Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.19.1
Stock-Based Compensation
3 Months Ended
Mar. 31, 2019
Share-based Payment Arrangement [Abstract]  
Stock-Based Compensation

11. Stock-Based Compensation

 

Equity Incentive Plans – The Company’s 2013 Equity Compensation Plan (the “2013 Plan”) was adopted for the purpose of providing equity incentives to employees, officers, directors and consultants including options, restricted stock, restricted stock units, stock appreciation rights, other equity awards, annual incentive awards and dividend equivalents. The Company amended the 2013 Plan to increase the number of authorized shares of common stock under the Plan from 225,000 shares to 615,000 shares, which the Company’s stockholders approved on June 26, 2017. The Company further amended the 2013 Plan to increase the number of authorized shares of common stock under the Plan by 300,000 shares, which the Company’s stockholders approved and ratified on November 8, 2018. The Company is now authorized to issue 915,000 shares under the amended 2013 Plan.

 

Stock Options

 

The following tables summarize the Company’s stock option activity for the three months ended March 31, 2019, and 2018:

 

   

Number of

Options

   

Weighted

Average

Exercise

Price

   

Weighted

Average

Remaining

Contractual

Life

(in Years)

   

Aggregate

Intrinsic

Value

 
Outstanding – January 1, 2019     499,439     $ 6.94       9.0     $ -  
Granted     30,000       2.23                  
Exercised     -       -                  
Forfeited/Canceled/Expired     (120,313 )     2.88                  
Outstanding – March 31, 2019     409,126     $ 7.78       8.4     $ 80,520  
                                 
Exercisable – March 31, 2019     330,959     $ 9.01       8.2     $ 32,710  

 

   

Number of

Options

   

Weighted

Average

Exercise

Price

   

Weighted

Average

Remaining

Contractual

Life

(in Years)

   

Aggregate

Intrinsic

Value

 
Outstanding – January 1, 2018     246,564     $ 11.17       9.1     $ —    
Granted     —         —                    
Exercised     —         —                    
Forfeited/Canceled/Expired     —         —                    
Outstanding – March 31, 2018     246,564     $ 11.17       8.9     $ —    
                                 
Exercisable – March 31, 2018     166,564     $ 11.39       8.8     $ —    

 

On March 11, 2019, the Company granted 30,000 stock options to CFO Adam He, in connection with his employment agreement. These options had an aggregate fair value of $54,000, using the Black-Scholes option-pricing model with the following assumptions:

 

Risk-free interest rate     2.44 %
Expected dividend yield     0.00 %
Expected volatility     102.71 %
Expected term     5.75 years  

 

The March 11, 2019 options granted are exercisable at an exercise price of $2.23 over a ten-year term and vest over two years, with one-third vested upon grant.

 

The Company recorded non-cash compensation expense, which is included in general and administrative expenses in the accompanying condensed consolidated statement of operations, of approximately $6,000 and $88,000 for the three months ended March 31, 2019 and 2018, respectively, related to stock option grants.

 

Total unrecognized compensation expense related to unvested stock options at March 31, 2019 amounted to approximately $89,000 and is expected to be recognized over a remaining weighted average period of 1.4 years.

 

Warrants

 

As of March 31, 2019, there were 170,314 warrants outstanding and exercisable, with a weighted average exercise price of $32.44 per share. The weighted average remaining contractual life of the warrants at March 31, 2019 and December 31, 2018 was 1.8 and 2.6 years, respectively, and the aggregate intrinsic value was 0.

 

The Company did not grant any warrants to purchase shares of common stock during the three months ended March 31, 2019.

 

No compensation cost was recognized for the three months ended March 31, 2019, and 2018 pertaining to warrants.

 

Restricted Stock and Restricted Stock Units

 

During the first three months of 2019, the Company granted 8,090 restricted stock units (“RSUs”) to a Board member The RSUs vest one year after they were awarded, subject to continued service on the vesting date. The RSUs have no voting or dividend rights. The fair value of the common stock on the date of grant were $3.09 per share, based upon the closing market price on the grant dates. The aggregate grant date fair value of the combined awards amounted to $25,000.

 

A summary of the restricted stock award activity for the three months ended March 31, 2019, and 2018 is as follows:

 

    Number of
Shares
 
       
Unvested Outstanding - January 1, 2019     60,651  
Granted     8,090  
Forfeited     (22,730 )
Vested     -  
Unvested Outstanding - March 31, 2019     46,011  

 

    Number of
Shares
 
       
Unvested Outstanding - January 1, 2018     15,544  
Granted     —    
Forfeited     —    
Vested     —    
Unvested Outstanding - March 31, 2018     15,544  

 

The Company recorded non-cash compensation expenses of approximately $3,000 and $30,000 for the three months ended March 31, 2019 and 2018, respectively, related to restricted stock grants.

 

Total unrecognized compensation expense related to unvested restricted stock and unvested restricted stock units at March 31, 2019 amounts to approximately $56,000 and is expected to be recognized over a weighted average period of 0.4 year.