XML 31 R14.htm IDEA: XBRL DOCUMENT

Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Note 8 - Stock-Based Compensation

a) Warrants

The following table summarizes the changes in warrants outstanding of the Company during the years ended December 31, 2021 and December 31, 2020:

				Weighted Average
	Number of			Exercise Price
	Warrants			$
Outstanding at December 31, 2019		190,000			2.90
Granted		50,000			3.45
Exercised		(25,000	)		2.47
Expired		(40,000	)		4.53
Outstanding at December 31, 2020		175,000			2.75
Granted		310,000			4.52
Exercised		-			-
Expired		-			-
Outstanding at December 31, 2021		485,000			3.88

Exercisable at December 31, 2021		175,000			2.75

2021

Effective January 1, 2021, the Company granted warrants to purchase 125,000 shares of common stock to a Company employee for services to the Company. These warrants vest on January 1, 2022 (subject to continued employment through such date) and expire on January 1, 2027, with an exercise price of $3.95 per share. The Company has calculated the estimated fair market value of these warrants at $242,877, using the Black-Scholes model and the following assumptions: term 3.5 years, stock price $3.80, exercise price $3.95, 74.53% volatility, 0.50% risk free rate, and no forfeiture rate.

Effective February 1, 2021, the Company granted warrants to purchase 185,000 shares of common stock to a Company employee for services to the Company. These warrants vest on February 1, 2022 (subject to continued employment through such date) and expire on February 1, 2027, with an exercise price of $4.90 per share. The Company has calculated the estimated fair market value of these warrants at $459,352, using the Black-Scholes model and the following assumptions: term 3.5 years, stock price $4.80, exercise price $4.90, 75.03% volatility, 0.59% risk free rate, and no forfeiture rate.

2020

Effective February 26, 2020, the vesting criteria of the remaining installment of a warrant originally granted March 20, 2013 to an officer of the Company, and previously amended, was deemed met pursuant to the approval of the Compensation Committee, resulting in the vesting of the Warrant as to 125,000 shares effective February 26, 2020, with an expiration date of February 26, 2023.

Effective March 1, 2020, the Company granted warrants to purchase 50,000 shares of common stock to a Company employee for services to the Company. These warrants vest on September 1, 2021 (subject to continued employment through such date) and expire on March 1, 2026, with an exercise price of $3.45 per share. The Company has calculated the estimated fair market value of these warrants at $86,771, using the Black-Scholes model and the following assumptions: term 3.75 years, stock price $3.44, exercise price $3.45, 69.03% volatility, 0.95% risk free rate, and no forfeiture rate.

Below is a table summarizing the warrants issued and outstanding as of December 31, 2021. The warrants outstanding have a weighted average price of $3.88 per share and an aggregate weighted average remaining contractual life of 3.96 years. The warrants exercisable have a weighted average price of $2.75 per share.

						Weighted Average		Proceeds to
				Exercise		Remaining		Company if
Number		Number		Price		Contractual		Exercised
Outstanding		Exercisable		$		Life (Years)		$
	125,000		125,000		2.47		1.15		308,750
	50,000		50,000		3.45		4.17		172,500
	125,000		-		3.95		5.01		493,750
	185,000		-		4.90		5.09		906,500
	485,000		175,000						1,881,500

Stock-based compensation expense related to warrants of $701,781 and $68,541 was recorded for the years ended December 31, 2021, and December 31, 2020, respectively. Total remaining unrecognized compensation cost related to non-vested warrants is approximately $39,013 and is expected to be recognized over a period of 0.09 years. As of December 31, 2021, the total intrinsic value of warrants was $83,750.

b) Options

The Company currently has options outstanding under both its 2011 Equity Incentive Plan (the “2011 Plan”) (for option issuances prior to 2016,) and its 2015 Stock Incentive Plan (the “2015 Plan”) (for option issuances commencing in 2016). Effective as of January 1, 2016, no additional awards were or may be made under the 2011 Plan.

