Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

STOCKHOLDERS' EQUITY

Note 9 — Stockholders' Equity

The Company has authorized 50,000,000 shares of common stock, of which 16,575,561 were issued and 16,502,353 outstanding at June 30, 2020; 16,540,478 shares were issued and 16,485,780 were outstanding as of December 31, 2019.

Warrants

The following table summarizes the Company's warrant activity:

	Warrants
	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (In Years)
Outstanding – December 31, 2019		2,032,187		$	6.75		0.51
Granted		—			—		—
Exercised		(83	)		—		—
Expired		(1,894,104	)		—		—
Outstanding – June 30, 2020		138,000		$	6.75		0.94
Exercisable – June 30, 2020		138,000		$	6.75		0.94

The intrinsic value of the common stock warrants was approximately $0 as of June 30, 2020, and December 31, 2019, respectively.

2016 and 2017 Equity Incentive Plans

On January 25, 2018, 80,000 fully vested shares were granted to the Company's nonemployee directors, and stock options covering 229,334 shares with a four-year vesting period were granted to certain employees. The shares were recorded at the fair value of $5.55 per share for a total of $444,000, and the stock options were valued using a Black Scholes model at $3.52 per option using the assumptions noted in the following table:

Expected volatility	67.8	%
Risk-free interest rate	2.5	%
Expected life	6.25 years
Dividend yield	0.0	%

Expected Volatility. Expected volatility is a measure of the amount by which the Company's stock price is expected to fluctuate. Expected volatility is based on the historical volatility of the price of our common shares. The Company estimated the expected volatility of the stock options at grant date.

Risk-Free Interest Rate. The risk-free interest rate is based on the implied yield on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of our stock-based awards.

Expected Term or Life. The expected term or life of stock options granted represents the expected weighted average period of time from the date of grant to the estimated date that the stock option will be fully exercised. The weighted average expected option term is determined using the "simplified method" for options as allowed by the accounting guidance. The "simplified method" calculates the expected term as the average of the vesting term and original contractual term of the options.

The stock options had an intrinsic value of $0 as of June 30, 2020 and December 31, 2019, respectively.

The Company recognizes forfeitures as they occur rather than estimating a forfeiture rate. The reduction of stock compensation expense related to the forfeitures was $0 for the six months ended June 30, 2020 and 2019, respectively.

Unrecognized stock compensation expense was approximately $528,000 as of June 30, 2020, which will be recognized over the remaining vesting period.

A summary of restricted stock activity is presented as follows:

	Shares			Weighted  Average Grant Date Fair Value
Unvested balance at December 31, 2019		80,417		$	5.70
Granted		35,000			4.11
Vested		(66,667	)		5.24
Forfeited		—			—
Unvested balance at June 30, 2020		48,750		$	5.19

The following table summarizes the Company's stock option activity:

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term  (In Years)
Outstanding – December 31, 2019		229,334	$	5.55		8.07
Granted		—		—		—
Exercised		—		—		—
Expired		—		—		—
Outstanding – June 30, 2020		229,334	$	5.55		7.57
Exercisable – June 30, 2020		229,334	$	5.55		7.57

Treasury Stock

The Company accounts for purchases of treasury stock under the cost method, with the cost of such purchases reflected in treasury stock in the accompanying condensed balance sheet. As of June 30, 2020 and December 31, 2019, the Company had 73,208 and 54,698 treasury shares, respectively.