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Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Stock-Based Compensation | Note 11 – Stock-Based Compensation Stock Incentive Plans The Co-Diagnostics, Inc. 2015 Long Term Incentive Plan (the “Incentive Plan”) reserves an aggregate of 6,000,000 shares of common stock issuable upon the grant of awards under the Incentive Plan. The number of awards available for issuance under the Incentive Plan was 2,095,266 at December 31, 2021. Stock Options The following table summarizes option activity during the years ended December 31, 2021 and 2020: Schedule of Option Activity
|  |  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Fair Value |  |  | Weighted Average Remaining Contractual Life (Years) |
Outstanding at December 31, 2019 |  |  |  | 2,021,817 |  |  | $ | 1.69 |  |  | $ | 0.83 |  |  |  |  |
Granted |  |  |  | 150,000 |  |  |  | 8.14 |  |  |  | 4.74 |  |  |  |  |
Expired |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Forfeited/Cancelled |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Exercised |  |  |  | (871,229 | ) |  |  | 1.68 |  |  |  | 0.89 |  |  |  |  |
Outstanding at December 31, 2020 |  |  |  | 1,300,588 |  |  | $ | 2.44 |  |  | $ | 1.24 |  |  |  |  |
Granted |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Expired |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Forfeited/Cancelled |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Exercised |  |  |  | (189,225 | ) |  |  | 2.38 |  |  |  | 1.12 |  |  |  |  |
Outstanding at December 31, 2021 |  |  |  | 1,111,363 |  |  | $ | 2.12 |  |  | $ | 1.31 |  |  |  | 6.62 |
Exercisable at December 31, 2021 |  |  |  | 1,094,697 |  |  | $ | 2.01 |  |  | $ | 1.18 |  |  |  | 6.59 |
The total intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was approximately $1.3 million and $11.8 million, respectively. The aggregate intrinsic value of outstanding options at December 31, 2021 and 2020 was approximately $7.6 million and $7.1 million, respectively. As of December 31, 2021, there were 16,666 unvested options and $78,115 of unrecognized stock-based compensation expense related to options. The unrecognized stock-based compensation expense is expected to be recognized over 0.5 years. Stock-based compensation cost is measured at the grant date based on the fair value of the award granted and recognized as expense over the vesting period using the straight-line method. The Company uses the Black-Scholes model to value options granted. The following weighted average assumptions were used in estimating the grant date fair value of options: Schedule of Fair Value of Options Weighted Average Assumptions
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |
Risk-free interest rate |  |  | - |  |  |  | 1.05 | %
Expected life (years) |  |  | - |  |  |  | 7.3 |
Expected volatility |  |  | - |  |  |  | 62.82 | %
Expected dividend yield |  |  | - |  |  |  | None |
Restricted Stock Units The grant date fair value of RSUs granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the awards. The following table sets forth the outstanding RSUs and related activity for the years ended December 31, 2021 and 2020: Schedule of Outstanding Restricted Stock Units and Related Activity
|  | Number of RSUs |  |  | Weighted Average Grant Date Fair Value |
Unvested at December 31, 2019 |  |  | - |  |  | $ | - |
Granted |  |  | 549,500 |  |  |  | 10.49 |
Vested |  |  | (27,000 | ) |  |  | 10.49 |
Forfeited/Cancelled |  |  | - |  |  |  | - |
Unvested at December 31, 2020 |  |  | 522,500 |  |  | $ | 10.49 |
Granted |  |  | 1,217,500 |  |  |  | 9.76 |
Vested |  |  | (438,502 | ) |  |  | 10.10 |
Forfeited/Cancelled |  |  | (34,083 | ) |  |  | 9.91 |
Unvested at December 31, 2021 |  |  | 1,267,415 |  |  | $ | 9.94 |
