Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Stockholders' Equity

4. Stockholders’ Equity

Stock-Based Compensation Plans

In November 2012, the Company’s 2012 Equity Incentive Plan (the “12 Plan”) was approved by the stockholders. Pursuant to the terms of the 12 Plan, stock options, stock appreciation rights, restricted stock and restricted stock units (sometimes referred to individually or collectively as “awards”) may be granted to officers and other employees, non-employee directors and independent consultants and advisors who render services to the Company. The Company is authorized to issue options to purchase up to 643,797 shares of common stock, stock appreciation rights, or restricted stock in accordance with the terms of the 12 Plan.

In the case of a restricted stock award, the entire number of shares subject to such award would be issued at the time of the grant and subject to vesting provisions based on time or other conditions specified by the Board or an authorized committee of the Board. For awards based on time, should the grantee’s service to the Company end before full vesting occurred, all unvested shares would be forfeited and returned to the Company. In the case of awards granted with vesting provisions based on specific performance conditions, if those conditions were not met, then all shares would be forfeited and returned to the Company. Until forfeited, all shares issued under a restricted stock award would be considered outstanding for dividend, voting and other purposes.

Under the 12 Plan, the exercise price of non-qualified stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted. The exercise price of incentive stock options granted is to be no less than 100% of the fair market value of the Company’s common stock on the date the option is granted provided, however, that if the recipient of the incentive stock option owns greater than 10% of the voting power of all shares of the Company’s capital stock then the exercise price will be no less than 110% of the fair market value of the Company’s common stock on the date the option is granted. The purchase price of the restricted stock issued under the 12 Plan shall also not be less than 100% of the fair market value of the Company’s common stock on the date the restricted stock is granted.

All options granted under the 12 Plan are immediately exercisable by the optionee; however, there is a vesting period for the options. The options (and the shares of common stock issuable upon exercise of such options) vest, ratably, over a 33-month period; however, no options (and the underlying shares of common stock) vest until after three months from the date of the option grant. The exercise price is immediately due upon exercise of the option. The maximum term of options issued under the 12 Plan is ten years. Shares issued upon exercise of options are subject to the Company’s repurchase, which right lapses as the shares vest. The 12 Plan will terminate no later than November 7, 2022. As of June 30, 2020, 424,594 shares of common stock remained available for issuance under the 12 Plan.

The following summarizes the stock option activity for the six months ended June 30, 2020.

						Weighted-
						Average
				Weighted-		Remaining
				Average		Contractual
				Exercise		Life
	Options			Price		(Years)
Outstanding at December 31, 2019		106,077		$	2.77		1.53
Granted		-
Forfeited/cancelled		(13,001	)
Exercised		-
Outstanding at June 30, 2020 (unaudited)		93,076		$	3.03		1.24
Vested and expected to vest at June 30, 2020 (unaudited)		93,076		$	3.03		1.24
Exercisable at June 30, 2020 (unaudited)		93,076		$	3.03		1.24

The following table summarizes information about options outstanding and exercisable as of June 30, 2020.

		Options Outstanding						Options Exercisable
				Weighted		Weighted				Weighted
Range of				Average		Average				Average
Exercise		Number		Remaining		Exercise		Number		Exercise
Price		of Shares		Life (Years)		Price		of Shares		Price
	0.75 - 1.00		14,526		0.53	$	1.00		14,526	$	1.00
	2.00 - 4.00		63,684		1.37		3.21		63,684		3.21
	4.20 - 6.68		14,866		1.40		4.46		14,866		4.46
			93,076						93,076

Shares of Common Stock Issued

During the three-month period ending June 30, 2020, the Company issued a total of 1,600,638 shares of common stock to shareholders for the rights offering at $0.30 per share. The proceeds for these shares were received in April of 2020. During the six-month period, the Company issued total of 1,755,390 shares of common stock, of which 1,600,638 shares for rights offering and 120,000 shares of common stock to two former members of our board of directors that was previously committed to them and included in accrued expenses. The issuance of the 120,000 shares of common stock settles a total of $39,600 of accrued expenses that was included in the Company’s balance sheet.

Warrants

As of June 30, 2020 and December 31, 2019, the Company had 481,335 warrants outstanding. The warrants outstanding at June 30, 2020 are all exercisable at $0.01 and have an expiration date of May 20, 2023.