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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2018
Equity [Abstract] |
Stockholders' Equity | NOTE 7 – Stockholders’ Equity Common Stock Effective February 15, 2017, our Articles of Incorporation were amended to provide for a reverse stock split of the outstanding shares of our common stock on a 1-for-2 basis (the “Reverse Stock Split”), and a corresponding decrease in the number of shares of our common stock that we are authorized to issue (the “Share Decrease”). The effects of the stock split have been retroactively reflected to all periods presented. Effective March 5, 2018, the Articles of Incorporation were again amended to increase the authorized number of shares of common stock to 15,000,000. Effective October 18, 2018, the Articles of Incorporation were again amended to increase the authorized number of shares of common stock to 22,500,000. In 2018, the Company issued 200,000 shares of common stock to directors valued at $1.28 per share, or $256,264. In May 2018, we issued an aggregate of 1,000,000 shares of common stock upon conversion of the 1,000 shares of Series B Preferred Stock issued in April 2018 (as described below under “Preferred Stock”). In May 2018, the Company issued 29,800 shares of common stock as the result of a conversion of the $50,000 principal balance of Notes Payable and the cashless exercise of 24,000 warrants. In June 2018, as part of its public offering of equity securities described in Note 1, the Company issued 350 shares of Series C convertible preferred stock, 2,040,000 shares of common stock, and warrants to purchase a total of 717,000 shares of common stock (including the warrants described under “Preferred Stock” below that were issued on June 26, 2018). Each warrant has an initial price of $1.08 per share. The net proceeds to the Company were approximately $2,068,900 after commissions and other offering expenses. The Company also issued to Dawson James Securities, Inc., its placement agent in the public offering, a Unit Purchase Option to acquire up to 191,200 Units, at an exercise price of $1.25 per Unit, consisting of 191,200 shares of common stock and warrants to purchase up to 57,360 shares of common stock at an exercise price of $1.08 as compensation. Between August and October 2018, the Company issued 350,000 shares of common stock upon conversion of 350 shares of Series C Preferred Stock issued in June 2018 (as described below under “Preferred Stock”). Between October and December 2018, the Company issued 177,900 shares of common stock as the result of the exercise of warrants resulting in cash proceeds of $192,132. On February 14, 2017, The NASDAQ Stock Market LLC informed the Company that it had approved the listing of the Company’s common stock on The NASDAQ Capital Market, effective as of February 15, 2017. The Company’s common stock ceased trading on the OTCQB on February 15, 2017, and on such date the common stock commenced trading on The NASDAQ Capital Market under the ticker symbol “SGLB”. In October 2017, pursuant to an advisory agreement with Dawson James Securities, the Company issued to Dawson James a total of 141,000 shares of the Company’s common stock in exchange for the surrender by Dawson James of its Unit Purchase Option to acquire up to 70,500 Units that was issued by the Company in the 2017 public offering. In November 2017, the Company issued 56,000 shares of common stock as the result of the exercise of warrants resulting in cash proceeds of $112,000. In December 2017, the Company issued 204,578 shares of common stock as the result of a conversion of the $400,000 principal balance of Notes Payable and $8,556 of accrued interest. In 2017, the Company issued 40,934 shares of common stock to directors at an average value of $2.09 per share, or $85,408. Also in 2017, 7,500 shares previously issued to a director and 750 shares previously issued to an employee, with a combined carrying value of $9,830, were forfeited. Deferred Compensation In previous years and 2018, the Company issued to various employees, directors, and contractors shares of the Company’s common stock, subject to restrictions, pursuant to the 2013 Equity Incentive Plan (the “2013 Plan”). Such shares were valued at the fair value at the date of issue. The fair value was expensed as compensation over the vesting period and recorded as a reduction of stockholders’ equity. During 2018 and 2017, $277,515 and $209,300, respectively, of the unvested compensation cost related to these issues was recognized. As of December 31, 