Quarterly report pursuant to Section 13 or 15(d)

Stock based compensation, options and warrants

v3.10.0.1
Stock based compensation, options and warrants
9 Months Ended
Sep. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock based compensation, options and warrants
Note 9. Stock based compensation, options and warrants:

Stock based compensation:

The Company recognized total expenses for stock-based compensation during the three and nine months ended September 30, 2018 and 2017, which are included in the accompanying condensed interim consolidated statements of operations, as follows:

   
Three Months Ended September 30,
   
Nine Months Ended September 30,
 
   
2018
   
2017
   
2018
   
2017
 
Selling, general and administrative expenses
 
$
1,655,160
   
$
108,568
   
$
4,147,189
   
$
379,622
 
    Total stock-based compensation
 
$
1,655,160
   
$
108,568
   
$
4,147,189
   
$
379,622
 
 
The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2018 and 2017, from the following categories:
 
   
Three Months Ended September 30,
   
Nine Months Ended September 30,
 
   
2018
   
2017
   
2018
   
2017
 
Restricted stock awards under the Plan
 
$
1,434,650
   
$
100,396
   
$
3,634,192
   
$
188,572
 
Stock option awards under the Plan
   
220,510
     
8,172
     
512,997
     
103,430
 
Non-qualified stock option awards
   
-
     
-
     
-
     
87,620
 
    Total stock-based compensation
 
$
1,655,160
   
$
108,568
   
$
4,147,189
   
$
379,622
 
 
Restricted stock units:
   
Number of Shares
   
Weighted Average Grant-Date
Fair Value
 
Unvested at January 1, 2018
   
342,070
   
$
5.97
 
Granted
   
431,000
     
10.46
 
Vested
   
(201,421
)
   
7.48
 
Forfeited
   
(290,147
)
   
6.53
 
Delivered
   
(124,583
)
   
5.42
 
Unvested at September 30, 2018
   
156,919
   
$
13.37
 
A summary of the Company’s restricted stock activity in the nine months ended September 30, 2018 is presented below:
During the nine months ended September 30, 2018, the Company granted 418,500 restricted stock units to employees and non-employee directors, respectively, and 12,500 restricted stock units to a consultant. The total fair value of restricted stock units granted during the nine months ended September 30, 2018 was approximately $4,509,000.  The fair value of each restricted stock unit was based upon the closing stock price on the grant date.
The fair value of restricted stock unit grants are measured based on their fair value on the date of grant and amortized over the vesting period of twenty-four months. As of September 30, 2018, there was approximately $3,483,000 of unrecognized compensation cost related to unvested restricted stock units, which is expected to be recognized over a remaining weighted-average vesting period of approximately six months.

Stock incentive plan options:

The Company currently provides stock-based compensation to employees, directors and consultants under the Plan. The Company granted 62,000 stock options to an employee of the Company for the nine months ended September 30, 2018. There were no stock options granted to employees, directors or consultants for the nine months ended September 30, 2017.
 
A summary of activity under the Plan for the nine months ended September 30, 2018 is presented below:
   
Shares Underlying Options
   
Weighted Average Exercise Price
   
Weighted Average Remaining Contractual
Term (Years)
   
Aggregate Intrinsic Value
 
Outstanding at January 1, 2018
   
119,533
   
$
9.02
             
     Granted
   
62,000
     
15.71
             
     Exercised
   
(19,533
)
   
4.02
             
Outstanding at September 30, 2018
   
162,000
   
$
12.19
     
9.2
   
$
-
 
                                 
Exercisable at September 30, 2018
   
145,335
   
$
11.46
     
9.2
   
$
-
 
The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on September 30, 2018 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders, had all option holders been able to, and in fact had, exercised their options on September 30, 2018.

In January 2018, 19,533 vested options granted under the Plan were exercised for cash proceeds of $78,522.

During the nine months ended September 30, 2018, the 62,000 options granted had a ten-year life and there were no options forfeited that were granted under the Plan. The vested options were exercisable at an average of $39.47 per share, the unvested options were exercisable at an average of $7.90 per share.
 
Other common stock purchase options and warrants:

Following is a summary of outstanding options and warrants that were issued outside of the Plan for the nine months ended September 30, 2018:
   
Shares Underlying Options/Warrants
   
Weighted Average Exercise Price
   
Weighted Average Remaining Contractual
Term (Years)
   
Aggregate Intrinsic Value
 
Outstanding at December 31, 2017
   
1,944,895
   
$
35.06
     
2.7
   
$
6,135,000
 
     Granted
   
-
     
-
                 
     Exercised
   
(113,009
)
 
3.50
                 
     Forfeited
   
(160,773
)
 
10.88
                 
Outstanding at September 30, 2018
   
1,671,113
   
$
39.47
     
2.2
   
$
3,000
 
                                 
Exercisable at September 30, 2018
   
1,671,113
   
$
39.47
     
2.2
   
$
3,000
 
During the nine months ended September 30, 2018, 13,009 of the warrants issued in the May 2013 private offering were surrendered for the issuance of 3,215 shares of common stock, 100,000 warrants issued in March 2018, were exercised for cash proceeds of $350,000 and 160,773 warrants were forfeited.

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on September 30, 2018 and the exercise price, multiplied by the number of in-the-money options and warrants) that would have been received by the option and warrant holders, had all option and warrant holders been able to, and in fact had, exercised their options and warrants on September 30, 2018.