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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2021
Equity [Abstract] |
STOCKHOLDERS’ EQUITY | NOTE 8 – STOCKHOLDERS’ EQUITY The Company is authorized to issue 1,000,000,000 shares of common stock. The Company had 23,294,024 and 19,642,401 shares of common stock issued and outstanding as of December 31, 2021 and 2020, respectively. In addition, the Company is authorized to issue 20,000,000 shares of preferred stock but no shares of preferred stock have been issued. Common Stock 2021 Common Stock Transactions
| ● | On August 26, 2021, the Company completed the Offering, pursuant to a Registration Statement on Form S-1, of 1,642,856 shares of its common stock at a public offering price of $7.00 per share, including 214,285 shares sold upon full exercise of the underwriter’s option to purchase additional shares, for gross proceeds of approximately $11.5 million, before deducting underwriting discounts and offering expenses.
| ● | During 2021, convertible notes totaling approximately $6.2 million and a portion of their accrued interest at the option of the noteholders were converted into approximately 1,171,000 shares of common stock of the Company.
| ● | During 2021, the Company issued approximately 756,000 shares of common stock pursuant to cashless exercises of common stock purchase warrants and options, and approximately 81,000 shares of common stock pursuant to exercises of common stock purchase warrants and options for cash.
2020 Common Stock Transactions
| ● | During the year ended December 31, 2020, the Company granted 266,667 shares of Restricted Common Stock of which 100,000 shares were granted to two new members of our Board of Directors in connection with their compensation for service as Board Members and 166,667 to an employee in connection with his employment compensation. The shares were valued at the fair market value at the date of grant. The restricted stock vests upon the achievement of certain performance criteria.
| ● | During the year ended December 31, 2020, the Company issued approximately 3,540 shares of common stock to a third-party provider of services in lieu of cash compensation.
| ● | In June 2020, the Company entered into Subscription Agreements with two accredited investors (the “June 2020 Accredited Investors”) pursuant to which the June 2020 Accredited Investors agreed to purchase 114,719 shares of common stock for $200,000.
| ● | On June 30, 2020, Company entered into and consummated a private transaction pursuant to which a portion of the Company’s $3.00 Warrants were exercised for cash at an exercise price of $2.10 per share. In addition, the holders that exercised the $3.00 Warrants received a $0.15 Warrant for every four $3.00 Warrants exercised. As a result, the Company issued 333,611 shares of common stock and 83,403 $4.50 Warrants in consideration of $700,583.
| ● | On June 30, 2020, Company entered into and consummated a private transaction pursuant to which a portion of the Company’s $1.50 Warrants were exercised for cash. In addition, the holders that exercised the $1.50 Warrants received a $4.50 Warrant for every two $1.50 Warrants exercised. As a result, the Company issued 154,400 shares of common stock and 77,200 $4.50 Warrants, in consideration of $231,600. Separately, certain holders of the $1.50 Warrants to acquire 59,000 shares of common stock exercised on a cashless basis resulting in the issuance of 18,689 shares of common stock.
| ● | On June 30, 2020, Company entered into and consummated a private transaction pursuant to which a portion of the Company’s $1.80 Warrants were exercised. In addition, the holders that exercised the $1.80 Warrants also received $4.50 Warrant for every two $1.80 Warrants exercised. As a result, the Company issued 176,000 shares of common stock and 88,000 $4.50 Warrants in consideration of $316,800.
| ● | On October 30, 2020 and on November 6, 2020, Ipsidy Inc. entered into Securities Purchase Agreements with several accredited investors (the “October 2020 Accredited Investors”) pursuant to which the October 2020 Accredited Investors agreed to purchase approximately 1,748,000 shares of the Company’s common stock together with Warrants to acquire approximately 874,000 shares of common stock for a term of five years at an exercise price of $4.50 per share for an aggregate purchase price of approximately $5.24 million. In connection with this private offering, the Company paid a registered broker-dealer, a cash fee of approximately $367,000 and issue the broker-dealer a common stock purchase warrant to acquire approximately 105,000 shares of common stock of the Company exercisable for a term of five years at an exercise price of $4.50 per share.
| ● | During 2020, the Company issued approximately 56,000 shares of common stock pursuant to cashless exercises of common stock purchase warrants and options, other than the June 2020 warrant exercises.
