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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2019
Stockholders' Equity Note [Abstract] |
Stockholders' Equity | 7. Stockholders’ Equity The Company has authority to issue up to 51,000,000 shares, consisting of 50,000,000 shares of common stock and 1,000,000 shares of preferred stock. 2011 Equity Incentive Plan The Company’s 2011 Equity Incentive Plan, as amended and restated (the “Plan”), is designed and utilized to enable the Company to provide its employees, officers, directors, consultants and others whose past, present and/or potential contributions to the Company have been, are or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company. A total of 13,000,000 shares of common stock are eligible for issuance under the Plan. The Plan provides for the grant of any or all of the following types of awards: stock options, restricted stock, deferred stock, stock appreciation rights, and other stock-based awards. The Plan is administered by the Company’s Board of Directors, or, at the Board’s discretion, a committee of the Board. Stock Options Options granted under the Plan expire at various times – either five, seven, or ten years from the date of grant, depending on the particular grant. A summary of the Company’s stock option activity for the Current Year is as follows:
|  |  |  |  |  |  | Weighted |  |  |
|  |  |  |  |  |  | Average |  |  |
|  |  |  | Weighted |  | Remaining |  |  |
|  |  |  | Average |  | Contractual |  | Aggregate
|  | Number of |  | Exercise |  | Life |  | Intrinsic
|  | Options |  | Price |  | (in Years) |  | Value
Outstanding at January 1, 2019 |  | 3,257,875 |  | $ | 5.44 |  | 3.19 |  | $ | —
Granted |  | 4,263,000 |  |  | 1.84 |  |  |  |  |
Canceled |  | — |  |  | — |  |  |  |  |
Exercised |  | (7,500) |  |  | 1.73 |  |  |  |  |
Expired/Forfeited |  | (290,750) |  |  | 5.08 |  |  |  |  |
Outstanding at December 31, 2019, and expected to vest |  | 7,222,625 |  | $ | 3.33 |  | 5.82 |  | $ | —
Exercisable at December 31, 2019 |  | 2,671,125 |  | $ | 5.11 |  | 1.95 |  | $ | —
Current Year stock option grants were as follows: On January 1, 2019, the Company granted options to purchase 250,000 shares of common stock to a certain key employee. The exercise price is $3.00 per share, and the vesting of such options is dependent upon the Company achieving certain 12-month sales targets through December 31, 2021. On February 27, 2019, the Company granted options to purchase 2,578,947 shares of common stock to Robert W. D’Loren, the Company’s Chief Executive Officer. The exercise price is $1.70 per share, and the vesting of such options is dependent upon the Company’s common stock achieving certain stock trading prices for a minimum of ten (10) trading days (the "Target Prices"). The vesting of 736,842 shares occur if the Target Prices are equal to or greater than $3.00 per share; 626,316 shares vest if the Target Price is equal to or greater than $5.00 per share; 515,789 shares vest if the Target Price is equal to or greater than $7.00 per share; 405,263 shares vest if the Target Price is equal to or greater than $9.00 per share; and 294,737 shares vest if the Target Price is equal to or greater than $11.00 per share. The options are exercisable until February 27, 2029. As of December 31, 2019, none of the aforementioned Target Price thresholds have been met, and therefore, none of these options have vested. On February 27, 2019, the Company granted options to purchase 552,632 shares of common stock to James F. Haran, the Company’s Chief Financial Officer. The exercise price is $1.70 per share, and the vesting of such options is dependent upon the Company’s common stock achieving certain stock trading prices for a minimum of ten (10) trading days (the "Target Prices"). The vesting of 157,895 shares occur if the Target Prices are equal to or greater than $3.00 per share; 134,211 shares vest if the Target Price is equal to or greater than $5.00 per share; 110,526 shares vest if the Target Price is equal to or greater than $7.00 per share; 86,842 shares vest if the Target Price is equal to or greater than $9.00 per share; and 63,158 shares vest if the Target Price is equal to or greater than $11.00 per share. The options are exercisable until February 27, 2029. As of December 31, 2019, none of the aforementioned Target Price thresholds have been met, and therefore, none of these options have vested. On February 27, 2019, the Company granted options to purchase 368,421 shares of common stock to Seth Burroughs, an officer of the Company. The exercise price is $1.70 per share, and the vesting of such options is dependent upon the Company’s common stock achieving certain stock trading prices for a minimum of ten (10) trading days (the "Target Prices"). The vesting of 105,263 shares occur if the Target Prices are equal to or greater than $3.00 per share; 89,474 shares vest if the Target Price is equal to or greater than $5.00 per share; 73,684 shares vest if the Target Price is equal to or greater than $7.00 per share; 57,895 shares vest if the Target Price is equal to or greater than $9.00; and 42,105 shares vest if the Target Price is equal to or greater than $11.00 per share. The options are exercisable until February 27, 2029. As of December 31, 2019, none of the aforementioned Target Price thresholds have been met, and therefore, none