353,549

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. 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