2018 and 2017, the balance of unvested compensation to be recognized was $21,355 and $31,576, respectively, and is recorded as prepaid stock compensation as of those dates. Preferred Stock The Company is authorized to issue 10,000,000 shares of preferred stock, $0.001 par value. No shares of preferred stock were issued and outstanding at December 31, 2018 or 2017. In April 2018, the Company issued 1,000 shares of the Company’s newly-created non-voting Series B Convertible Preferred Stock, which were convertible into 1,000,000 shares of common stock and warrants to purchase an aggregate of 750,000 shares of the Company’s common stock, for an aggregate purchase price of $1,000,000. The warrants have an initial exercise price of $1.47 per share, the closing price of the Company’s common stock reported on The NASDAQ Capital Market on April 6, 2018, subject to adjustment in certain circumstances. The net proceeds to the Company were approximately $877,500 after commissions and other offering expenses. The Company also issued to Dawson James Securities, Inc., its placement agent in the foregoing private placement, warrants to purchase up to 140,000 shares of common stock, at an exercise price of $1.47 per share, as compensation. In June 2018, as part of the public offering described in Note 1, the Company issued 350 shares of the Company’s newly-created non-voting Series C Convertible Preferred Stock, which were convertible into 350,000 shares of common stock, and warrants to purchase an aggregate of 105,000 shares of the Company’s common stock. The warrants have an initial exercise price of $1.08 per share, 11% above the closing price of the Company’s common stock reported on The NASDAQ Capital Market on June 26, 2018, subject to adjustment in certain circumstances. Stock Options In October 2017, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Plan by 375,000 shares of our common stock to a total of 750,000 shares. As of December 31, 2017, an aggregate of 750 shares and 450,062 shares of common stock were reserved for issuance under the 2011 Plan and the 2013 Plan, respectively. In October 2018, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Plan by 900,000 shares of our common stock to a total of 1,650,000 shares. As of December 31, 2018, an aggregate of 750 shares and 508,885 shares of common stock were reserved for issuance under the 2011 Plan and the 2013 Plan, respectively. During 2018, the Company granted a total of 534,329 options to 18 employees and 1 consultant with vesting periods ranging from immediately/upon issue to 4 years beginning February 2018. In 2018, 415,492 options vested and $868,015 of compensation cost was recognized during the year. As of December 31, 2018, there were options to purchase 826,267 shares issued and outstanding under the 2013 Plan. Of this amount, there are vested options exercisable for 500,980 shares of common stock. No options were exercised during the year ended December 31, 2018. During 2017, the Company granted a total of 213,750 options to 5 employees with vesting periods ranging from 18 months to 4 years beginning May 2017. In 2017, 82,676 options vested, and $510,496 of compensation cost was recognized during the year. As of December 31, 2017, there were options to purchase 299,938 shares issued and outstanding under the 2013 Plan. Of this amount, there are vested options exercisable for 85,614 shares of common stock. As of December 31, 2017, the Company had 200,419 shares reserved for future grant under its plans and there were no options exercised during the year ended December 31, 2017. The Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company’s stock on the dates of grant. Stock options are typically granted throughout the year and generally vest over four years of service and expire ten years from the date of the award, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period for each stock option award. Total share-based compensation expense included in the consolidated statements of operations for the years ended December 31, 2018 and 2017 is $1,145,530, of which $868,015 is related to stock options, and $719,796, of which $510,496 is related to stock options, respectively. There was no capitalized share-based compensation cost as of December 31, 2018 and 2017, and there were no recognized tax benefits during the years ended December 31, 2018 and 2017. To estimate the value of an award, the Company uses the Black-Scholes option-pricing model. This model requires inputs such as expected life, expected volatility and risk-free interest rate. The forfeiture rate also impacts the amount of aggregate compensation. These inputs are subjective and generally require significant analysis and judgment to develop. While estimates of expected life, volatility and forfeiture rate are derived primarily from the Company’s historical data, the risk-free rate is based on the yield available on U.S. Treasury constant maturity rates with similar terms to the expected term of the stock option awards. The fair value of share-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the years ended December 31, 2018 and 2017: Assumptions:
