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Stock-Based Compensation
 9 Months Ended
Sep. 30, 2020
Compensation Related Costs [Abstract]  
Stock-Based Compensation

Note 7. Stock-Based Compensation

 

The Company has granted options/warrants to consultants. GAAP requires that all stock-based compensation be recognized as an expense in the financial statements and that such costs be measured at the fair value of the award at the date of grant. These awards generally vest ratably over 12 to 60 months from the date of grant and the Company charges to operations quarterly the current market value of the options using the Black-Scholes method. During the three and nine months ended September 30, 2020 and 2019, there were no charges related to options granted to consultants.

 

During the nine-month period ended September 30, 2020, the Company did not grant options to employees or directors. During the nine-month period ended September 30, 2019, the Company granted 233,500 fully vested options to employees and directors and recorded stock-based compensation of $356,228. All of the options granted to employees during the nine-month period ended September 30, 2019 occurred during the second quarter of 2019. The Company valued these grants using the Black-Scholes option pricing model with the following assumptions:

 

Fair value on grant date   $ 1.5256  
Expected dividend yield     -  
Expected volatility     61 %
Risk free interest rate     1.84 %
Expected term of the option     5 years  

 

There was no compensation expense recorded relating to restricted stock grants to employees and directors during the three and nine months ended September 30, 2020 and 2019.

 

As of September 30, 2020, there were 882,500 shares available for future grant under our 2019 Equity Incentive Plan, which was approved by the Company’s shareholders in June 2019.