Warrants
| ● | During 2021, under the terms of the Underwriting Agreement in connection with the Offering, the Company issued underwriters warrants (the “Representative’s Warrants”) to purchase an aggregate of 64,286 shares of common stock (4.5% of the total shares issued in the Offering). The Representative’s Warrants are exercisable at a per share price of $8.75 (equal to 125% of the Offering price of the Company’s common stock). The Representative’s Warrants are exercisable for a term of four and one half years beginning on February 23, 2022.
| ● | During the year ended December 31, 2020, the Company issued approximately 980,000 common stock warrants in connection with its sale of common stock in the 4th quarter of 2020 for a term of five years at an exercise price $4.50 per share. Of the approximate 980,000 shares, approximately 105,000 shares were issued to a broker-dealer in connection with the sale of common stock.
| ● | During the year ended December 31, 2020, the Company issued approximately 250,000 common stock warrants for a term of five years at an average exercise price of $4.50 cents in connection with cash exercises of previously issued warrants. The Company recorded a charge of approximately $367,000 in connection with an inducement to the warrant holders who exercised their outstanding warrants.
| See Common Stock Transaction above for a further description of the warrant issuances.
The following is a summary of the Company’s warrant activity for the years ended December 31, 2021 and 2020:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Life |
Outstanding on January 1, 2020 |  |  | 1,581,774 |  |  | $ | 3.30 |  |  |  | 2.9 Years |
Granted |  |  | 1,227,389 |  |  | $ | 4.50 |  |  |  | 5.0 Years |
Exercised/Cancelled |  |  | (985,896 | ) |  | $ | 2.70 |  |  |  | - |
Outstanding at December 31, 2020 |  |  | 1,823,267 |  |  | $ | 4.20 |  |  |  | 3.4 Years |
Granted |  |  | 64,286 |  |  | $ | 8.75 |  |  |  | 5.0 Years |
Exercised/Cancelled |  |  | (483,943 | ) |  | $ | 3.22 |  |  |  | - |
Outstanding at December 31, 2021 |  |  | 1,403,610 |  |  | $ | 4.61 |  |  |  | 3.0 Years |
Stock Options The Company has adopted the Ipsidy Inc. 2014 Equity Compensation Plan, 2017 Incentive Stock Plan, and the 2021 Equity Incentive Plan. The Company has no other stock options plans in effect as of December 31, 2021. On November 21, 2014, our Board of Directors authorized the Ipsidy Inc. Equity Compensation Plan (the “2014 Plan”). On September 28, 2017, the shareholders of the Company approved the 2017 Incentive Stock Plan (“2017 Incentive Plan”) and on December 29, 2021, the shareholders of the Company approved the 2021 Equity Incentive Plan. (“2021 Plan”). The following is a summary of principal features of the 2014 Plan, the 2017 Incentive Plan, and the 2021 Plan. The summaries, however, does not purport to be a complete description of all the provisions of each plan. The terms of Awards granted under the plans shall be contained in an agreement between the participant and the Company and such terms shall be determined by the Compensation Committee consistent with the provisions of the applicable plan. The terms of Awards may or not require a performance condition in order to vest the equity comprised in the relevant Award. The terms of each Option granted shall be contained in a stock option agreement between the optionee and the Company and such terms shall be determined by the Compensation Committee consistent with the provisions of the applicable plan. The Company has also granted equity awards that have not been approved by security holders. 2021 Stock Option Issuances
| ● | The Company granted Mr. Thimot and Mr. Smith stock options to acquire 1,200,000 and 600,000 shares of common stock respectively upon their employment of which half of the options vest monthly over four years and the balance vest upon the achievement of certain market capitalization thresholds or performance conditions.
| ● | The Company granted each of Mr. Kumnick and Mr. Broenniman stock options to acquire 583,333 shares of common stock that vest upon the achievement of certain market capitalization thresholds or performance conditions. In November 2021 Mr. Kumnick and Mr. Broenniman agreed to cancel 300,000 and 200,000, respectively, of these stock options in consideration of removing certain service conditions.
| ● | The Company granted each of the four new Directors appointed June 2021 (“June Directors”) stock options to acquire 62,500 shares of common stock or a total of 250,000 that vest one third a year after each Annual Meeting. Additionally, the Company added another Director in November 2021 and granted stock options to acquire 29,173 shares of common stock that vest one third a year after each Annual Meeting beginning in 2022. One of the June Directors did not stand for reelection to the Board of Directors in December 2021 and forfeited 41,667 stock options. In December 2021, the Company granted additional options to acquire 10,238 shares of common stock each to five of the non-employee Directors, by way of annual compensation under the Company’s compensation policy for non-employee directors and which vests monthly over a one-year-period.
| ● | The Company granted the previously serving Directors stock options to acquire 93,470 common shares that are vested as the services were rendered. The stock options were granted in lieu of other forms of Board of Director Compensation and was used to eliminate previously accrued Board of Director compensation. The Company also granted to each of Mr. Selzer and Mr. Stern 22,388 stock options to acquire common shares for service in 2021 prior to their resignation as Directors. Upon their resignation as directors in June 2021, 6,997 stock options to each of them were vested and the balance was cancelled.
| ● | Additionally, the Company granted options to acquire common stock to employees. The options for the majority vest annually over a three-year period, 100,000 vest equally over a four-year period, and the balance of 100,000 vest upon the achievement of certain market capitalization thresholds or performance conditions.
