Stock-Based Compensation

6 Months Ended

Jun. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Note 11. Stock–based compensation

Issuance of restricted shares – directors, officers and employees

During the six months ended June 30, 2017, the Company issued 1,600,000 shares of restricted common stock to certain employees. The Company valued each award on its grant date and is expensing the grant date fair value over the 16-24 month vesting period.

The Company’s activity in restricted shares was as follows for the six months ended June 30, 2017:

	Number of shares			Weighted average grant date fair value
Non–vested at December 31, 2016		1,000,000		$	2.31
Granted		2,150,000			0.93
Vested		(650,000	)		1.79
Forfeited		–			–
Non–vested at June 30, 2017		2,500,000		$	1.26

For the three and six months ended June 30, 2017 the Company has recorded $666 and $1,005, in employee and director stock–based compensation expense, which is a component of selling, general and administrative expense in the condensed consolidated statement of operations and comprehensive loss.

During the three and six months ended June 30, 2017, the Company did not allocate any stock–based compensation expense to non–controlling interest.

As of June 30, 2017, unamortized stock-based compensation costs related to restricted share arrangements was $2,613, and will be recognized over a weighted average period of 1.45 years.

Stock options

The following is a summary of the Company’s stock option activity for the six months ended June 30, 2017:

	Options		Weighted Average Exercise Price		Weighted Average Grant Date Fair Value		Weighted Average Remaining Life		Intrinsic Value
Outstanding – January 1, 2017		6,000,000	$	0.71	$	1.28
Granted		–
Exercised		–
Forfeited/Cancelled		–
Outstanding – June 30, 2017		6,000,000	$	0.71	$	1.28		4.42	$	3,970
Exercisable – June 30, 2017		2,000,000	$	0.71	$	1.28		4.42	$	1,323

For the three months ended June 30, 2017 and 2016, the Company has recorded $962 and $0, respectively, in employee and director stock–based compensation expense, which is a component of selling, general and administrative expense in the condensed consolidated statement of operations.

For the six months ended June 30, 2017 and 2016, the Company has recorded $1,925 and $0, respectively, in employee and director stock–based compensation expense, which is a component of selling, general and administrative expense in the condensed consolidated statement of operations.

As of June 30, 2017, unrecognized compensation costs related to non–vested stock options was $5,133 and will be recognized over a weighted average period of 1.42 years.

Warrants

During February and March, 2017, the Company issued warrants to purchase 4,875,000 shares of the Company’s common stock in connection with private placements. One third of the warrants have an exercise price of $0.50 per share, one third of the warrants have an exercise price of $0.75 per share and one third of the warrants have an exercise price of $1.00 per share. All of the warrants expire three years from the date of issuance.

On March 10, 2017, the Company issued a warrant to purchase 400,000 shares of the Company’s common stock to L2 Capital in connection with the March 2017 Equity Purchase Agreement. These warrants have an exercise price of $0.957 per share and expire on March 10, 2024.

On May 1, 2017, the Company issued warrants to purchase 360,000 shares of the Company’s common stock to the holders of the May 2017 Notes. These warrants have an exercise price of $0.50 per share and expire on May 31, 2022.

On May 18, 2017, the Company issued warrants to purchase 1,231,819 shares of the Company’s common stock to Iliad, in connection with the issuance of the Iliad Note. These warrants have an exercise price of $1.05 per share and expire on May 31, 2022.

On May 1, 2017, the Company issued warrants to purchase 3,750,000 shares of the Company’s common stock in connection with a private placement. One third of the warrants have an exercise price of $0.05 per share, one third of the warrants have an exercise price of $0.75 per share and one third of the warrants have an exercise price of $1.00 per share. All of the warrants expire three years from the date of issuance.

In June 2017, the Company issued warrants to purchase 1,000,000 shares of the Company’s common stock in connection with a private placement. The warrants have an exercise price of $1.25 per share. All of the warrants expire three years from the date of issuance.

The following table summarizes information about shares issuable under warrants outstanding at June 30, 2017:

	Warrant shares outstanding		Weighted average exercise price		Intrinsic Value
Outstanding at January 1, 2017		100,000	$	3.75
Issued		11,616,819		0.83
Exercised		–
Expired		–
Outstanding at June 30, 2017		11,716,819	$	0.85	$	6,331
Exercisable at June 30, 2017		11,716,819	$	0.85	$	6,331