The 2015 Plan was adopted by the Board of Directors on August 18, 2015 and approved by the stockholders at an annual meeting held on October 30, 2015. On August 5, 2016, the Board of Directors adopted an amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 750,000 shares to an aggregate maximum of 1,750,000 shares, which amendment was approved by the stockholders at an annual meeting held on October 7, 2016. On June 13, 2017, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 750,000 shares to an aggregate maximum of 2,500,000 shares, which amendment was approved by the stockholders at an annual meeting held on September 8, 2017. On June 15, 2018, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 750,000 shares to an aggregate maximum of 3,250,000 shares, which amendment was approved by the stockholders at an annual meeting held on September 7, 2018.

On March 27, 2019, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 1,000,000 shares to an aggregate maximum of 4,250,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 14, 2019. On March 31, 2021, the Board of Directors adopted a subsequent amendment to the 2015 Plan to increase the number of shares of common stock available for issuance under such Plan by 1,750,000 shares to an aggregate maximum of 6,000,000 shares, which amendment was approved by the stockholders at an annual meeting held on June 17, 2021.

The 2015 Plan permits the grant of incentive stock options, non-statutory stock options, restricted stock awards, stock bonus awards, stock appreciation rights, restricted stock units and performance awards. The primary purpose of the 2015 Plan is to enhance the Company’s ability to attract and retain the services of qualified employees, officers, directors, consultants and other service providers upon whose judgment, initiative and efforts the successful conduct and development of the Company’s business largely depends, and to provide additional incentives to such persons or entities to devote their utmost effort and skill to the advancement and betterment of the Company, by providing them an opportunity to participate in the ownership of the Company that is tied to the Company’s performance, thereby giving them an interest in the success and increased value of the Company. The 2015 Plan is administered by the Compensation Committee comprised solely of members of the Board of Directors or by the Board of Directors as a whole.

The following table summarizes the changes in options outstanding of the Company during the years ended December 31, 2021 and December 31, 2020:

				Weighted Average
	Number of			Exercise Price
	Options			$
Outstanding at December 31, 2019		4,169,301			3.88
Granted		845,000			3.60
Exercised		(691,599	)		2.81
Expired/Cancelled		(44,083	)		4.21
Outstanding at December 31, 2020		4,278,619			4.00
Granted		1,090,000			3.41
Exercised		(277,634	)		4.19
Expired/Cancelled		(63,467	)		3.64
Outstanding at December 31, 2021		5,027,518			3.87

Exercisable at December 31, 2021		3,937,518			4.00

2021

Effective May 20, 2021, the Company granted stock options to purchase 40,000 shares of common stock to a Company employee in exchange for services provided to the Company. These options vest on May 20, 2022 and were initially scheduled to expire six years after the grant date, with an exercise price of $3.60 per share. The Company extended the expiration date to ten years after the original grant date. The Company has calculated the estimated fair market value of these options at $73,641, using the Black-Scholes model and the following assumptions: term 3.5 years, stock price $3.50, exercise price $3.60, 76.16% volatility, 0.58% risk free rate, and no forfeiture rate.

During the year ended December 31, 2021, the Company modified a total of 3,342,518 options to extend their expiration dates to ten years from the original dates of grant. This resulted in $2,450,349 of expense.

The following table summarizes the amendments to the expiration dates of various options approved during the year ended December 31, 2021. Except as otherwise noted, the expiration dates for all options in the table below were extended from six years to ten years from the original date of grant.