of these options have vested. On March 13, 2019, the Company granted options to purchase an aggregate of 154,000 shares of common stock to various employees. The exercise price of the options is $1.73 per share, and all options vested immediately on the date of grant. On March 15, 2019, the Company granted options to purchase 50,000 shares of common stock to a certain key employee. The exercise price of the options is $5.50 per share, and all options vested immediately on the date of grant. On April 1, 2019, the Company granted options to purchase an aggregate of 150,000 shares of common stock to non-management directors. The exercise price of the options is $1.70 per share, and 50% of the options shall vest on each of April 1, 2020 and April 1, 2021. On April 15, 2019, the Company granted options to purchase an aggregate of 24,000 shares of common stock to certain employees. The exercise price of the options is $1.40 per share, and 50% of the options shall vest on each of April 15, 2020 and April 15, 2021. On May 1, 2019, the Company granted options to purchase 10,000 shares of common stock to an employee. The exercise price of the options is $1.38 per share, and 50% of the options shall vest on each of May 1, 2020 and May 1, 2021. On September 1, 2019, the Company granted options to purchase 15,000 shares of common stock to an employee. The exercise price of the options is $1.59 per share, and one-third of the options shall vest on each of September 1, 2020, September 1, 2021, and September 1, 2022. On October 1, 2019, the Company granted options to purchase 100,000 shares of common stock to an employee. The exercise price of the options is $1.77 per share, and one-third of the options shall vest on each of October 1, 2020, October 1, 2021, and October 1, 2022. On October 31, 2019, the Company granted options to purchase 10,000 shares of common stock to an employee. The exercise price of the options is $1.72 per share, and one-third of the options shall vest on each of October 31, 2020, October 31, 2021, and October 31, 2022. Prior Year stock option grants were as follows: On March 30, 2018, the Company granted options to purchase an aggregate of 50,000 shares of common stock to a certain key employee. The exercise price of the options is $5.50 per share, and all options vested immediately on the date of grant. On April 2, 2018, the Company granted options to purchase an aggregate of 150,000 shares of common stock to non-management directors. The exercise price of the options is $3.00 per share, and 50% of the options vest on each of April 2, 2019 and April 2, 2020. On October 15, 2018, the Company granted options to purchase an aggregate of 15,000 shares of common stock to a certain key employee. The exercise price of the options is $2.04 per share, and one-third of the options vest on each of October 15, 2019, October 15, 2020, and October 15, 2021. On November 21, 2018, the Company granted options to purchase an aggregate of 35,000 shares of common stock to a certain key employee. The exercise price of the options is $2.25 per share, and 50% of the options vest on each of September 30, 2019 and September 30, 2020. The fair value of the options granted was estimated at the date of grant using the Black-Scholes option pricing model with the following assumptions:
|  | Year Ended December 31, |
|  | 2019 |  | 2018 |
Expected Volatility |  | 20.69 – 26.21 |  | 20.91 – 29.65 |
Expected Dividend Yield |  | — | % | — | %
Expected Life (Term, in years) |  | 2.5 – 3.5 |  | 2.5 – 3.5 |
Risk-Free Interest Rate |  | 1.51 – 2.48 | % | 2.33 – 2.96 | %
Compensation expense related to stock options for the Current Year and Prior Year was approximately $0.5 million and $1.1 million, respectively. Total unrecognized compensation expense related to unvested stock options at December 31, 2019 amounts to approximately $0.3 million and is expected to be recognized over a weighted average period of 1.96 years. The following table summarizes the Company’s stock option activity for non-vested options for the current year:
|  |  |  | Weighted
|  |  |  | Average
|  | Number of |  | Grant Date
|  | Options |  | Fair Value
Balance at January 1, 2019 |  | 1,481,079 |  | $ | 1.23
Granted |  | 4,263,000 |  |  | 0.03
Vested |  | (1,124,914) |  |  | 0.94
Forfeited or Canceled |  | (67,665) |  |  | 0.99
Balance at December 31, 2019 |  | 4,551,500 |  | $ | 0.18
Warrants Warrants granted by the Company expire at various times – either five, seven, or ten years from the date of grant, depending on the particular grant. A summary of the Company’s warrant activity for the Current Year is as follows:
|  |  |  |  |  |  | Weighted |  |  |
|  |  |  |  |  |  | Average |  |  |
|  |  |  | Weighted |  | Remaining |  |  |
|  |  |  | Average |  | Contractual |  | Aggregate
|  | Number of |  | Exercise |  | Life |  | Intrinsic
|  | Warrants |  | Price |  | (in Years) |  | Value
Outstanding and exercisable at January 1, 2019 |  | 1,214,815 |  | $ | 9.32 |  | 1.66 |  | $ | —
Granted |  | 115,000 |  |  | 3.17 |  |  |  |  |
Canceled |  | — |  |  | — |  |  |  |  |
Exercised |  | — |  |  | — |  |  |  |  |
Expired/Forfeited |  | (750,000) |  |  | 12.00 |  |  |  |  |
Outstanding and exercisable at December 31, 2019 |  | 579,815 |  | $ | 4.63 |  | 2.32 |  | $ | —
