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Share-Based Compensation
 6 Months Ended
Jun. 30, 2019
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation
13. Share-Based Compensation

 

On April 30, 2015, the Company entered into a Non-qualified Stock Option Agreement with Sophie Pibouin, a director of the Company, in accordance with the 2015 Plan. The agreement granted options to purchase 128,000 shares prior to the expiration date of April 29, 2025 at an exercise price of $0.75. The options granted vested on a graded scale over a period of time through October 31, 2015.

 

On April 30, 2015, the Company entered into a Non-qualified Stock Option Agreement with Murray Gross, a director of the Company, in accordance with the 2015 Plan. The agreement granted options to purchase 640,000 shares prior to the expiration date of April 29, 2025 at an exercise price of $0.75. 400,000 of the options granted immediately vested on the date of grant, and the remaining 240,000 options granted would have vested upon the date at which the Company first reports two consecutive fiscal quarters with revenues of One Million Dollars ($1,000,000) each. The unvested options were not exercisable after the director’s termination of continuous service, which occurred on September 30, 2017.

 

On January 1, 2016, the Company granted employees stock options to purchase 250,000 shares at an exercise price of $0.90 per share in accordance with the 2015 Plan, with vesting continuing until 2019. The total fair value of $196,250 for these stock options was recognized by the Company over the applicable vesting period.

 

On February 10, 2016, the Company granted employees stock options to purchase 210,000 shares at an exercise price of $0.96 per share in accordance with the 2015 Plan, with vesting continuing until 2020. The total fair value of $174,748 for these stock options is being recognized by the Company over the applicable vesting period.

 

On December 6, 2016, the Company granted one employee stock options to purchase 100,000 shares at an exercise price of $0.76 per share in accordance with the 2015 Plan, with vesting continuing until 2020. The total fair value of $63,937 for these stock options is being recognized by the Company over the applicable vesting period.

 

On March 15, 2017, the Company granted one employee stock options to purchase 100,000 shares at an exercise price of $0.85 per share in accordance with the 2015 Plan, with vesting continuing until 2020. The total fair value of $70,872 for these stock options would have been recognized by the Company over the applicable vesting period. These options were forfeited during 2017 upon the termination of the employee.

 

On September 25, 2017, the Company granted an employee stock options to purchase 750,000 shares at an exercise price of $0.30 per share and 500,000 shares at an exercise price of $0.38 per share, in accordance with the 2015 Plan, with vesting continuing until September 2019. The total fair value of $321,011 for these stock options is being recognized by the Company over the applicable vesting period.

 

On January 30, 2019, the Company entered into a Non-qualified Stock Option Agreement with an individual consultant to the Company, in accordance with the 2015 Plan. The agreement granted options to purchase 12,500 shares prior to the expiration date of December 31, 2025 at an exercise price of $0.90. The options granted were 100% vested as of the grant date.

 

On March 11, 2019, the Company canceled previously granted stock options to employees in the following amounts: 150,000 shares at an exercise price of $0.90 per share; 160,000 shares at an exercise price of $0.96 per share; 100,000 shares at an exercise price of $0.76 per share; 750,000 shares at an exercise price of $0.30 per share; and 500,000 shares at an exercise price of $0.38 per share. On March 11, 2019, the Company replaced those canceled stock options exercisable for a total of 1,660,000 shares with virtually identical stock options at an exercise price of $0.13 per share in accordance with the 2015 Plan. The incremental fair value of $24,898 for these stock options is being recognized by the Company over the applicable vesting periods, from September 2019 through December 2020.

 

On March 11, 2019, the Company granted employees stock options to purchase 505,000 shares at an exercise price of $0.13 per share in accordance with the 2015 Plan, with vesting continuing until 2023. The total fair value of $44,591 for these stock options is being recognized by the Company over the applicable vesting period.

 

The weighted average estimated values of director and employee stock option grants, as well as the weighted average assumptions that were used in calculating such values during the six months ended June 30, 2019 and 2018, were based on estimates at the date of grant as follows:

 

   April 30,   January 1,   February 10, 
   2015 Grant   2016 Grant   2016 Grant 
Risk-free interest rate   1.43%   1.76%   1.15%
Weighted average expected term   5 years    5 years     5 years 
Expected volatility   143.10%   134.18%   132.97%
Expected dividend yield   0.00%   0.00%   0.00%

 

   December 6,   March 15,   September 25, 
   2016 Grant   2017 Grant   2017 Grant 
Risk-free interest rate   1.84%   2.14%   1.85%
Weighted average expected term   5 years    5 years     5 years 
Expected volatility   123.82%   121.19%   130.79%
Expected dividend yield   0.00%   0.00%   0.00%

 

   January 30,   March 11, 
   2019 Grant   2019 Grant 
Risk-free interest rate   2.54%   2.44%
Weighted average expected term   5 years    5 years  
Expected volatility   115.80%   116.46%
Expected dividend yield   0.00%   0.00%

 

A summary of stock option activity during the six months ended June 30, 2019 and 2018 is as follows:

 

           Weighted-     
       Weighted-   Average     
   Shares   Average   Remaining   Aggregate 
   Under   Exercise   Contractual   Intrinsic 
   Option   Price   Life   Value 
Outstanding at January 1, 2018   2,238,000   $0.55    9 years    79,200 
                     
Outstanding at June 30, 2018   2,238,000   $0.55    8 years   $79,200 
                     
Exercisable at June 30, 2018   1,251,750   $0.63    8 years   $79,200 

 

           Weighted-     
       Weighted-   Average     
   Shares   Average   Remaining   Aggregate 
   Under   Exercise   Contractual   Intrinsic 
   Option   Price   Life   Value 
Outstanding at January 1, 2019   2,238,000   $0.55    8 years    79,200 
Granted   2,177,500    0.13           
Forfeited and expired   (1,672,500)   0.86           
                     
Outstanding at June 30, 2019   2,743,000   $0.26    9 years   $79,200 
                     
Exercisable at June 30, 2019   1,991,750   $0.313    9 years   $79,200 

 

The weighted-average grant date fair value of options granted during the six months ended June 30, 2019 was $0.09. There were no grants during the six months ended June 30, 2018.

 

As of June 30, 2019, and December 31, 2018, there was $131,506 and $185,754, respectively, of total unrecognized compensation costs related to stock options granted under our stock option agreements. The unrecognized compensation cost is expected to be recognized over a weighted-average period of two years. The total fair value of stock options that vested during the six months ended June 30, 2019 and 2018 was $91,723 and $152,788, respectively.