|  | 2018 |  |  | 2017 |
Dividend yield |  |  | 0.00 |  |  |  | 0.00 |
Risk-free interest rate |  |  | 2.68-3.10 | % |  |  | 1.91-2.45 | %
Expected volatility |  |  | 104.9-137.3 | % |  |  | 115.9-139 | %
Expected life (in years) |  |  | 5-10 |  |  |  | 5-10 |
Option activity for the year ended December 31, 2018 and 2017 was as follows:
|  |  |  |  | Weighted Average |  |  | Weighted Average |  |  |  |
|  |  |  |  | Exercise |  |  | Remaining |  |  | Aggregate |
|  |  |  |  | Price |  |  | Contractual |  |  | Intrinsic |
|  | Options |  |  | ($) |  |  | Life (Yrs.) |  |  | Value ($) |
Options outstanding at December 31, 2016 |  |  | 101,188 |  |  |  | 8.39 |  |  |  | 9.29 |  |  |  | - |
Granted |  |  | 213,750 |  |  |  | 2.95 |  |  |  | 7.72 |  |  |  | 16,600 |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited or cancelled |  |  | (15,000 | ) |  |  | 5.43 |  |  |  | - |  |  |  | - |
Options outstanding at December 31, 2017 |  |  | 299,938 |  |  |  | 4.57 |  |  |  | 7.33 |  |  |  | 16,600 |
Granted |  |  | 534,329 |  |  |  | 1.45 |  |  |  | 6.58 |  |  |  | - |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited or cancelled |  |  | (8,000 | ) |  |  | 4.59 |  |  |  | - |  |  |  | - |
Options outstanding at December 31, 2018 |  |  | 826,267 |  |  |  | 2.49 |  |  |  | 6.47 |  |  |  | 60,090 |
Options expected to vest in the future as of December 31, 2018 |  |  | 325,287 |  |  |  | 2.54 |  |  |  | 6.84 |  |  |  | 28,332 |
Options exercisable at December 31, 2018 |  |  | 500,980 |  |  |  | 2.42 |  |  |  | 6.23 |  |  |  | 31,758 |
Options vested, exercisable, and options expected to vest at December 31, 2018 |  |  | 826,267 |  |  |  | 2.49 |  |  |  | 6.47 |  |  |  | 60,090 |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock for those awards that have an exercise price currently below the $1.50 closing price of our Common Stock on December 31, 2018. Sixteen of the 2018 option grants have an exercise price currently below $1.50. At December 31, 2018, there was $312,655 of unrecognized share-based compensation expense related to unvested share options with a weighted average remaining recognition period of 6.47 years. Warrants At December 31, 2018, the Company had outstanding warrants to purchase a total of 3,050,600 shares of common stock; 1,621,500 warrants at an exercise price of $4.00 per share, which if not exercised, will expire on February 21, 2022, 890,000 warrants at an exercise price of $1.47 per share, which if not exercised, will expire on October 07, 2023, and 539,100 warrants at an exercise price of $1.08 per share, which if not exercised, will expire on June 26, 2023. Warrant activity for the year ended December 31, 2018 and 2017 was as follows:
|  |  |  |  | Weighted Average |  |  | Weighted Average |
|  |  |  |  | Exercise |  |  | Remaining |
|  |  |  |  | Price |  |  | Contractual |
|  | Warrants |  |  | ($) |  |  | Life (Yrs.) |
Warrants outstanding at December 31, 2016 |  |  | 80,000 |  |  |  | 2.00 |  |  |  | 2.79 |
Granted |  |  | 1,621,500 |  |  |  | 4.00 |  |  |  | 1.79 |
Exercised |  |  | (56,000 | ) |  |  | 2.00 |  |  |  | - |
Forfeited or cancelled |  |  | - |  |  |  | - |  |  |  | - |
Options outstanding at December 31, 2017 |  |  | 1,645,500 |  |  |  | 3.97 |  |  |  | 4.11 |
Granted |  |  | 1,607,000 |  |  |  | 1.30 |  |  |  | 4.64 |
Exercised |  |  | (201,900) |  |  |  | 1.19 |  |  |  | - |
Forfeited or cancelled |  |  | - |  |  |  | - |  |  |  | - |
Options outstanding at December 31, 2018 |  |  | 3,050,600 |  |  |  | 2.75 |  |  |  | 3.86 |
On May 31, 2018, 24,000 warrants with an exercise price of $2.00 were exercised in a cashless exchange transaction resulting in the issuance of 4,800 shares of the Company’s common stock. Between October 18, 2018 and December 17, 2018, 177,900 warrants with an exercise price of $1.08 were exercised resulting in the issuance of 177,900 shares of common stock.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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