Stock Based Compensation

 

Stock based compensation consists of the amortization of common stock, stock options and warrants issued for prepaid services.  For the three months ended March 31, 2020 and 2019, stock based compensation amounted to $114,640 and $0, respectively.  Such expense is classified in selling, general and administrative expenses.

 

Common Stock

 

As of January 1, 2020, and pursuant to an advisory agreement dated as of November 20, 2019 and effective as of January 1, 2020 for a term of one year with a nonaffiliated third party, the Company issued 1,000,000 shares of common stock of the Company to such third party as and for the entire compensation to be paid for all services to be rendered during the term. These shares of common stock were valued at $200,000 in accordance with FASB ASC Topic 718. The fair value of the shares is being amortized to selling, general and administrative expenses within the Company’s condensed consolidated statements of operations over one year.

 

Stock Options

 

The Company accounts for stock-based compensation awards in accordance with the provisions of ASC 718, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the condensed consolidated financial statements over the vesting period based on the estimated fair value of the awards.

 

A summary of stock option activity for the three months ended March 31, 2020 is presented below: 

 

		Number of Shares				Weighted Average Exercise Price				Weighted Average Remaining Contractual Life (years)				Aggregate Intrinsic Value
January 1, 2020			12,553,326			$	0.55				4.02			$	927
Grants			-				-				-
Expirations			-				-				-
March 31, 2020			12,553,326			$	0.55				3.77			$	-
Options exercisable at:
March 31, 2020			12,553,326			$	0.55				3.77			$	-

 

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.16 as of March 31, 2020, which would have been received by the option holders had all option holders exercised their options as of that date.