STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2019

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

Under the Company's 2018 Stock Incentive Plan (the “2018 Plan”), 2017 Stock Incentive Plan (the “2017 Plan”), 2016 Stock Incentive Plan (the “2016 Plan”) and the 2012 Stock Option Plan, as amended (the “2012 Plan”) (collectively, the “Plans”), options may be granted to employees, officers, consultants, service providers and directors of the Company. The Plans, as amended, provide for the issuance of a maximum of 868,632 shares of the Company’s common stock.

Options granted under the Plans have an exercise price equal to or greater than the fair value of the underlying common stock at the date of grant and become exercisable based on a vesting schedule determined at the date of grant. Typically, options granted generally become fully vested after four years. Any options that are forfeited or cancelled before expiration become available for future grants. The options expire between 5 and 10 years from the date of grant. Restricted stock awards granted under the Plans are subject to a vesting period determined at the date of grant. As of March 31, 2019, an aggregate of 520,539 of the Company's options are still available for future grant.

During the three months ended March 31, 2019, the Company did not grant any options. During the three months ended March 31, 2018, the Company did not grant any options from the Plans; however, the Company did grant 38,750 options to its employees outside of the Plans. These options become fully vested after four years. The Company estimated the grant date fair value of options granted utilizing the Black-Scholes option pricing model during the three months ended March 31, 2018 was $1,480,195 which is being recognized as stock-based compensation expense over the requisite four-year service period. During the three months ended March 31, 2019 and 2018, the Company also issued 375,000 and 64,153, respectively, shares of common stock to its consultants and service providers. The Company estimated the grant date fair value of these shares of common stock was $253,019 and $2,457,102, respectively, which was determined from the closing price of the Company’s common stock on the date of issuance.

The Company has valued the options at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the options’ term, exercise price, current stock price, risk-free interest rate estimated over the expected term and estimated volatility of our stock over the expected term 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 as calculated using the simplified method. The estimated volatility was determined based on the historical volatility of our common stock.

During the three months ended March 31, 2018, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions:

	Three Months Ended
	March 31, 2018
Weighted average risk-free interest rate		2.41% — 2.43%
Weighted average life (in years)		5.0
Volatility		124.7%
Expected dividend yield		0%
Weighted average grant-date fair value per share of options granted	$	38.20

The options outstanding as of March 31, 2019, have been classified by exercise price, as follows:

Outstanding				Exercisable
		Weighted
		Average	Weighted		Weighted
		Remaining	Average		Average
Exercise	Number	Contractual	Exercise	Number	Exercise
Price	Outstanding	Life (Years)	Price	Exercisable	Price
$12.00 - $14.00	149,000	7.27	$13.44	96,751	$13.31
$26.40 - $27.60	8,500	8.28	$27.46	3,500	$27.26
$30.20 - $33.80	2,875	3.33	$32.67	2,875	$32.67
$12.00 - $33.80	160,375	7.25	$14.53	103,126	$14.32

Issuances outside of Plans
$16.00 - $46.40	199,875	7.15	$26.09	47,121	$28.87
Total Options
$12.00 - 46.40	360,250	7.20	$20.94	150,247	$18.88

The total stock-based compensation expense related to stock options and stock awards issued pursuant to the Plans to the Company’s employees, consultants and directors, included in reported net loss for the three months ended March 31, 2019 and 2018, is comprised as follows:

	Three Months Ended
	March 31, 2019		March 31, 2018
Cost of revenues	$	-	$	4,874
Engineering and product development		-		13,650
Selling and marketing		-		11,922
General and administrative		162,326		664,165
Stock-based compensation from Plans	$	162,326	$	694,611
Stock-based compensation from issuances outside of Plans		458,962		743,603
Total Stock-based compensation	$	621,288	$	1,438,214

The combination of stock-based compensation of $162,326 from the issuances of equity-based awards pursuant to the Plans and stock-based compensation attributed to stock awards of $253,019 and options of $205,943, which were issued outside of the Plans, resulted in aggregate stock-based compensation of $621,288 during the three months ended March 31, 2019. During the three months ended March 31, 2018, stock-based compensation was comprised of $694,611 from the issuances of equity-based awards pursuant to the Plans and stock-based compensation attributed to stock awards of $576,194 and warrants and options of $167,409, which were issued outside of the Plans, resulted in aggregate stock-based compensation of $1,438,214.

A summary of option activity under the Company's stock option plans as of March 31, 2019, and changes during the three months ended are as follows:

		Outstanding Options
				Weighted
			Weighted	Average
	Shares		Average	Remaining	Aggregate
	Available	Number	Exercise	Contractual	Intrinsic
	for Grant	of Shares	Price	Life (years)	Value
January 1, 2019	507,789	173,125	$14.41	7.52	$0
Forfeited	12,750	(12,750)	$12.89
March 31, 2019	520,539	160,375	$14.53	7.25	$0

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company's closing stock price on March 31, 2019 of $0.29 and the exercise price, multiplied by the number of in-the-money-options).

As of March 31, 2019, there was $403,373 of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted average period of 2.4 years.