NOTE 12. STOCKHOLDERS’ EQUITY

In February 2017, a former employee forfeited 100,000 shares of unvested restricted stock and paid us $35,000 in connection with the exercise of 150,000 fully-vested stock options.

On August 31, 2017, in accordance with the Lipparelli Agreement, the Board authorized the issuance of 800,000 restricted shares of our common stock, which shares vest as follows: (i) as to the first 200,000 shares, on August 31, 2017, (ii) as to the next 200,000 shares, on January 2, 2018, and (iii) as to the next 400,000 shares, on January 2, 2019.  As of December 31, 2017, nonvested shares associated with the August 31, 2017 stock grant to Mr. Lipparelli were considered not issued until future services are rendered and shares become vested. The fair value of shares vested on August 31, 2017 was estimated to be $164,000, using the grant date trading price of our stock.