Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Stockholders' Equity

12. Stockholders’ Equity

Preferred Stock

Our authorized preferred stock consists of 10,000,000 shares of preferred stock with a par value of $0.001, of which no shares have been issued or were outstanding as of December 31, 2019 and 2018.  Preferred stock is to be designated in classes or series and the number of each class or series and the voting powers, designations, preferences, limitations, restrictions, relative rights, and distinguishing designation of each class or series of stock as the Board of Directors shall determine in its sole discretion.

Common Stock

Our authorized common stock consists of 200,000,000 shares of common stock with a par value of $0.001, of which 15,372,905 and 15,328,870 shares were issued and outstanding as of December 31, 2019 and 2018, respectively.

Employee Stock Purchase Plan

On September 17, 2014, our stockholders approved our 2014 Employee Stock Purchase Plan (“ESPP”). We recorded expense of $31,848 and $17,738 related to the ESPP during the years ended December 31, 2019 and 2018, respectively.

During the year ended December 31, 2019, we issued an aggregate 44,035 shares of common stock for $70,668, all to employees under our ESPP, as follows:

• On May 14, 2019, we issued 21,283 shares for $29,669 for options that vested and were exercised.

• On November 14, 2019, we issued 22,752 shares for $40,999 for options that vested and were exercised.

During the year ended December 31, 2018 we issued an aggregate 26,415 shares of common stock for $40,380, all to employees under our ESPP, as follows:

• On May 16, 2018, we issued 10,928 shares for $18,396 for options that vested and were exercised.

• On November 16, 2018, we issued 15,487 shares for $21,984 for options that vested and were exercised. 

Warrants

During the year ended December 31, 2019, we did not issue any warrants, no holders exercised warrants, and warrants to purchase 1,212,505 shares of common stock expired.  During the year ended December 31, 2018, we did not issue any warrants and no holders exercised warrants.

The following table summarizes the warrants issued and outstanding as of December 31, 2019:

Warrants Issued and Outstanding as of December 31, 2019
	Date of		Exercise		Shares of
Description	Issuance	Expiration	Price		Common Stock
Exercisable warrants
Warrants	3/30/2016	3/30/2021	$	3.88		521,060
Total warrants issued and outstanding						521,060

Incentive Compensation Plan

In October 2012, we adopted our 2012 Incentive Compensation Plan (the “2012 Plan”) as the sole plan for providing equity-based incentive compensation to our employees, non-employee directors, and other service providers. The plan allows for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights, performance awards, and other incentive awards to our employees, non-employee directors, and other service providers who are in a position to make a significant contribution to our success and our affiliates. The purpose of the plan is to attract and retain individuals, further align employee and stockholder interests, and closely link compensation with our performance. The plan is administered by the compensation committee of our board of directors. Our policy is to fulfill any exercise of options from common stock that is authorized and unissued. The maximum number of shares of common stock available for grant under the plan is 4,837,500. The number of shares available for award under the plan is subject to adjustment for certain corporate changes in accordance with the provisions of the plan.

Stock Options

The following table summarizes the stock option activity from January 1, 2018 through December 31, 2019:

	Stock Options
					Weighted-
				Exercise	Average
	Number			Price Per	Exercise Price
	of Shares			Share	Per Share
Outstanding at January 1, 2018		1,389,816		$1.17 — $26.00	$	8.39
Granted		420,500		$1.65  —  $2.62	$	2.38
Canceled/Forfeited		(37,250	)	$2.39 — $23.20	$	5.98
Outstanding at December 31, 2018		1,773,066		$1.17 — $26.00	$	7.02
Granted		1,074,515		$1.51  —  $3.12	$	1.93
Canceled/Forfeited		(402,128	)	$1.51 — $26.00	$	15.64
Outstanding at December 31, 2019		2,445,453		$1.17 — $23.20	$	3.37

The weighted-average grant-date fair value of options granted was $1.23 and $1.71 for the years ended December 31, 2019 and 2018, respectively.

For the years ended December 31, 2019 and 2018, the intrinsic value of options outstanding was approximately $360,573 and $7,220, respectively, and the intrinsic value of options exercisable was approximately $53,259 and $7,220, respectively.

The following additional information applies to options outstanding at December 31, 2019:

Range of Exercise Prices	Outstanding at December 31, 2019		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Exercisable at December 31, 2019		Weighted- Average Exercise Price
$1.17 - $23.20		2,445,453		7.6	$	3.37		1,209,087	$	4.47

The following additional information applies to options outstanding at December 31, 2018:

Range of Exercise Prices	Outstanding at December 31, 2018		Weighted- Average Remaining Contractual Life		Weighted- Average Exercise Price		Exercisable at December 31, 2018		Weighted- Average Exercise Price
$1.17 - $26.00		1,773,066		6.9	$	7.02		999,999	$	10.05

Stock-based compensation expense for stock-based incentive awards was $1,019,409 and $775,851 for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019, the balance of unearned stock-based compensation to be expensed in future periods related to unvested share-based awards was approximately $1.4 million. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately 2 years.

Stock-Based Compensation

We account for all stock-based payment awards made to employees and directors, including stock options and employee stock purchases, based on estimated fair values. We estimate the fair value of share-based payment awards on the date of grant using an option-pricing model and the value of the portion of the award is recognized as expense over the requisite service period.  We recognize the effects of forfeitures in compensation cost when they occur.

We use the Black-Scholes-Merton option-pricing model as our method of valuation. The fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. The fair value of share-based payment awards on the date of grant as determined by the Black-Scholes-Merton model is affected by our stock price as well as other assumptions. These assumptions include the expected stock price volatility over the term of the awards, and the actual and projected employee stock option exercise behaviors.

The weighted-average estimated value of employee stock options granted during the years ended December 31, 2019 and 2018 were estimated using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions:

	Years Ended December 31,
	2019			2018
Expected volatility		76	%		85	%
Risk-free interest rate		2.37	%		2.42	%
Expected dividends		0.00	%		0.00	%
Expected term in years		5.8			5.9

Deferred Stock Units – Effective September 1, 2019, nonemployee directors can elect to receive all or a portion of their annual retainers in the form of DSUs.  The DSUs are recognized at their fair value on the date of grant.  Each DSU represents the right to receive one share of our common stock following the completion of a director’s service.  During the year ended December 31, 2019, we granted 14,451 DSUs and recorded director compensation expense of $34,649 related to the grants.