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16. STOCK OPTIONS AND WARRANTS | 12 Months Ended
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Dec. 31, 2020
Share-based Payment Arrangement [Abstract] |
STOCK OPTIONS AND WARRANTS |
16. | STOCK OPTIONS AND WARRANTS
On August 10, 2011, the Company’s Board of Directors approved and caused the Company to adopt the Beam Global 2011 Stock Incentive Plan (the “Plan”), which authorizes the issuance of up to 630,000 shares of the Company’s common stock pursuant to the exercise of stock options or other awards granted under the Plan. Stock Options The Company follows the provisions of ASC Topic 718, “Compensation – Stock Compensation.” ASC Topic 718 establishes standards surrounding the accounting for transactions in which an entity exchanges its equity instruments for goods or services. ASC Topic 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions, such as options issued under the Company’s Stock Option Plans. The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life and expected volatility in the market value of the underlying common stock based on our historical volatility. During the year ended December 31, 2020, the Company granted 105,604 stock options under the plans with a total valuation of $1,374,394 and a 10-year term. During the year ended December 31, 2019, the Company granted 58,204 stock options under the plans with a total valuation of $58,204 and a 10-year term. The Company’s stock option compensation expense was $722,549 and $48,915 for the years ended December 31, 2020 and 2019, respectively, and there was $823,680 of total unrecognized compensation costs related to outstanding stock options at December 31, 2020 which will be recognized over 3.75 years. We used the following assumptions for options granted in fiscal 2020 and 2019:
|  | 2020 |  |  | 2019 |
Expected volatility |  |  | 74.16%-115.78% |  |  |  | 78.47%-82.26% |
Expected term |  |  | 5-7 Years |  |  |  | 5-7 Years |
Risk-free interest rate |  |  | .37%-1.79% |  |  |  | 1.73%-1.92% |
Weighted average FV |  | $ | 12.38 |  |  | $ | 4.02 |
The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. Option activity for the years ended December 31, 2020 and 2019 under the 2011 Plan is as follows:
|  |  |  |  | Weighted |
|  |  |  |  | Average |
|  | Number of |  |  | Exercise |
|  | Options |  |  | Price |
Outstanding at December 31, 2018 |  |  | 296,406 |  |  | $ | 11.50 |
Granted |  |  | 58,204 |  |  |  | 5.52 |
Exercised |  |  | – |  |  |  | – |
Forfeited |  |  | (84,350 | ) |  |  | 11.71 |
Expired |  |  | (30,556 | ) |  |  | 16.37 |
Outstanding at December 31, 2019 |  |  | 239,704 |  |  | $ | 9.25 |
Granted |  |  | 105,604 |  |  |  | 15.63 |
Exercised |  |  | (3,000 | ) |  |  | 4.09 |
Forfeited |  |  | (500 | ) |  |  | 5.27 |
Expired |  |  | – |  |  |  | – |
Outstanding at December 31, 2020 |  |  | 341,808 |  |  | $ | 11.27 |
Exercisable at December 31, 2020 |  |  | 233,475 |  |  | $ | 12.23 |
The following table summarizes information about employee stock options outstanding at December 31, 2019:
|  |  | Options Outstanding |  |  |  | Options Exercisable |
Range of Exercise Price |  |  | Number Outstanding at December 31, 2019 |  |  |  | Weighted Average Remaining Contractual life |  |  |  | Weighted Average Exercise Price |  |  |  | Aggregate Intrinsic Value |  |  |  | Number Exercisable at December 31, 2019 |  |  |  | Weighted Average Exercise Price |  |  |  | Aggregate Intrinsic Value |
