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Stock Options | 6 Months Ended
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Jun. 30, 2021
Share-based Payment Arrangement [Abstract] |
STOCK OPTIONS | 9. STOCK OPTIONS On April 26, 2018 at the Company’s annual meeting, the Company’s stockholders approved the FlexShopper, Inc. 2018 Omnibus Equity Compensation Plan (the “2018 Plan”). Upon the 2018 Plan’s approval, approximately 1,057,000 shares of Company common stock were available for issuance thereunder. The 2018 Plan replaced the Prior Plans. No new awards will be granted under the Prior Plans; however, awards outstanding under the Prior Plans upon approval of the 2018 Plan remain subject to and will be settled with shares under the applicable Prior Plan. On February 21, 2019, the Company’s Board of Directors approved Amendment No. 1 to the 2018 Plan, subject to stockholder approval. On May 2, 2019, the Company’s stockholders approved the 2018 Plan Amendment that increased (a) the total number of shares available for issuance under the 2018 Plan by 1,000,000 shares and (b) the number of shares available for issuance as “incentive stock options” within the meaning of Internal Revenue Code Section 422 by 1,000,000 shares. On April 24, 2020, the Company’s Board of Directors approved an Amendment to the 2018 Plan, subject to stockholder approval. On June 10, 2020, the Company’s stockholders approved the 2018 Plan Amendment that increased (a) the total number of shares available for issuance under the 2018 Plan by 1,000,000 shares and (b) the number of shares available for issuance as “incentive stock options” within the meaning of Internal Revenue Code Section 422 by 1,000,000 shares. On March 3, 2021, the Company’s Board of Directors approved an Amendment to the 2018 Plan, subject to stockholder approval. On June 9, 2021, the Company’s stockholders approved the 2018 Plan Amendment that increased (a) the total number of shares available for issuance under the 2018 Plan by 2,000,000 shares and (b) the number of shares available for issuance as “incentive stock options” within the meaning of Internal Revenue Code Section 422 by 2,000,000 shares. Grants under the 2018 Plan and the Prior Plans consist of incentive stock options, non-qualified stock options, stock appreciation rights, stock awards, stock unit awards, dividend equivalents and other stock-based awards. Employees, directors and consultants and other service providers are eligible to participate in the 2018 Plan and the Prior Plans. Options granted under the 2018 Plan and the Prior Plans vest over periods ranging from immediately upon grant to a three-year period and expire ten years from date of grant. Activity in stock options for the six months ended June 30, 2021 and June 30, 2020 is as follows:
|  | Number of options |  |  | Weighted average exercise price |  |  | Weighted average contractual term (years) |  |  | Aggregate intrinsic value |
Outstanding at January 1, 2021 |  |  | 2,595,700 |  |  | $ | 1.92 |  |  |  |  |  |  | $ | 2,491,026 |
Granted |  |  | 568,278 |  |  |  | 2.50 |  |  |  |  |  |  |  |  |
Exercise |  |  | (21,333 | ) |  |  | 0.80 |  |  |  |  |  |  |  | 48,496 |
Forfeited |  |  | (25,335 | ) |  |  | 2.28 |  |  |  |  |  |  |  | 30,987 |
Outstanding at June 30, 2021 |  |  | 3,117,310 |  |  |  | 2.03 |  |  |  | 7.17 |  |  |  | 3,555,431 |
Vested and exercisable at June 30, 2021 |  |  | 2,084,461 |  |  |  | 2.01 |  |  |  | 7.19 |  |  |  | 2,635,699 |
Outstanding at January 1, 2020 |  |  | 2,004,318 |  |  | $ | 1.72 |  |  |  |  |  |  | $ | 2,542,361 |
Granted |  |  | 634,756 |  |  |  | 2.58 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (64,330 | ) |  |  | 0.92 |  |  |  |  |  |  |  | 18,520 |
Expired |  |  | (3,333 | ) |  |  | 0.79 |  |  |  |  |  |  |  | 3,166 |
Outstanding at June 30, 2020 |  |  | 2,571,411 |  |  | $ | 1.95 |  |  |  | 7.94 |  |  | $ | 1,165,626 |
Vested and exercisable at June 30, 2020 |  |  | 1,623,746 |  |  | $ | 1.97 |  |  |  | 8.23 |  |  | $ | 971,228 |
The weighted average grant date fair value of options granted during the six-month period ended June 30, 2021 and June 30, 2020 was $1.77 and $1.52 per share respectively. The Company measured the fair value of each option award on the date of grant using the Black-Scholes-Merton (BSM) pricing model with the following assumptions:
|  | Six Months ended |
|  | June 30, |
|  | 2021 |  |  | 2020 |
Exercise price |  | $ | 2.38 to 2.97 |  |  | $ | 1.74 to 2.89 |
Expected life |  |  | 5 years |  |  |  | 5 years |
Expected volatility |  |  | 93 | % |  |  | 71 | %
Dividend yield |  |  | 0 |  |  |  | 0 | %
Risk-free interest rate |  |  | 0.31% to 0.93 | % |  |  | 0.28% to 1.72 | %
The expected dividend yield is based on the Company’s historical dividend yield. The expected volatility is based on the historical volatility of the Company’s common stock. The expected life is based on the simplified expected term calculation permitted by the Securities and Exchange Commission (the “SEC”), which defines the expected life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. The risk-free interest rate is based on the annual yield on the grant date of a zero-coupon U.S. Treasury bond the maturity of which equals the option’s expected life. The value of stock options is recognized as compensation expense by the straight-line method over the vesting period. Compensation expense recorded for options in the consolidated statements of operations was $249,222 and $629,485 for the three and six months ended June 30, 2021, respectively, and $452,033 and $623,848 for the three and six months ended June 30, 2020, respectively. Unrecognized compensation cost related to non-vested options at June 30, 2021 amounted to approximately $ 1,215,000 which is expected to be recognized over a weighted average period of 2.65 years.

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