STOCK OPTIONS AND WARRANTS
|12 Months Ended|
Dec. 31, 2018
|Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]|
|STOCK OPTIONS AND WARRANTS||
NOTE 14. STOCK OPTIONS AND WARRANTS
On May 10, 2018, the Board ratified and confirmed the 2014 Plan. The 2014 Plan is a broad-based plan under which 5,550,750 shares of our common stock are authorized for issuance for awards, including stock options, stock appreciation rights, restricted stock, and cash incentive awards to members of our Board, executive officers, employees and independent contractors. As of December 31, 2018, 698,501 shares remained available for issuance as new awards under the 2014 Plan.
Stock options. For the years ended December 31, 2018 and 2017, we issued options to purchase 745,000 and 1,465,000 shares of our common stock, respectively, to members of our Board, employees and independent contractors. The stock options generally have a contractual term of five years. The stock options issued to employees generally require continuous employment through vesting dates, while those issued to members of our Board generally vest immediately on the grant date.
On May 1, 2017, in connection with an employment agreement entered into between us and Mr. Hagerty (“the “Hagerty Employment Agreement”), Mr. Hagerty was granted options to purchase 400,000 shares of our Common Stock at an exercise price per share of $0.60. 25% of the options vested immediately on May 1, 2017 and the remainder vests equally on the next three anniversaries from the grant date.
On July 26, 2017, in connection with the Cravens Employment Agreement, Mr. Cravens was granted options to purchase up to 450,000 shares of our common stock at an exercise price per share of $0.76. 25% of the options vested immediately on May 1, 2017 and the remainder vests equally on the next three anniversaries from August 1, 2017. Provided that Mr. Cravens is a full-time employee on August 1, 2020, we agreed to grant to Mr. Cravens an option to purchase an additional 150,000 shares of our common stock (the “2020 Option”) with a strike price equal to the price per share of our common stock as reported on OTC Markets on August 1, 2020 (or the nearest trading date thereafter), which option will vest on August 1, 2020 (or the nearest trading date thereafter). On February 21, 2019, the exercise price of the 2020 Option was set at $1.90 per share in accordance with Amendment #1 to the Cravens Employment Agreement (Note 15).
On October 12, 2018, Mr. Cravens and Mr. Hagerty were granted options to purchase up to 250,000 and 180,000 shares of our common stocks at an exercise price of $1.1875. These options vest equally over the next three anniversaries from the grant date.
The fair value of stock options granted in 2018 and 2017 was $517,922 and $710,368, respectively, using the Black-Scholes option pricing model with the following assumptions:
A summary of stock option activity is as follows:
A summary of unvested stock option activity is as follows:
As of December 31, 2018, our unrecognized share-based compensation expense associated with the stock options issued was $560,821, which will be amortized over a weighted-average of 2.31 years.
The cost of all stock options and stock grants issued have been classified as share-based compensation on the statement of operations for the years ended December 31, 2018 and 2017. Total share-based compensation was $776,354 and $813,480 for the years ended December 31, 2018 and 2017, respectively.
Warrants. On August 29, 2016, in connection with the Term Loan agreement, we issued the Warrants to purchase 1,965,780 shares of common stock at an initial exercise price of $0.30 per share to the Term Loan lenders. On April 24, 2018, we paid $1,333,333 to redeem the Warrants in full upon extinguishment of the Breakaway Term Loan (Note 10).
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef