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Common Stock Options and Restricted Stock Units (RSU's)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Common Stock Options and Restricted Stock Units (RSU's)

Common Stock Options

Stock options are awarded to the Company’s employees, consultants and non-employee members of the board of directors under the 2016 Omnibus Incentive Plan (the “Omnibus Plan”) and are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The aggregate fair value of these stock options granted by the Company during the nine months ended September 30, 2020 was determined to be $197,533 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 99% to 119%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 10 years. A summary of option activity under the Company’s Omnibus Plan as of September 30, 2020, and changes during the year then ended, is presented below:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
Balance outstanding at December 31, 2019		3,449,319		$	2.32		8.26
Granted		145,418			1.53		9.39
Exercised		-			-		-
Forfeited		-			-		-
Cancelled or expired		(190,863	)		-		-
Balance outstanding at September 30, 2020		3,403,874		$	2.19		7.66
Exercisable at September 30, 2020		863,925		$	4.20		5.24

Restricted Stock Units

A restricted stock unit grants a participant the right to receive one share of common stock, following the completion of the requisite service period. Restricted stock units are classified as equity. Compensation cost is based on the Company’s stock price on the grant date and is recognized on a straight-line basis over the vesting period for the entire award.

As a cash-conserving measure taken in light of the adverse economic conditions caused by the COVID-19 pandemic, the Company reduced the cash salaries of members of management by 33% for the remainder of 2020, including the salaries of its named executive officers. In lieu of cash, the Company is paying this portion of management salaries in the form of restricted stock units (the “RSU’s”) that vest over the remainder of the year. Additionally, the Company amended its Non-Employee Director Compensation Policy to provide that its non-employee directors’ annual retainers for the second, third and fourth fiscal quarters of 2020 will also be paid in in the form of RSU’s rather than cash.

On April 9, 2020, the Company granted 674,019 RSU’s to non-employee directors and certain members of management. The 461,146 RSU’s granted to management vest daily over the term through December 31, 2020. The 212,873 RSU’s granted to directors’ vest in three equal quarterly installments on the last date of the second, third and fourth fiscal quarters of 2020. The total fair value of the RSU’s granted on April 9, 2020 was $471,813, based on the grant date closing price of $0.70 per share.

As of September 30, 2020 the Company had issued and vested the following RSU’s:

	Restricted Stock Units Outstanding			Weighted Average Grant Date Fair Value
Balance Outstanding at December 31, 2019		-		$	-
Granted		674,019			0.70
Vested / Released		(422,123	)		-
Forfeited		-			-
Cancelled or expired		-			-
Balance outstanding at September 30, 2020		251,293		$	0.70