Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

v3.22.1
Stock Based Compensation
3 Months Ended
Mar. 31, 2022
Stock Based Compensation  
Note 12 - Stock Based Compensation

Note 12 - Stock Based Compensation

 

Stock Based Compensation

 

Stock based compensation consists of the amortization of common stock, stock options and warrants issued to employees, directors and consultants. For the three months ended March 31, 2022 and 2021, stock based compensation expense amounted to $181,747 and $31,910, respectively. Such expense is classified in selling, general and administrative expenses.

 

Common Stock

 

On March 23, 2021, and pursuant to a consulting agreement dated November 1, 2020, as amended on March 19, 2021, with a nonaffiliated third party, the Company issued 500,000 shares of common stock to such party as part of its compensation thereunder. These shares of common stock were valued at $615,000 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over ten months. Pursuant to an amendment dated March 15, 2022 and effective as of December 31, 2021, the nonaffiliated party agreed to forfeit all of such shares which shares were cancelled effective as of December 31, 2021. As such, the previously recorded expense of $615,000 was reversed in December 2021.

 

On March 30, 2021, and pursuant to a business development agreement dated March 30, 2021 with a nonaffiliated third party, the Company issued 25,000 shares of common stock to such party for its compensation thereunder. These shares of common stock were valued at $29,250 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over three months.

 

On December 1, 2021, and pursuant to a consulting agreement dated December 1, 2021 with a nonaffiliated third party, the Company issued 250,000 shares of common stock to such party as part of its compensation thereunder. These shares of common stock were valued at $171,250 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s consolidated statements of operations over 12 months.

Stock Options

 

The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the condensed consolidated financial statements over the vesting period based on the estimated fair value of the awards.

 

On January 24, 2022, the Company extended the expiration dates of certain previously granted nonqualified stock options (which were due to expire in February 2022) which were granted to five individuals to acquire an aggregate of 700,000 shares of the Company’s common stock under the Company’s 2014 Equity Plan and the 2017 Equity Plan. Such extended options are exercisable at prices ranging from $1.15 to $1.20 per share, representing the original fair market value of the common stock on the dates of grant as determined under the applicable Equity Plan. The options are fully vested and exercisable and will now expire five years from their original expiration dates. Based on a Black-Scholes valuation model, these options were valued at $138,623, in accordance with FASB ASC Topic 718, which was expensed on the amendment date in selling, general and administrative expenses within the Company’s condensed consolidated statements of operations. 

 

On February 2, 2022, the Company issued 5,181 shares of common stock to a certain option holder upon the cashless exercise of options to purchase an aggregate of 9,750 shares of common stock at exercise prices ranging from $0.20 to $0.33 per share based upon a market price of $0.54 per share as determined under the terms of the options.

 

A summary of stock option activity is presented below:

 

 

 

Number of

Shares

 

 

Weighted

Average

Exercise

 Price

 

 

Weighted

 Average

 Remaining Contractual

 Life (years)

 

 

Aggregate

Intrinsic

Value

 

December 31, 2021

 

 

18,318,326

 

 

$ 0.53

 

 

 

2.89

 

 

$ 2,961,965

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grants

 

 

-

 

 

 

 

 

 

 

-

 

 

$ -

 

Expirations

 

 

(150,000 )

 

$ 1.15

 

 

 

 

 

 

 

 

 

Exercised

 

 

(9,750 )

 

$ 0.25

 

 

 

-

 

 

 

-

 

March 31, 2022

 

 

18,158,576

 

 

$ 0.53

 

 

 

2.86

 

 

$ 1,474,732

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options exercisable at:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

 

18,158,576

 

 

$ 0.53

 

 

 

2.86

 

 

$ 1,474,732

 

 

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.43 as of March 31, 2022, which would have been received by the option holders had all option holders exercised their options as of that date.