Stock-Based Compensation

12 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Note 10: Stock-Based Compensation

The Company grants stock-based instruments under the 2015 Stock Incentive Plan (“Plan”) for which 1,400,000 shares of the Company’s Common Stock has been reserved. The Plan allows for the issuance of incentive stock options and non-qualified stock options with a maximum contractual term of 10 years. Shares and options that are cancelled are available for reissuance under the Plan. For years ended December 31, 2020 and 2019, the Company recorded compensation costs for stock options of $219,718 and $55,828, respectively. Stock options are generally issued with an exercise price at or above the estimated per-share value of the Company’s Common Stock. The Company granted no options during the year ended December 31, 2020 and 640,000 during the year ended December 31, 2019.

Management has valued the options at their date of grant utilizing the Black-Scholes option pricing model. As of the issuance of the outstanding options, there was not a public market for the Company’s shares. Accordingly, the Company utilized the value obtained in equity transactions with unrelated parties to estimate the fair value of the Company’s Common Stock on the date of grant. Volatility of the underlying common shares was determined based on the historical volatility for similar companies that are actively traded in the public markets for a term consistent with the expected life of the options. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options on the date of the grant. Due to the lack of sufficient historical activity, the expected life of the options was estimated using the formula set forth in Securities and Exchange Commission SAB 107.

The following table summarizes the status of the Company’s aggregate stock options granted:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Term(Years)		Total Intrinsic Value
Balance, January 1, 2019		566,667		$	2.33		5.95
Granted		640,000			1.54		9.83
Exercised		—			—		—
Cancelled		(125,000	)		3.00		7.00
Balance, December 31, 2019		1,081,667		$	1.74		7.67
Balance, January 1, 2020		1,081,667		$	1.74		7.67
Granted		—			—		—
Exercised		—			—		—
Cancelled		—			—		—
Balance, December 31, 2020		1,081,667		$	1.74		6.67	$	—
Exercisable at December 31, 2020		688,332		$	1.85		5.44	$	102,667

During the years ended December 31, 2020 and 2019, options for 179,999 and 183,333 shares vested, respectively. As of December 31, 2020, there was $405,449 unrecognized compensation cost related to share-based compensation arrangements that will be recognized over the next two years.