XML 28 R16.htm IDEA: XBRL DOCUMENT v3.21.1
Stockholders' Equity
 12 Months Ended
Dec. 31, 2020
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
10. Stockholders’ Equity

The 2011 Plan was terminated as to future awards on May 16, 2016. A total of 121,930 shares of the Company’s common stock may be issued pursuant to outstanding options awarded under the 2011 Plan; however, no additional awards may be granted under such plan. The 2016 Plan was adopted by the Company’s stockholders on May 16, 2016 and permits the Company to award stock options (both incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other stock-based awards and cash-based incentive awards to its employees (including an employee who is also a director or officer under certain circumstances), non-employee directors and consultants. The maximum number of shares of common stock that may be issued pursuant to awards under the 2016 Plan is 1,300,000 shares, 100% of which may be issued pursuant to incentive stock options. In addition, the maximum number of shares of common stock that may be issued under the 2016 Plan may be increased by an indeterminate number of shares of common stock underlying outstanding awards issued under the 2011 Plan that are forfeited, expired, cancelled or settled in cash. As of December 31, 2020, there were 853,999 shares available for future issuance under the 2016 Plan.


Treasury Shares


On April 29, 2019, the Company implemented a stock repurchase plan to repurchase up to $500,000 of its common stock for cash. The repurchase plan expired on April 29, 2020. The Company had purchased 9,950 shares of its common stock under the repurchase plan as of April 29, 2020 and has classified them as treasury shares on the Company’s consolidated balance sheets.


Shares issued for consulting services


On August 11, 2020, the Company issued 37,500 shares of its common stock to a consultant as consideration for investor relations services. The total expense for these grants was $43,500 and is included in general and administrative expense in the consolidated statements of operations.


Stock Options


The following table summarizes the assumptions used in the Black-Scholes pricing model to estimate the fair value of the options granted during the years ended:


   December 31, 
   2020   2019 
Expected volatility   188.0%   171.0-177.0%
Expected life of option   5.3    5.0-6.3 
Risk free interest rate   0.6%   1.7-2.5%
Expected dividend yield   0.0%   0.0%

The expected life of the options is the period of time over which employees and non-employees are expected to hold their options prior to exercise. The expected life of options has been determined using the “simplified” method as prescribed by Staff Accounting Bulletin 110, which uses the midpoint between the vesting date and the end of the contractual term. The volatility of the Company’s common stock is calculated using the Company’s historical volatilities beginning at the grant date and going back for a period of time equal to the expected life of the award. The Company estimates potential forfeitures of stock awards and adjusts recorded stock-based compensation expense accordingly. The Company estimates pre-vesting forfeitures primarily based on the Company’s historical experience and is adjusted to reflect actual forfeitures as the stock-based awards vest.


The following tables summarize stock option activity during the year ended December 31, 2020:


   Number of
Options		   Weighted
Average
Exercise
Price		 
Outstanding at January 1, 2020   1,021,243   $4.82 
Granted   24,000    0.80 
Exercised during period   -    - 
Forfeited or canceled, during the period   (421,777)   3.52 
Expired, during the period   (1,430)   10.50 
Outstanding at December 31, 2020   622,036   $5.53 
Exercisable at December 31, 2020   479,702   $6.28 

At December 31, 2020, there was $128,879 of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of 2.01 years.


On December 31, 2020, the aggregate intrinsic value of stock options that were outstanding and exercisable was $15,840. On December 31, 2019, there was no aggregate intrinsic value of stock options that were outstanding and exercisable. The intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the fair value of such awards as of the period-end date.


During the year ended December 31, 2020, the Company granted options to the Company’s board of directors to purchase an aggregate of 24,000 shares of common stock. These options vest over one year and have a term of ten years and have a weighted average exercise price of $0.80.


The aggregate fair value for the options granted during the years ended December 31, 2020 and 2019 was $18,664 and $469,179, respectively.


Stock-based compensation expense for the Company’s stock options included in the consolidated statements of operations was as follows:


   Year Ended
December 31,		 
   2020   2019 
Cost of revenue  $1,527   $1,478 
Sales and marketing expense   90    130 
Product development expense   19,491    117,375 
General and administrative expense   222,089    710,013 
Total stock-based compensation expense  $243,197   $828,996