Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.19.3
Stockholders' Equity
9 Months Ended
Sep. 30, 2019
Stockholders Equity Note [Abstract]  
Stockholders' Equity

NOTE 9 – STOCKHOLDERS’ EQUITY

The Company’s amended and restated certificate of incorporation filed on December 14, 2017, authorizes the Company to issue 10,000,000 shares of preferred stock and 50,000,000 shares of common stock. On February 1, 2018, in connection with the Company’s initial public offering, each share of the Company’s outstanding Series A, Series B, and Series C, Preferred Stock was automatically converted into a share of the Company’s common stock, par value $0.0001 on a one-for-one basis.            

 

Follow-on Public Offering

 

On May 15, 2019, the Company filed a Form S-3 prospectus with the Securities and Exchange Commission which became effective on June 19, 2019, and allows the Company to offer up to $100,000,000 aggregate dollar amount of shares of its common stock, preferred stock, debt securities, warrants to purchase its common stock, preferred stock or debt securities, subscription rights to purchase its common stock, preferred stock or debt securities and/or units consisting of some or all of these securities, in any combination, together or separately, in one or more offerings, in amounts, at prices and on the terms that the Company will determine at the time of the offering and which will be set forth in a prospectus supplement and any related free writing prospectus.

On June 26, 2019, the Company filed a prospectus supplement relating to its common stock, par value $0.0001 per share, whereby under the prospectus supplement the Company may offer and sell common stock having an aggregate offering price of up to $10,000,000 through Noble Capital Markets, Inc., (“Noble”) acting as the Company’s agent.  As such, the Company entered into an Equity Distribution Agreement with Noble dated as of June 26, 2019.  As of September 30, 2019, the Company has sold 1,554,832 shares of common stock through this offering for total gross proceeds of $2,700,714, which resulted in net proceeds to us of $2,488,148, after deducting compensation payable to Noble of $55,127 and other expenses of $157,439.  The Equity Distribution Agreement with Noble was terminated on August 26, 2019.

Exercise of Stock Options and Warrants

During the nine month periods ended September 30, 2019, the Company issued 330,300 shares of common stock for proceeds of $29,149 in cash related to the exercise of stock options and warrants.  Of the total shares issued, 273,510 shares of common stock were issued as a cashless exercise of stock options. 

 

Stock Options

A summary of stock option activity under each of the Company’s stock option plans during the nine month period ended September 30, 2019 is as follows:

 

 

 

Stock Options Outstanding

 

 

 

Number of

Shares

 

 

Weighted

Average

Exercise

Price

 

 

Weighted

Average

Remaining

Contractual

Life (in years)

 

 

Aggregate

Intrinsic

Value

 

Outstanding at January 1, 2019

 

 

1,968,747

 

 

$

1.14

 

 

 

4.56

 

 

$

1,469,525

 

Granted

 

 

106,000

 

 

$

2.14

 

 

 

5.25

 

 

 

85,390

 

Forfeited / Cancelled

 

 

(62,000

)

 

$

2.04

 

 

 

7.35

 

 

 

57,000

 

Exercised

 

 

(356,669

)

 

$

0.41

 

 

 

0.35

 

 

 

905,523

 

Outstanding at September 30, 2019

 

 

1,656,078

 

 

$

1.33

 

 

 

5.16

 

 

$

2,779,300

 

Exercisable at September 30, 2019

 

 

1,437,732

 

 

$

1.12

 

 

 

4.65

 

 

$

2,663,880

 

Vested and expected to vest at September 30, 2019

 

 

1,650,992

 

 

$

1.32

 

 

 

5.14

 

 

$

2,777,298

 

 

The following table presents details of the assumptions used to calculate the weighted-average grant date fair value of common stock options granted by the Company:

 

 

 

For the Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

Expected term (in years)

 

4.65 - 5.87

 

 

5.81 - 5.88

 

Expected volatility

 

43.7 - 44.4%

 

 

45.9 - 46%

 

Risk-free interest rate

 

2.30 - 2.49%

 

 

2.71 - 2.76%

 

Weighted average grant date fair value per share

 

$

0.68

 

 

 

1.80

 

Grant date fair value of options vested

 

$

656,745

 

 

$

1,387,600

 

Intrinsic value of options exercised

 

$

905,522

 

 

$

1,512,110

 

 

As of September 30, 2019, the amount of unearned stock-based compensation estimated to be expensed from 2019 through 2029 related to unvested common stock options is $222,601, net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is 1.68 years.

If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense or calculate and record additional expense.  Future stock-based compensation expense and unearned stock-based compensation will increase to the extent that the Company grants additional common stock options or other stock-based awards.

Restricted Stock Units

Restricted stock units may be granted at the discretion of the compensation committee of the Board of Directors under the Company’s 2017 Equity Incentive Plan that was adopted on October 10, 2017 (the “2017 Plan”) in connection with the hiring and retention of personnel and are subject to certain conditions.  Restricted stock units generally vest quarterly or semi-annually over a period of one to three years and are typically forfeited if employment is terminated before the restricted stock unit vest.  The compensation expense related to the restricted stock units is calculated as the fair value of the common stock on the grant date and is amortized to expense over the vesting period and is adjusted for estimated forfeitures.

The Company’s restricted stock unit activity for the nine month period ended September 30, 2019 is as follows:

 

 

 

Restricted Stock Units

 

 

 

Number of

Shares

 

 

Weighted

Average Grant

Date Fair Value

 

Unvested at January 1, 2019

 

 

173,335

 

 

$

4.13

 

Granted

 

 

160,000

 

 

$

2.43

 

Vested

 

 

(116,668

)

 

$

3.86

 

Cancelled

 

 

-

 

 

$

-

 

Unvested at September 30, 2019

 

 

216,667

 

 

$

3.02

 

 

 

As of September 30, 2019, there was $545,280 of unrecognized compensation cost related to unvested restricted stock units which is expected to be recognized over a weighted average period of 1.65 years.

 

Stock-based compensation expense for the three and nine month periods ended September 30, 2019 and 2018 was comprised of the following:

 

 

 

For the Three Months Ended September 30,

 

 

For the Nine Months Ended September 30,

 

Stock-based compensation classified as:

 

2019

 

 

2018

 

 

2019

 

 

2018

 

General and administrative

 

$

120,188

 

 

$

185,624

 

 

$

357,679

 

 

$

312,064

 

Production

 

 

18,140

 

 

 

6,595

 

 

 

52,131

 

 

 

13,058

 

Marketing and selling

 

 

15,011

 

 

 

12,460

 

 

 

44,472

 

 

 

23,275

 

Research and development

 

 

11,518

 

 

 

10,167

 

 

 

35,858

 

 

 

26,582

 

 

 

$

164,857

 

 

$

214,846

 

 

$

490,140

 

 

$

374,979

 

 

Warrants

The following table summarizes the Company’s warrant activity during the nine month period ended September 30, 2019:

 

 

 

Number of

Warrants

 

 

Weighted

Average

Exercise Price

 

Warrants outstanding – January 1, 2019

 

 

578,996

 

 

$

4.32

 

Warrants granted

 

 

69,766

 

 

$

2.15

 

Warrants exercised

 

 

(17,815

)

 

$

1.40

 

Warrants outstanding – September 30, 2019

 

 

630,947

 

 

$

4.16