14. Stock-Based Compensation
|3 Months Ended|
Mar. 31, 2020
|Share-based Payment Arrangement [Abstract]|
NOTE 14 – STOCK BASED COMPENSATION
Stock based compensation expense for the three months ended March 31, 2020 and 2019 was $432,645 and $588,697, respectively based on the vesting schedule of the stock grants and options. No cash flow affects are anticipated for stock grants.
In January 2017, the Company began granting stock to attract, retain, and reward employees with Common Stock. Stock grants are offered as part of the employment offer package, to ensure continuity of employment or as a reward for performance. Each of these grants requires a specific tenure of employment before the grant vests with typical vesting periods of 1 to 3 years of employment.
In January 2018, the Company implemented an equity incentive plan (the “Plan”) to reward and attract employees and compensate vendors for services when applicable. Stock options are offered as part of an employment offer package, to ensure continuity of service or as a reward for performance. The fair value of the options is calculated using the Black-Scholes pricing model based on the estimated market value of the underlying common stock at the valuation measurement date $0.90, the remaining contractual term of the options of 10 years, risk-free interest rate of 2.75% and expected volatility of the price of the underlying common stock of 100%.
In May 2019, the Company adopted a new equity incentive plan, authorizing an aggregate of 3,500,000 shares of Common Stock for issuance thereunder. Stock grants under the equity incentive programs are valued at the price of the stock on the date of grant. There is a moderate degree of subjectivity involved when estimating the value of the options with the Black Scholes option pricing model as the assumptions used are moderately judgmental. Stock options and stock grants are sometimes offered as part of an employment offer package, to ensure continuity of service or as a reward for performance.
The following schedule shows stock grant activity for the three months ended March 31, 2020:
The following table summarizes stock grant vesting periods.
The following schedule shows stock option activity for the three months ended March 31, 2020.
The following table summarizes stock option vesting periods under the stock options plans.
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef