STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2019

Share-based Payment Arrangement [Abstract]

STOCK-BASED COMPENSATION

11. 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 21,716 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 June 30, 2019, an aggregate of 13,014 of the Company's options are still available for future grant.

During the six months ended June 30, 2019, the Company did not grant any options. During the six months ended June 30, 2018, the Company granted 1,250 options to its employees from the Plans and also granted 3,622 options outside of the Plans. These options become fully vested after four years. The Company estimated that the grant date fair value of options granted utilizing the Black-Scholes option pricing model during the six months ended June 30, 2018 was $513,510, which is being recognized as stock-based compensation expense over the requisite four-year service period. During the six months ended June 30, 2019 and 2018, the Company also issued 9,375 and 1,979, 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 $2,640,102 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 six months ended June 30, 2018, the Company estimated the fair value of stock options granted using the Black-Scholes option pricing model with the following weighted average assumptions:

	Six Months Ended
		June 30, 2018
Weighted average risk-free interest rate		2.41% — 2.80%
Weighted average life (in years)		4.75
Volatility		124.7% — 131.7%
Expected dividend yield		0	%
Weighted average grant-date fair value per share of options granted	$	1,527.94

The options outstanding as of June 30, 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
$480.00 - $560.00	3,725	7.02	$537.76	2,485	$533.15
$1,056.00 - $1,104.00	213	8.03	$1,098.35	99	$1,091.91
$1,208.00 - $1,352.00	72	3.08	$1,306.78	72	$1,306.78
$480.00 - $1,352.00	4,009	7.01	$581.26	2,656	$574.95

Issuances outside of Plans
$640.00 - $1,856.00	4,997	6.90	$1,043.45	1,435	$1,141.96
Total Options
$480.00 - 1,856.00	9,006	6.95	$837.69	4,091	$773.82

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 and six months ended June 30, 2019 and 2018, is comprised as follows:

	Three Months Ended				Six Months Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018
Cost of revenues	$	-	$	-	$	-	$	4,874
Engineering and product development		-		-		-		13,650
Selling and marketing		-		-		-		11,922
General and administrative		162,764		843,016		325,090		1,507,181
Stock-based compensation from Plans	$	162,764	$	843,016	$	325,090	$	1,537,627
Stock-based compensation from issuances outside of Plans		208,231		530,310		667,193		1,273,913
Total Stock-based compensation	$	370,995	$	1,373,326	$	992,283	$	2,811,540

The combination of stock-based compensation of $325,090 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 $414,174, which were issued outside of the Plans, resulted in aggregate stock-based compensation of $370,995 and $992,283 during the three and six months ended June 30, 2019.

A summary of option activity under the Company's stock option plans as of June 30, 2019, and changes during the six 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		12,695		4,328		$	576.40		7.52	$	0
Forfeited		319		(319	)	$	515.61
June 30, 2019		13,014		4,009		$	581.26		7.01	$	0

As of June 30, 2019, there was $484,062 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 2.8 years.