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STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

6.	stock-based compensation

The Company accounts for stock-based compensation based on the fair value of the stock or stock-based instrument on the date of grant.

In January 2020, the Company granted 73,550 restricted stock units (“RSUs”) to its board of directors as partial compensation for the 2020 year. In January 2019, the Company granted 75,350 restricted stock units (“RSUs”) to its board of directors as partial compensation for the 2019 year. RSUs vest quarterly on a straight-line basis over a one-year period. The Company’s net loss for the three months ended March 31, 2020 and 2019 includes approximately $258,000 and $250,000, respectively, of non-cash compensation expense related to the RSU grants to the board of directors. This expense is recorded as a component of selling, general and administrative expenses.

In April 2019, the Company granted 94,972 shares of common stock to various employees. In the event that any of these employees voluntarily terminates their employment prior to certain dates, portions of the shares may be forfeited. In addition, if certain Company performance criteria are not achieved, portions of these shares may be forfeited. These shares will be expensed during various periods through March 2023 based upon the service and performance thresholds. For the three months ended March 31, 2020, approximately $40,600 of compensation expense is included in selling, general and administrative expenses and approximately $10,000 of compensation expense is included in cost of sales for this grant.

In March 2018, the Company granted 81,186 shares of common stock to various employees. In the event that any of these employees voluntarily terminates their employment prior to certain dates, portions of the shares may be forfeited. In addition, if certain Company performance criteria are not achieved, portions of these shares may be forfeited. These shares will be expensed during various periods through March 2022 based upon the service and performance thresholds. For the three months ended March 31, 2020, approximately $21,200 of compensation expense is included in selling, general and administrative expenses and approximately $4,300 of compensation expense is included in cost of sales for this grant. For the three months ended March 31, 2019, approximately $50,100 of compensation expense is included in selling, general and administrative expenses and approximately $8,400 of compensation expense is included in cost of revenue for this grant.

In August 2016 and March 2017, the Company granted 98,645 and 73,060 shares of common stock, respectively, to various employees. In the event that any of these employees voluntarily terminates their employment prior to certain dates, portions of the shares may be forfeited. In addition, if certain Company performance criteria are not achieved, portions of these shares may be forfeited. These shares will be expensed during various periods through March 2021 based upon the service and performance thresholds. For the three months ended March 31, 2020 and 2019, approximately $10,000 and $34,800 respectively, of compensation expense is included in selling, general and administrative expenses and approximately $3,200 and $7,700, respectively, of compensation expense is included in cost of sales for this grant.

On February 12, 2019, employees returned 1,221 shares of common stock, valued at approximately $20,300, to pay the employees’ withholding taxes upon the vesting of common stock granted in prior periods.