2020 Stock Option Issuances
| ● | During the year ended December 31, 2020, the Company granted Mr. Kumnick and Mr. Broenniman granted options to acquire 1,111,111 and 555,555,respectively, shares of common stock upon their employment. The options granted to Mr. Kumnick and Mr. Broenniman vest 20% at date of the grant with the balance vesting upon achieving certain performance thresholds. The performance thresholds have been met. Additionally, the Company granted options to acquire approximately 422,000 shares of common stock to employees and one service provider in connection with service. The options have a term of ten years with vesting ranging from immediate to a three-year period. All options granted approximated fair value.
The Company determined the grant date fair value of the options granted during the years ended December 31, 2021 and 2020 using the Black Scholes Method and the following assumptions:
|  | 2021 |  | 2020
Expected Volatility |  | 70% |  | 67% to 75%
Expected Term |  | 1.0 – 5.0 Years |  | 2.5 – 5.9 Years
Risk Free Rate |  | 0.16% to 1.27% |  | 0.33 to 0.5%
Dividend Rate |  | 0.00% |  | 0.00%
Activity related to stock options for the years ended December 31, 2021, and 2020 is summarized as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Contractual Term (Yrs.) |  |  | Aggregate Intrinsic Value |
Outstanding as of January 1, 2020 |  |  | 3,646,667 |  |  | $ | 5.40 |  |  |  | 6.5 |  |  | $ | 280,000 |
Granted |  |  | 2,089,135 |  |  | $ | 2.10 |  |  |  | 10.0 |  |  | $ | - |
Exercised |  |  | (66,667 | ) |  | $ | 1.50 |  |  |  | 4.3 |  |  | $ | - |
Forfeited/cancelled |  |  | (23,333 | ) |  | $ | 6.12 |  |  |  | - |  |  | $ | - |
Outstanding as of December 31, 2020 |  |  | 5,645,802 |  |  | $ | 4.50 |  |  |  | 7.5 |  |  | $ | 8,283,639 |
Granted |  |  | 4,583,609 |  |  | $ | 7.56 |  |  |  | 10.0 |  |  | $ | - |
Exercised |  |  | (599,661 | ) |  | $ | 1.29 |  |  |  | 5.0 |  |  | $ | 3,485,482 |
Forfeited/cancelled |  |  | (718,756 | ) |  | $ | 6.52 |  |  |  | 8.8 |  |  |  |  |
Outstanding as of December 31, 2021 |  |  | 8,910,994 |  |  | $ | 6.48 |  |  |  | 6.7 |  |  | $ | 67,488,214 |
Exercisable as of December 31, 2021 |  |  | 4,957,184 |  |  | $ | 5.22 |  |  |  | 4.5 |  |  | $ | 43,678,807 |
The following table summarizes stock option information as of December 31, 2021:
Exercise Price |  | Outstanding |  |  | Weighted Average Contractual Life (Yrs.) |  |  | Exercisable |
$.03 - $4.00 |  |  | 3,570,045 |  |  |  | 4.6 |  |  |  | 3,278,268 |
$4.01 - $7.00 |  |  | 162,784 |  |  |  | 4.5 |  |  |  | 162,784 |
$7.01 - $10.00 |  |  | 3,466,135 |  |  |  | 9.3 |  |  |  | 449,464 |
$10.01 - $13.50 |  |  | 1,712,030 |  |  |  | 5.9 |  |  |  | 1,066,668 |
|  |  | 8,910,994 |  |  |  | 6.7 |  |  |  | 4,957,184 |
As of December 31, 2021, there was approximately $15,597,000 of unrecognized compensation costs related to employee stock options outstanding which will be recognized in 2022 through 2025. The company will recognize forfeitures as they occur. Stock compensation expense for the years ended December 31, 2021, and 2020 was approximately $5,475,000 and $823,000, respectively. Additionally, the Company recorded approximately $1,228,000 in 2021 for restricted stock expense in which the Company met certain performance thresholds. The criteria for certain performance-based stock options awarded in 2021 have not been achieved as of December 31, 2021.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 14 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 18 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 16 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496180-112644 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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