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8. COMMON STOCK

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

8.	COMMON STOCK

Director Compensation

On September 17, 2019, the Board, upon the recommendation of its Compensation Committee, granted two directors annual grants of 12,500 shares each, and the lead director was issued an annual grant of 17,500 shares, which vest quarterly in four (4) equal installments. The grant date was determined to be September 17, 2019 as that was when a mutual understanding of the key terms and conditions of the grants was reached. On the grant date, these shares had a per share fair value of $5.50 based on the quoted trading price, or $233,750. 10,625 shares vested in 2019. During the three and nine months ended September 30, 2020, 10,625 of these shares vested generating an expense of $58,439 and 31,875 shares vested generating an expense of $170,325, respectively. At September 30, 2020, there were no shares remaining unvested in escrow.

On October 1, 2019, the Board approved two grants of restricted stock of the Company to Mr. Wheatley under the 2011 Stock Incentive Plan. The total number of shares granted was determined based on an award of $150,000 divided by the per share quoted trading price on October 1, 2019. On the grant date, the shares had a per share fair value of $5.97 and 25,124 shares were granted. In addition, on June 17, 2020, the Board approved two additional restricted stock grants to Mr. Wheatley under the 2011 Stock Incentive Plan. The total number of shares granted was determined based on an award of $150,000 divided by the per share quoted trading price on June 17, 2020. On the grant date, the shares had a per share fair value of $7.35 and 20,408 shares were granted. 12,562 shares vested in 2019. During the three and nine months ended September 30, 2020, 4,448 shares vested generating an expense of $31,250 and 13,084 shares vested generating an expense of $87,500, respectively. At September 30, 2020, 19,886 shares were held unvested in escrow for Mr. Wheatley representing $137,500 of unrecognized restricted stock grant expense which will be recognized through the quarter ending March 31, 2023.

Stock Issued in Cash Sales

The Company filed a “shelf” registration statement on Form S-3 and an accompanying prospectus with the Securities and Exchange Commission on May 26, 2020. On July 7, 2020, the Company closed an underwritten public offering issuing 1,393,900 shares, with a public offering price of $8.25 per share, generating approximately $10.5 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. The Company intends to use the aggregate net proceeds primarily for working capital and general corporate purposes.

Other Registered Securities

On August 27, 2020, the Company filed a registration statement on Form S-8 to register 630,000 shares issued or to be issued under the Company’s 2011 Stock Incentive Plan.