Quarterly report pursuant to Section 13 or 15(d)

STOCK OPTIONS

v3.19.3
STOCK OPTIONS
 9 Months Ended
Sep. 30, 2019
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
STOCK OPTIONS

NOTE 14. STOCK OPTIONS

 

On May 10, 2018, the Board ratified and confirmed the 2014 Equity Incentive Plan (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 September 30, 2019, 177,634 shares remained available for issuance as new awards under the 2014 Plan.

 

Stock options. During the nine months ended September 30, 2019 and 2018, we issued 320,000 and 270,000 options to purchase our common stock, respectively, to members of our Board, executive officers, employees and independent contractors. The fair value of all stock options granted for the nine months ended September 30, 2019 and 2018 was determined to be $564,450 and $169,807, respectively, using the Black-Scholes option pricing model with the following assumptions:

 

 

 

Options Issued 2019

 

 

Options Issued 2018

 

Dividend yield

 

 

0

%

 

 

0

%

Expected volatility

 

71.61% - 72.11

%

 

78

%

Risk free interest rate

 

1.37% - 2.51

%

 

2.46% - 2.73

%

Expected life (years)

 

 

5.00

 

 

 

5.00

 

 

On February 21, 2019, we amended the employment agreement between the Company and Todd Cravens, our President and Chief Executive Officer. Among other things, this amendment grants Mr. Cravens an option to purchase 150,000 shares of our common stock (the “2020 Option”).  The 2020 Option, which vests on August 1, 2020 so long as Mr. Cravens remains a full-time employee of the Company on August 1, 2020, has an exercise 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). If Mr. Cravens is terminated as a result of a change of control of the Company prior to August 1, 2020, the 2020 Option vests in full upon his termination at an exercise price of $1.90 per share (our common stock closing price on February 21, 2019).

 

A summary of stock option activity is as follows:

 

 

 

Common Stock Options

 

 

Weighted-

Average

Exercise Price

 

 

Aggregate

Intrinsic

Value

 

 

Weighted-

Average

Remaining

Contractual

Term (Years)

 

Outstanding – December 31, 2018

 

 

3,496,250

 

 

$

0.66

 

 

$

2,608,329

 

 

 

3.04

 

Issued

 

 

320,000

 

 

 

1.76

 

 

 

—

 

 

 

—

 

Exercised

 

 

(712,916

)

 

 

0.37

 

 

 

—

 

 

 

—

 

Forfeited or expired

 

 

(103,334

)

 

 

0.94

 

 

 

—

 

 

 

—

 

Outstanding – September 30, 2019

 

 

3,000,000

 

 

$

0.84

 

 

$

2,992,800

 

 

 

2.88

 

Exercisable – September 30, 2019

 

 

1,988,333

 

 

$

0.62

 

 

$

2,426,025

 

 

 

3.65

 

 

A summary of unvested stock option activity is as follows:

 

 

 

Common Stock Options

 

 

Weighted-

Average

Exercise Price

 

 

Aggregate

Intrinsic

Value

 

 

Weighted-

Average

Remaining

Contractual

Term (Years)

 

Unvested – December 31, 2018

 

 

1,161,666

 

 

$

0.95

 

 

$

535,475

 

 

 

4.15

 

Granted

 

 

320,000

 

 

 

1.76

 

 

 

—

 

 

 

—

 

Vested

 

 

(373,333

)

 

 

0.76

 

 

 

—

 

 

 

—

 

Forfeited or expired

 

 

(96,666

)

 

 

0.93

 

 

 

—

 

 

 

—

 

Unvested – September 30, 2019

 

 

1,011,667

 

 

$

1.17

 

 

$

680,526

 

 

 

4.39

 

 

As of September 30, 2019, our unrecognized share-based compensation expense associated with the stock options issued was $506,330, which will be amortized over a weighted-average of 2.04 years.