On July 18, 2019, the Company granted warrants to purchase an aggregate of 115,000 shares of common stock. The exercise price of the warrants is $3.17 per share, and one-third of the options vested on each of July 25, 2019, August 24, 2019, and September 23, 2019. The Company did not grant any warrants to purchase shares of common stock during the Prior Year. Compensation expense related to warrants was approximately $14,000 in the Current Year. No compensation expense was recorded in the Prior Year related to warrants. Restricted Stock A summary of the Company’s restricted stock activity for the Current Year is as follows:
|  |  |  | Weighted
|  | Number of |  | Average
|  | Restricted |  | Grant Date
|  | Shares |  | Fair Value
Outstanding at January 1, 2019 |  | 1,460,210 |  | $ | 4.82
Granted |  | 60,000 |  |  | 1.70
Canceled |  | — |  |  | —
Vested |  | (289,587) |  |  | 6.26
Expired/Forfeited |  | — |  |  | —
Outstanding at December 31, 2019 |  | 1,230,623 |  | $ | 4.33
Current Year restricted stock grants were as follows: On February 27, 2019, the Company entered into a two-year employment agreement with a key employee, which includes a performance stock bonus of up to $90,000 for each of the years ended December 31, 2019 and 2020. The performance stock bonus is earned upon the Company achieving certain sales targets. On April 1, 2019, the Company issued an aggregate of 60,000 shares of stock to certain non-management directors, which will vest evenly over two years, whereby 50% shall vest on April 1, 2020, and 50% shall vest on April 1, 2021. Prior Year restricted stock grants were as follows: On March 14, 2018, the Company issued an aggregate of 90,209 shares of stock to certain non-executive employees, which vested immediately. On April 2, 2018, the Company issued an aggregate of 48,000 shares of stock to certain non-management directors, which vest evenly over two years, whereby 50% vested on April 2, 2019, and 50% shall vest on April 2, 2020. On April 3, 2018, the Company issued an aggregate of 25,599 shares of stock to certain non-executive employees, which vested immediately. On May 31, 2018, the Company issued an aggregate of 1,664 shares of stock to certain non-executive employees, which vested immediately. On June 5, 2018, the Company issued of 7,000 shares of stock to a consultant, which vested immediately. On October 15, 2018, the Company issued 10,000 shares of stock to a consultant, which vested immediately. On October 15, 2018, the Company issued 8,334 shares of stock to a consultant, which vested immediately. Notwithstanding the foregoing, each grantee may extend the first anniversary of all or a portion of the restricted stock by six months and, thereafter one or more times may further extend such date with respect to all or a portion of the restricted stock until the next following date exactly six months thereafter, by providing written notice of such election to extend such date with respect to all or a portion of the restricted stock prior to such date. Compensation expense related to restricted stock grants for the Current Year and Prior Year was approximately $0.5 million and $0.7 million, respectively. Total unrecognized compensation expense related to unvested restricted stock grants at December 31, 2019 amounts to $0.1 million and is expected to be recognized over a weighted average period of 1.07 years. The following table provides information with respect to restricted stock purchased and retired by the Company during the Current Year and Prior Year.
|  |  |  |  |  |  | Number of |  |  |
|  |  |  |  |  |  | Shares |  |  |
|  |  |  |  |  |  | Purchased as |  |  |
|  |  |  |  |  |  | Part of |  |  |
|  | Total Number |  | Actual |  | Publicly |  | Fair value of
|  | of Shares |  | Price Paid |  | Announced |  | Re-Purchased
Date |  | Purchased |  | per Share |  | Plan |  | Shares
September 30, 2019 (i) |  | 18,147 |  | $ | 1.34 |  | — |  | $ | 25,000
October 31, 2019 (i) |  | 29,189 |  |  | 1.75 |  | — |  |  | 51,000
November 30, 2019 (i) |  | 57,980 |  |  | 1.45 |  | — |  |  | 84,000
December 31, 2019 (i) |  | 9,846 |  |  | 1.45 |  | — |  |  | 14,000
Total 2019 |  | 115,162 |  | $ | 1.51 |  | — |  | $ | 174,000
March 31, 2018 (i) |  | 43,638 |  | $ | 3.25 |  | — |  | $ | 142,000
April 30, 2018 (i) |  | 181,486 |  |  | 3.09 |  | — |  |  | 560,000
May 31, 2018 (i) |  | 107 |  |  | 2.80 |  | — |  |  | —
November 30, 2018 (i) |  | 145,920 |  |  | 2.27 |  | — |  |  | 331,000
Total 2018 |  | 371,151 |  | $ | 2.79 |  | — |  | $ | 1,033,000
| (i) |  | The shares were exchanged from employees and directors in connection with the income tax withholding obligations on behalf of such employees and directors from the vesting of restricted stock.
All of the shares of restricted stock in the preceding table were originally granted to employees and directors as restricted stock pursuant to the Plan. Shares Available Under the Company’s 2011 Equity Incentive Plan At December 31, 2019, there were 1,900,793 shares of common stock available for issuance under the Plan. Shares Reserved for Issuance At December 31, 2019, there were 9,703,233 shares of common stock reserved for issuance pursuant to unexercised warrants and stock options, or available for issuance under the Plan. Dividends The Company has not paid any dividends to date.

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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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