Amendment		Equity Incentive	Stock Options		Grant	New Expiration	Option Expense
Date		Plan	#		Date	Date	$
July 14, 2021	(i)	2011		292,000	July 23, 2015	July 23, 2025		442,273
July 14, 2021		2011		6,367	March 20, 2013	March 20, 2023		4,151
July 14, 2021		2011		8,151	September 2, 2013	September 2, 2023		6,009
September 21, 2021		2015		335,000	April 13, 2020	April 13, 2030		163,945
September 21, 2021	(ii)	2015		89,163	January 23, 2018	January 23, 2028		24,194
September 21, 2021	(ii)	2015		308,066	February 13, 2017	February 13, 2027		127,719
November 3, 2021		2015		760,000	April 15, 2016	April 15, 2026		984,511
November 3, 2021		2015		15,000	June 23, 2016	June 23, 2026		19,582
November 3, 2021		2015		50,000	January 1, 2017	January 1, 2027		32,456
November 3, 2021		2015		387,934	March 30, 2017	March 30, 2027		224,901
November 3, 2021		2015		615,837	January 23, 2018	January 23, 2028		213,646
December 8, 2021		2015		425,000	April 13, 2020	April 13, 2030		180,267
December 8, 2021		2015		10,000	December 1, 2020	December 1, 2030		5,209
December 8, 2021		2015		40,000	May 20, 2021	May 20, 2031		21,486
				3,342,518				2,450,349

(i)	The expiration date of these options were extended from five and a half years to ten years from the original date of grant.
(ii)	These options were previously amended on December 16, 2019 and amended again on September 21, 2021.

Effective August 3, 2021, the Company approved the granting of options under the 2015 Stock Incentive Plan vesting upon achievement of certain corporate goals (see additional details in Note 10(h)). Pursuant to this approval, the Company granted stock options to purchase an aggregate of 926,640 shares of common stock to various personnel (including directors, executives, members of management and employees of the Company and/or its subsidiaries) in exchange for services provided to the Company and/or its subsidiaries. These options vest over two years with options to purchase up to 463,328 shares vesting on August 3, 2022, and options to purchase up to 463,312 shares vesting on August 3, 2023, subject to continued service by the optionee, and expire 10 years from the date of grant with an exercise price of $3.40 per share. The actual number of options that are eligible for the time-based vesting is contingent upon the timely achievement of certain pre-determined corporate goals by the Company and/or its subsidiaries as set forth in the grant documents. The Company has calculated the estimated fair market value of these options at $1,811,216, using the Black-Scholes model and the following assumptions: term 5.5 years, stock price $3.31, exercise price $3.40, 69.13% volatility, 1.19% risk free rate, and no forfeiture rate.

Effective September 7, 2021, the Company granted stock options to purchase 50,000 shares of common stock to two employees in exchange for services provided to the Company and/or its subsidiaries. These options vest over two years with 25,000 shares vesting on September 7, 2022, and 25,000 shares vesting on September 7, 2023 subject to continued service by the optionee, and expire 10 years from the date of grant with an exercise price of $3.40 per share. The Company has calculated the estimated fair market value of these options at $98,322, using the Black-Scholes model and the following assumptions: term 5.5 years, stock price $3.32, exercise price $3.40, 68.98% volatility, 1.38% risk free rate, and no forfeiture rate.

Effective October 4, 2021, the Company approved the granting of options under the 2015 Plan vesting upon achievement of certain corporate goals (see additional details in Note 10 (h)). Pursuant to this approval the Company granted stock options to purchase 73,360 shares of common stock to an employee in exchange for services provided to the Company and/or its subsidiaries. These options vest over two years with 36,680 shares vesting on October 4, 2022, and 36,680 shares vesting on October 4, 2023, subject to continued service by the optionee, and expire 10 years from the date of grant with an exercise price of $3.40 per share. The actual number of options that are eligible for the time-based vesting is contingent upon the timely achievement of certain pre-determined corporate goals by the Company and/or its subsidiaries as set forth in the grant documents. The Company has calculated the estimated fair market value of these options at $128,003, using the Black-Scholes model and the following assumptions: term 5.5 years, stock price $3.04, exercise price $3.40, 68.80% volatility, 1.49% risk free rate, and no forfeiture rate.

2020

Effective April 13, 2020, the Company granted stock options to purchase 835,000 shares of common stock to various Company personnel (including directors, executives, members of management and employees) in exchange for services provided to the Company. These options vested on April 13, 2021 and were initially scheduled to expire 6 years after the grant date, with an exercise price of $3.60 per share. In 2021, the Company extended the expiration date to ten years after the original grant date for the remaining outstanding options. The Company has calculated the estimated fair market value of these options at $1,481,709, using the Black-Scholes model and the following assumptions: term 3.5 years, stock price $3.52, exercise price $3.60, 72.94% volatility, 0.54% risk free rate, and no forfeiture rate.

