Quarterly report pursuant to Section 13 or 15(d)

Stock Options

Stock Options
3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock Options


On December 20, 2019, the Company adopted its 2019 Omnibus Incentive Plan (the “Plan”).


At its discretion, the Company grants share option awards to certain employees and non-employees under the Plan and accounts for it in accordance with ASC 718, Compensation – Stock Compensation.


A summary of option activity for the three months ended March 31, 2021 is presented below.


          Weighted-     Average        
          Average     Remaining     Aggregate  
          Exercise     Contractual     Intrinsic  
    Options     Price     Life (Years)     Value  
Outstanding at December 31, 2020     6,031,775     $ 1.55       2.68     $ 1,932,000  
Granted     664,000       1.38       -       -  
Forfeited     (564,032 )     1.87       -       -  
Exercised     (332,730 )     1.13       -       -  
Outstanding at March 31, 2021     5,799,013     $ 1.62       2.46     $ 387,000  
Vested March 31, 2021     3,304,078     $ 1.71             $ 322,000  
Exercisable at March 31, 2021     2,023,118     $ 1.94             $ 133,000  


At March 31, 2021, the intrinsic value of the outstanding options was $387,000.


During the quarter ended March 31, 2021, the Company granted stock options to employees to purchase a total of 664,000 shares of Common Stock for services rendered. The options have an average exercise price of $1.76 per share, expire in five years, vesting one and four years from grant date. The total fair value of these options at grant date was approximately $1,103,000 using the Black-Scholes Option Pricing model. The total stock compensation expense recognized relating to the vesting of stock options for the quarter ended March 31, 2021 amounted to $448,000. As of March 31, 2021, the total unrecognized stock-based compensation expense was $4,059,000, which is expected to be recognized as part of operating expense through March 2025. In addition, a total of 332,730 shares of stock options were exercised. As a result of the exercise of the option, the Company issued 332,730 shares of common stock and received cash of $377,000.


The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions:


    Three months ended March 31,  
    2021     2020  
Risk-free interest rate     0.10% - 0.36 %     0.39 %
Average expected term     5 years       5 years  
Expected volatility     240.03 %     270.1 %
Expected dividend yield     -       -  


The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s Common Stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future.