Quarterly report pursuant to Section 13 or 15(d)

Share Based Payments and Stock Options

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Share Based Payments and Stock Options
9 Months Ended
Sep. 30, 2018
Share Based Payments and Stock Options [Abstract]  
SHARE BASED PAYMENTS AND STOCK OPTIONS
7. SHARE BASED PAYMENTS AND STOCK OPTIONS

 

The Company accounts for share-based payments through the measurement and recognition of compensation expense for share-based payment awards made to employees and directors of the Company, including stock options and restricted shares.

 

The following table presents share-based payment expense and new shares issued for the three months and nine months ended September 30, 2018 and 2017.

 

      Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
      2018     2017     2018     2017  
  Shares based expense from issuance of Common Stock and warrants   $ 236,459     $ 179,280     $ 670,785     $ 525,270  
  Shares based expense from issuance of Common Stock options   $ 130,639       63,704     $ 249,661     $ 120,122  
  Total non-cash compensation   $ 367,098     $ 242,984     $ 920,446     $ 645,392  

  

On March 6, 2014, the Company’s Board of Directors (the “Board”) and majority stockholders approved the 2014 Equity Incentive Plan (the “2014 Plan”) pursuant to which the Company may grant incentive and non-statutory options to employees, nonemployee members of the Board, consultants and other independent advisors who provide services to the Company. The maximum shares of Common Stock which may be issued over the term of the 2014 Plan shall not exceed 2,500,000 shares. Awards under the 2014 Plan are made by the Board. Options under the plan are to be issued at the market price of the stock on the day of the grant except to those issued to a ten-percent stockholder which is required to be issued at a price not less than 110% of the fair market value on the day of the grant. Each option is exercisable at such time or times, during such period and for such numbers of shares shall be determined by the plan administrator. No option may be exercisable for more than ten years (five years in the case of an incentive stock option granted to a ten-percent stockholder) from the date of grant.

 

On January 7, 2018, the Board adopted the 2018 Equity Compensation Plan (the “2018 Plan”) and on April 20, 2018, the shareholders approved the 2018 Plan. The 2018 Plan will be administered by the Board. The Board may grant options to purchase shares of Common Stock, stock appreciation rights, restricted stock units, restricted or unrestricted shares of Common Stock, performance shares, performance units, other cash-based awards and other stock-based awards. The Board also has broad authority to determine the terms and conditions of each option or other kind of equity award, adopt, amend and rescind rules and regulations for the administration of the 2018 Plan and amend or modify outstanding options, grants and awards.

 

The Board may delegate authority to the chief executive officer and/or other executive officers to grant options and other awards to employees (other than themselves), subject to applicable law and the 2018 Plan. No options, stock purchase rights or awards may be made under the 2018 Plan on or after the ten-year anniversary of the adoption of the 2018 Plan by the Board, but the 2018 Plan will continue thereafter while previously granted options, stock appreciation rights or awards remain subject to the 2018 Plan. The maximum shares of Common Stock which may be issued over the term of the plan shall not exceed 2,500,000 shares. Options granted under the 2018 Plan may be either “incentive stock options” that are intended to meet the requirements of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or “nonstatutory stock options” that do not meet the requirements of Section 422 of the Code. The Board will determine the exercise price of options granted under the 2018 Plan. The exercise price of stock options may not be less than the fair market value, on the date of grant, per share of our Common Stock issuable upon exercise of the option (or 110% of fair market value in the case of incentive options granted to a ten-percent stockholder). No option may be exercisable for more than ten years (five years in the case of an incentive stock option granted to a ten-percent stockholder) from the date of grant.

 

Options outstanding at September 30, 2018 are as follows:

 

  Options   Shares     Weight - Average Exercise Price     Weighted - Average Remaining Contractual Term   Weighted - Average Grant Date Fair Value  
  Outstanding at December 31, 2017     2,622,000     $ .99     2.35 years   $ .32  
  Granted     105,000     $ 3.48         $ 1.89  
  Exercised     (1,009,183 )   $ .67         $ .12  
  Forfeited or expired     (183,817 )   $ .71         $ .13  
  Outstanding at September 30, 2018     1,534,000     $ 1.40     2.50 years   $ .57  
  Options vested at September 30, 2018     1,013,998     $ 1.06     1.72 years   $ .30.