Quarterly report pursuant to Section 13 or 15(d)

9. STOCK-BASED COMPENSATION

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9. STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION

9. STOCK-BASED COMPENSATION

 

The Company’s Amended 2013 Plan provides for the granting of stock options, restricted stock awards, RSU’s, stock bonus awards and performance-based awards. As of September 30, 2018, the Company had 7,237,433 of authorized unissued shares reserved and available for issuance upon exercise and conversion of outstanding awards under the Amended 2013 Plan.

 

The stock options are exercisable at no less than the fair market value of the underlying shares on the date of grant, and restricted stock and restricted stock units are issued at a value not less than the fair market value of the common stock on the date of the grant. Generally, stock options awarded are vested in equal increments ranging from two to four years on the annual anniversary date on which such equity grants were awarded. The stock options generally have a maximum term of 10 years.

 

The Company recognized Selling, General and Administrative (“SG&A”) expenses of $237,882 and $1,328,096, relating to stock options and RSU’s issued to employees, officers, directors and consultants for the three months ended September 30, 2018 and 2017, respectively. The Company recognized SG&A expenses of $1,634,184 and $3,072,224, relating to stock options and RSU’s issued to employees, officer, directors and consultants for the nine months ended September 30, 2018 and 2017, respectively. As of September 30, 2018, total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted to employees, officers, directors and consultants was $2,286,415 which is expected to be recognized over a weighted-average period of 1.87 years.

 

The following table summarizes stock option and RSU activity for the Amended 2013 Plan during the nine months ended September 30, 2018:

 

    Number of Shares     Weighted Average Exercise Price     Weighted Average Remaining Contract Term (Years)     Aggregate Intrinsic Value  
Outstanding - December 31, 2017     15,823,277     $ 0.48       8.54     $ 5,406,499  
Granted     6,969,000       0.52       –       –  
Exercised     (994,432 )     0.35       –       –  
Cancelled/Forfeited     (1,035,278 )     0.36       –       –  
Outstanding - September 30, 2018     20,762,567       0.50       7.78      

89,820,535

  
                                 
Total exercisable - September 30, 2018     15,654,682       0.49       7.36      

67,957,693

  
Total unvested - September 30, 2018     5,107,885       0.55       9.05      

21,862,842

  
Total vested or expected to vest - September 30, 2018     20,762,567       0.50       7.78      

89,820,535

  

  

The following table summarizes unvested stock options as of September 30, 2018:

 

      Number of
Shares		     Weighted
Average
Fair Value
Per Share on
Grant Date		  
  Unvested stock options - December 31, 2017       3,738,615       0.35  
  Granted       6,969,000       0.52  
  Vested       (4,564,452 )     0.36  
  Cancellations       (1,035,278 )     0.31  
  Unvested stock options - September 30, 2018      

5,107,885

       0.55  

 

The following table summarizes stock option activity outside of the Amended 2013 Plan during the nine months ended September 30, 2018:

 

    Number of
Shares		     Weighted
Average
Exercise
Price		     Weighted
Average
Remaining
Contract
Term
(Years)		     Aggregate
Intrinsic
Value		  
Outstanding - December 31, 2017     7,250,000     $ 0.37       8.03     $ 32,336,000  
Granted     –       –       –       –  
Exercised     –       –       –       –  
Forfeited     –       –       –       –  
Expired     –       –       –       –  
Outstanding - September 30, 2018     7,250,000       0.37       8.03       32,336,000  
                                 
Total exercisable - September 30, 2018     7,250,000       0.37       8.03       32,336,000  
Total unvested - September 30, 2018     –       –       –       –  
Total vested or expected to vest - September 30, 2018     7,250,000       0.37       8.03       32,336,000  

 

As of September 30, 2018, there were 10,750,000 remaining unvested stock options granted outside of the Amended 2013 Plan which vest upon the completion of future performance conditions.