Effective December 1, 2020, the Company granted stock options to purchase 10,000 shares of common stock to a Company employee for services to the Company. These options vested on December 1, 2021 and were initially scheduled to expire 6 years after the grant date, with an exercise price of $3.40 per share. In 2021, the Company extended the expiration date to ten years after the original grant date. The Company has calculated the estimated fair market value of these options at $16,315 using the Black-Scholes model and the following assumptions: term 3.5 years, stock price $3.30, exercise price $3.40, 71.60% volatility, 0.55% risk free rate, and no forfeiture rate.

Below is a table summarizing the options issued and outstanding as of December 31, 2021, all of which were issued pursuant to the 2011 Plan (for option issuances prior to 2016) or the 2015 Plan (for option issuances commencing in 2016)and which have a weighted average exercise price of $3.87 per share and an aggregate weighted average remaining contractual life of 6.25 years.

						Weighted Average		Proceeds to
				Exercise		Remaining		Company if
Number		Number		Price		Contractual Life		Exercised
Outstanding		Exercisable		$		(Years)		$
	635,000		635,000		3.25		3.12		2,063,750
	2,717		2,717		3.35		1.67		9,102
	1,060,000		10,000		3.40		9.60		3,604,000
	800,000		760,000		3.60		8.35		2,880,000
	1,682,837		1,682,837		4.00		4.76		6,731,348
	11,801		11,801		4.35		1.44		51,334
	89,163		89,163		4.38		6.07		390,534
	50,000		50,000		4.80		5.01		240,000
	696,000		696,000		5.00		5.24		3,480,000
	5,027,518		3,937,518						19,450,068

Stock-based compensation expense related to stock options of $1,069,605 and $1,220,165 was recorded for the year ended December 31, 2021 and December 31, 2020 respectively. Total remaining unrecognized compensation cost related to non-vested stock options is approximately $1,458,282 and is expected to be recognized over a period of 1.76 years. As of December 31, 2021, the total intrinsic value of stock options was $nil.

As of December 31, 2021, an aggregate of 374,352 shares of common stock remained available for future issuance under the 2015 Plan.

c) Restricted Stock Units (RSUs)

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2021, all of which were issued pursuant to the 2015 Stock Incentive Plan.

				Weighted Average
	Number of			Exercise Price
	RSUs			$
Outstanding at December 31, 2019		-			-
Granted		67,500			3.47
Outstanding at December 31, 2020		67,500			3.47
Granted		789,500			3.33
Vested		(31,250	)		3.55
Cancelled		(15,000	)		3.30
Outstanding at December 31, 2021		810,750			3.33

2021

Effective January 1, 2021, the Company granted RSUs of 5,000 shares of common stock to a Company employee in exchange for services provided to the Company. These RSUs vested immediately, on January 1, 2021 and resulted in the issuance of 3,000 shares (the remaining 2,000 shares were withheld for taxes and returned as authorized shares under the 2015 Plan) and total compensation expense of $19,450.

Effective March 25, 2021, the Company granted aggregate RSUs of 30,000 shares of common stock to two non-executive directors in exchange for services provided to the Company. These RSUs vest over two years, with 50% vesting on each of March 25, 2022 and March 25, 2023, subject to continued service, and will result in total compensation expense of $107,700.

On March 25, 2021, 15,000 RSUs previously granted to a non-executive director were cancelled and returned as authorized shares under the 2015 Plan upon the resignation of such director prior to vesting.

On April 13, 2021, 26,250 RSUs vested and resulted in the issuance of 21,712 shares (the remaining 4,538 shares were withheld for taxes and returned as authorized shares under the 2015 Plan).

