Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Equity [Abstract]

Stockholders' Equity

NOTE 9 – Stockholders’ Equity

Preferred Stock

The Company’s articles of incorporation authorize the Company to issue up to 40,000,000 shares of preferred stock, par value $0.0001 per share, having preferences to be determined by the Board of Directors of the Company for dividends and liquidation of the Company’s assets. Of the 40,000,000 shares of preferred stock the Company is authorized to issue by its articles of incorporation, the Board of Directors has designated up to 3,000,000 shares as Series AA Preferred Stock. 

As of December 31, 2018 and 2017, the Company had no shares of preferred stock outstanding. 

Common Stock

As of December 31, 2018, the Company has 1,358,597 shares of common stock, par value $0.0001, outstanding. The Company’s articles of incorporation authorize the Company to issue up to 300,000,000 shares of common stock. The holders are entitled to one vote for each share on matters submitted to a vote to shareholders, and to share pro rata in all dividends payable on common stock after payment of dividends on any shares of preferred stock having preference in payment of dividends.

Equity Incentive Program

On December 18, 2014, the Company’s Board of Directors approved an Equity Incentive Program (the “Equity Incentive Program”), whereby the Company’s employees could elect to receive equity in lieu of cash for all or part of their salary compensation.

2017 Employee Stock Purchase Plan

On September 29, 2017, subject to stockholder approval, the Company’s Board of Directors approved the Company’s 2017 Employee Stock Purchase Plan (the “2017 ESPP”). The 2017 ESPP was approved by the Company’s stockholders at the Company’s 2017 Annual Meeting of Stockholders on November 14, 2017.

Under the 2017 ESPP, the Company may grant eligible employees the right to purchase our common stock through payroll deductions at a price equal to the lesser of eighty five percent (85%) of the fair market value of a share of common stock on the exercise date of the current offering period or eighty five percent (85%) of the fair market value of our common stock on the grant date of the then current offering period. The first offering period began on November 14, 2017. Thereafter, there will be consecutive six-month offering periods until January 2, 2022, or until the 2017 ESPP is terminated by the Board of Directors of the Company, if earlier. 

The Company recorded stock-based compensation expense related to the 2017 ESPP of approximately $12,000 for the year ended December 31, 2018.

During the year ended December 31, 2018, the Company issued the following shares of common stock for compensation:

During the year ended December 31, 2018, the Company issued an aggregate of 1,200 shares of common stock to an employee of the Company pursuant to the Company’s Equity Incentive Program at a price of $7.50.

During the year ended December 31, 2018, the Company issued an aggregate of 31,355 shares of common stock to directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at prices ranging from $6.38 to $8.13.

During the year ended December 31, 2018, the Company issued an aggregate of 3,778 shares of common stock to eight employees of the Company pursuant to the Company’s ESPP at a price of $5.38 per share.

During the year ended December 31, 2017, the Company issued the following shares of common stock for compensation:

During the year ended December 31, 2017, the Company issued an aggregate of 5,841 shares of common stock to employees of the Company pursuant to the Company’s Equity Incentive Program at prices ranging from $10.00 to $15.00.

During the year ended December 31, 2017, the Company issued an aggregate of 21,080 shares of common stock to directors of the Company pursuant to the Company’s Fiscal Year 2017 Director Compensation Plan at prices ranging from $9.63 to $15.00.

On February 13, 2017, the Company issued an aggregate of 1,280 shares of common stock to two employees of the Company as compensation at a price of $15.63 per share.

During the year ended December 31, 2017, the Company issued the following shares of common stock in connection with the exercise of warrants:

On May 11, 2017, the Company issued an aggregate of 27,500 shares to accredited investors in connection with the exercise of warrants at an exercise price of $10.00 per share.

On August 10, 2017, the Company issued an aggregate of 6,250 shares to accredited investors in connection with the exercise of warrants at an exercise price of $10.00 per share.

In June 2017, the Board of Directors approved the issuance of 8,000 restricted shares of common stock of the Company. The initial value of the restricted stock grant was $72,099, which is being amortized over the estimated service period. These shares will be issued to certain executives upon the Company meeting the following bench marks: 50% will vest when the price per share of the Company’s common stock, based upon a 30-trading day VWAP, is equal to at least $25.00 per share and 50% will vest when the price per share of the Company’s common stock, based upon a 30-trading day VWAP, is equal to at least $43.75 per share.

Throughout the year ended December 31, 2017, the Board of Directors approved the issuance of 17,600 restricted shares of common stock of the Company. The initial value of the restricted stock grant was $150,258, which is being amortized over the estimated service period. These shares will be issued to certain executives and employees upon vesting, which will occur when the price per share of the Company’s common stock, measured and approved based upon a 30-day trading VWAP, is equal to at least $25.00 per share.

On December 29, 2017, the Board of Directors approved the issuance of 16,800 restricted shares of common stock of the Company. These shares will be issued to certain executives upon vesting: 50% of the grant upon the Company reporting its first quarter positive Adjusted EBITDA (as presented by the Company) and 50% of the grant upon the Company reporting its first quarter positive Net Income (GAAP). The value of the shares of $6.25 per share was based on the fair market value of the Company’s common stock on the date of the issuance was approved. The Company will expense the value of the shares when it determines it is probable the performance targets will be achieved. There was no expense recorded during the years ended December 31, 2018 and 2017.

On April 20, 2018, the Board of Directors approved the issuance of 15,640 restricted shares of common stock of the Company. These shares will be issued to certain executives upon vesting: 50% of the grant upon the Company reporting its first quarter positive Adjusted EBITDA (as presented by the Company) and 50% of the grant upon the Company reporting its first quarter positive Net Income (GAAP). The value of the shares of $4.55 per share was based on the fair market value of the Company’s common stock on the date of the issuance was approved. The Company will expense the value of the shares when it determines it is probable the performance targets will be achieved. There was no expense recorded during the year ended December 31, 2018.

A summary of the Company's restricted stock awards (including shares approved but not issued) is presented below:

	Number of Shares			Weighted- Average Grant-Date Fair Value per Share
Unvested at January 1, 2018		114,236		$	8.75
Restricted stock granted		15,640			4.55
Restricted stock vested		—			—
Restricted stock forfeited		(9,280	)		8.73
Unvested at December 31, 2018		120,596		$	8.34

During the year ended December 31, 2018 and 2017, the Company recorded $55,289 and $181,004 respectively, related to the performance and market-based restricted stock awards. 

Options and Warrants

During the year ended December 31, 2018, the Company issued warrants to purchase an aggregate of 84,000 shares of common stock in connection with the issuance of notes payable (see Note 8).

During the year ended December 31, 2017, the Company issued 33,750 shares of common stock in connection with the exercise of stock warrants at an exercise price of $10.00 per share for total proceeds of $337,500 (see Note 11 for additional information about stock options and warrants).