$4.09 - $8.00 |  |  | 148,404 |  |  |  | 7.93 Years |  |  | $ | 6.73 |  |  | $ | 5,187 |  |  |  | 104,415 |  |  | $ | 7.13 |  |  | $ | 5,187 |
$10.00 - $13.50 |  |  | 91,300 |  |  |  | 1.89 Years |  |  |  | 13.33 |  |  |  | – |  |  |  | 91,300 |  |  |  | 13.33 |  |  |  | – |
|  |  | 239,704 |  |  |  | 5.63 Years |  |  | $ | 9.25 |  |  | $ | 5,187 |  |  |  | 195,715 |  |  | $ | 10.02 |  |  | $ | 5,187 |
The following table summarizes information about employee stock options outstanding at December 31, 2020:
|  |  | Options Outstanding |  |  |  | Options Exercisable |
Range of Exercise Price |  |  | Number Outstanding at December 31, 2020 |  |  |  | Weighted Average Remaining Contractual life |  |  |  | Weighted Average Exercise Price |  |  |  | Aggregate Intrinsic Value |  |  |  | Number Exercisable at December 31, 2020 |  |  |  | Weighted Average Exercise Price |  |  |  | Aggregate Intrinsic Value |
$4.09 - $8.00 |  |  | 194,108 |  |  |  | 7.42 Years |  |  | $ | 6.23 |  |  | $ | 13,111,999 |  |  |  | 125,567 |  |  | $ | 6.83 |  |  | $ | 8,406,649 |
$10.00 - $13.50 |  |  | 111,200 |  |  |  | 2.47 Years |  |  |  | 13.23 |  |  |  | 6,732,736 |  |  |  | 92,450 |  |  |  | 13.33 |  |  |  | 5,588,611 |
$17.44 - $52.69 |  |  | 36,500 |  |  |  | 9.86 Years |  |  |  | 32.08 |  |  |  | 1,522,010 |  |  |  | 15,458 |  |  |  | 49.59 |  |  |  | 374,001 |
|  |  | 341,808 |  |  |  | 6.07 Years |  |  | $ | 11.27 |  |  | $ | 21,366,745 |  |  |  | 233,475 |  |  | $ | 12.23 |  |  | $ | 14,369,261 |
Options exercisable have a weighted average remaining contractual life of 4.64 years as of December 31, 2020. Warrants 2020 There were no warrants granted during the year ended December 31, 2020. During the year ended December 31, 2020, 1,552,206 warrants to purchase shares of the Company’s common stock were exercised generating $9,926,858, of which $9,732,408 in cash was received and $194,450 is included in other assets as a receivable (see Note 4) which was collected in January 2021. 18,000 warrants were cashless exercises in 2020 and the Company issued 11,304 shares. At December 31, 2020, there were warrants outstanding to purchase up to 965,584 shares of the Company’s common stock at a weighted average exercise price of $6.33. 2019 As part of the Company’s public offering (see Note 15), the Company issued 2,300,000 warrants in April 2019 to the Underwriters. These warrants are exercisable for five years at an exercise price of $6.30 per share. In April 2019, pursuant to the Underwriting Agreement, the Company issued as a fee to the Underwriters warrants to purchase up to a total of 110,001 shares of common stock (5% of the shares of common stock sold). The warrants are exercisable at $6.60 per share and have a term of five years. There was no financial statement accounting effect for the issuance of these warrants.
|  | Number of Warrants |  |  | Weighted Average Exercise Price |
Outstanding at December 31, 2018 |  |  | 134,359 |  |  | $ | 8.57 |
Granted |  |  | 2,410,001 |  |  | $ | 6.31 |
Expired |  |  | (8,570 | ) |  | $ | 12.50 |
Outstanding at December 31, 2019 |  |  | 2,535,790 |  |  | $ | 6.41 |
Exercised |  |  | (1,570,206 | ) |  | $ | 6.47 |
Outstanding at December 31, 2020 |  |  | 965,584 |  |  | $ | 6.33 |
Exercisable at December 31, 2020 |  |  | 965,584 |  |  | $ | 6.33 |
Exercisable warrants have a weighted average remaining contractual life of 3.26 years as of December 31, 2020. The intrinsic value of the exercisable shares of the warrants at December 31, 2020 was $65,131,885.

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