Effective May 1, 2021, the Company granted RSUs of 150,000 shares of common stock to an employee in exchange for services provided to the Company. These RSUs vest over three years with 50,000 units vesting on each of May 1, 2022, May 1, 2023 and May 1, 2024, respectively, subject to continued service, and will result in total compensation expense of $496,500.

Effective August 3, 2021, the Company approved the granting of RSUs under the 2015 Plan vesting upon achievement of certain corporate goals (see additional details in Note 10(h)). Pursuant to this approval, the Company granted RSUs of 460,191 shares of common stock to various personnel (including directors, executives, members of management and employees of the Company and/or its subsidiaries) in exchange for services provided to the Company and/or its subsidiaries. The actual number of RSUs that are eligible for the time-based vesting is contingent based upon the timely achievement of certain pre-determined corporate goals by the Company and/or its subsidiaries as set forth in the grant documents as well as continued service by the participant through the applicable vesting date. The RSUs eligible for vesting shall vest over two years with up to 230,102 units vesting on August 3, 2022, and up to 230,089 units vesting on August 3, 2023 and will result in total compensation expense of $1,523,232.

Effective September 7, 2021, the Company granted RSUs of 38,000 shares of common stock to various employees of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries. These RSUs vest over two years with 19,000 units vesting on September 7, 2022, and 19,000 units vesting on September 7, 2023, subject to continued service and will result in total compensation expense of $126,160.

Effective October 4, 2021, the Company approved the granting of RSUs under the 2015 Plan vesting upon achievement of certain corporate goals (see additional details in Note 10 (h)). Pursuant to this approval, the Company granted RSUs of 39,809 shares of common stock to an employee of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries. The actual number of RSUs that are eligible for the time-based vesting is contingent based upon the timely achievement of certain pre-determined corporate goals by the Company and/or its subsidiaries as set forth in the grant documents. These RSUs vest over two years with 19,905 units vesting on October 4, 2022, and 19,904 units vesting on October 4, 2023, subject to continued service by the participant through the applicable vesting dates, and will result in total compensation expense of $121,019.

Effective November 1, 2021, the Company granted RSUs of 43,500 shares of common stock to an employee of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries. These RSUs vest over two years with 21,750 units vesting on November 1, 2022, and 21,750 units vesting on November 1, 2023, subject to continued service and will result in total compensation expense of $152,685.

Effective December 15, 2021, the Company granted RSUs of 23,000 shares of common stock to various employees of the Company and/or its subsidiaries in exchange for services provided to the Company and/or its subsidiaries. These RSUs vest over two years with 11,500 units vesting on December 15, 2022, and 11,500 units vesting on December 15, 2023, subject to continued service and will result in total compensation expense of $77,740.

2020

Effective April 13, 2020, the Company granted RSUs of 52,500 shares of common stock to various Company personnel (including a director and an employee) in exchange for services provided to the Company. These RSUs vest over two years, with 50% vesting on each of April 13, 2021 and April 13, 2022 and will result in total compensation expense of $184,800.

Effective December 1, 2020, the Company granted RSUs of 15,000 shares of common stock to a non-executive director of the Company in exchange for services provided to the Company. These RSUs vest over two years, with 50% vesting on each of December 1, 2021 and December 1, 2022 and will result in total compensation expense of $49,500.

Below is a table summarizing the RSUs issued and outstanding as of December 31, 2021 of which the last to vest have a remaining contractual life of 2.33 years.

				Weighted Average
				Remaining
Number		Share Price		Contractual Life
Outstanding		$		(Years)
	39,809		3.04		1.26
	610,191		3.31		1.10
	38,000		3.32		1.18
	23,000		3.38		1.46
	43,500		3.51		1.34
	26,250		3.52		0.28
	30,000		3.59		0.73
	810,750				1.13

Stock-based compensation expense related to RSUs of $898,910 and $102,786 was recorded in the year ended December 31, 2021, and December 31, 2020, respectively. Total remaining unrecognized compensation cost related to non-vested RSUs is $1,807,140. As of December 31, 2021, the total intrinsic value of RSUs was $3,981.