As of December 31, 2021, there was $11.6 million of unrecognized stock-based compensation expense related to outstanding RSUs which is expected to be recognized over a weighted-average period of 2.3 years. Warrants The Company has issued warrants related to financings, acquisitions and as compensation to third parties for services provided. The Company estimates the fair value of issued warrants on the date of issuance as determined using a Black-Scholes pricing model. The Company amortizes the fair value of issued warrants using a vesting schedule based on the terms and conditions of each warrant if granted for services. The following table summarizes warrant activity during the years ended December 31, 2021 and 2020: Schedule of Warrant Activity
|  |  | Number of Warrants |  |  | Weighted Average Exercise Price |  |  | Weighted Average Fair Value |  |  | Weighted Average Remaining Contractual Life (Years) |
Outstanding at December 31, 2019 |  |  |  | 983,535 |  |  | $ | 1.44 |  |  | $ | 1.03 |  |  |  |  |
Granted |  |  |  | 20,000 |  |  |  | 1.40 |  |  |  | 15.19 |  |  |  |  |
Expired |  |  |  | (9,090 | ) |  |  | 6.00 |  |  |  | 0.17 |  |  |  |  |
Forfeited/Cancelled |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Exercised |  |  |  | (924,445 | ) |  |  | 1.42 |  |  |  | 1.43 |  |  |  |  |
Outstanding at December 31, 2020 |  |  |  | 70,000 |  |  | $ | 1.83 |  |  | $ | 5.21 |  |  |  | 3.3 |
Granted |  |  |  | 456,281 |  |  |  | 9.13 |  |  |  | 3.83 |  |  |  |  |
Expired |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Forfeited/Cancelled |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Exercised |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
Outstanding at December 31, 2021 |  |  |  | 526,281 |  |  | $ | 8.15 |  |  | $ | 4.01 |  |  |  | 4.7 |
The intrinsic value of warrants exercised during the years ended December 31, 2021 and 2020 was $0 and approximately $9.7 million, respectively. The aggregate intrinsic value of outstanding warrants at December 31, 2021 was approximately $497,000. 70,000 warrants are exercisable at December 31, 2021. As discussed in Note 3 and Note 4, approximately 456,000 warrants to purchase shares of the Company’s common stock were issued in connection with the acquisition of ACI and IdMo. The ability to exercise the warrants is contingent upon the achievement of certain development and revenue milestones on or before January 1, 2027. There was no unrecognized stock-based compensation expense related to warrants. See Note 4 for additional information regarding the fair value calculation of the warrants issued during the year ended December 31, 2021. The fair values for the warrants issued during the year ended December 31, 2020 were estimated at the date of grant using the Black Scholes model with the following weighted average assumptions: Schedule of Fair Value of Warrants Assumptions
|  | Year Ended December 31, |
|  | 2020 |
Risk-free interest rate |  |  | 0.34 | %
Expected life (years) |  |  | 5.0 |
Expected volatility |  |  | 61.42 | %
Expected dividend yield |  |  | None |
Stock Issued for Services The Company has issued restricted stock to third parties for services provided. The grant date fair value of the restricted stock granted is determined using the closing market price of the Company’s common stock on the grant date with the associated compensation expense amortized over the vesting period of the stock awards. The Company issued 5,548 and 83,935 shares of restricted stock for services during the years ended December 31, 2021 and 2020, respectively, and there was no unrecognized stock-based compensation expense related to restricted stock issued. Stock-Based Compensation Expense The Company recognized stock-based compensation expense related to the types of awards discussed above as follows: Schedule of Recognized Stock-based Compensation Expense
|  | 2021 |  |  | 2020 |
|  | Years Ended December 31, |
|  | 2021 |  |  | 2020 |
Options |  | $ | 292,754 |  |  | $ | 901,345 |
Restricted stock units |  |  | 5,164,750 |  |  |  | 500,861 |
Warrants |  |  | - |  |  |  | 303,802 |
Stock |  |  | 51,900 |  |  |  | 1,032,033 |
Total stock-based compensation expense |  | $ | 5,509,404 |  |  | $ | 2,738,041 |

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