Stock–Based Compensation

12 Months Ended

Dec. 31, 2017

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

Stock-Based Compensation

Note 11. Stock–Based Compensation

Issuance of restricted common stock – directors, officers and employees

During the year ended December 31, 2017, the Company issued an aggregate of 4,150,000 shares of restricted common stock to certain employees and directors. 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 common stock was as follows for the year ended December 31, 2017:

	Number of shares			Weighted average grant date fair value
Non–vested at January 1, 2017		1,000,000		$	2.31
Granted		4,150,000		$	1.24
Vested		(1,300,000	)	$	1.54
Forfeited		–
Non–vested at December 31, 2017		3,850,000		$	1.42

For the years ended December 31, 2017 and 2016, in connection with the vesting of restricted common stock awards, the Company has recorded $3,280 and $9,682 in employee and director stock–based compensation expense, which is a component of selling, general and administrative expense in the consolidated statement of operations and comprehensive loss.

As of December 31, 2017, unamortized stock-based compensation costs related to restricted share arrangements was $3,503, and will be recognized over a weighted average period of 1.5 years.

Stock options

The following is a summary of the Company’s stock option activity for year ended December 31, 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 – December 31, 2017		6,000,000	$	0.71	$	1.29		4.62	$	24,310
Exercisable – December 31, 2017		6,000,000	$	0.71	$	1.29		4.62	$	24,310

On August 14, 2017, in connection with the new employment agreement with Mr. McAfee, the Company modified his stock options to (a) extend the term of the stock options to August 14, 2022 and (b) to make the stock options immediately exercisable. In connection with this modification, the Company recognized the incremental value of the modified stock options of $37 as stock-based compensation, which is included below.

For the years ended December, 2017 and 2016, the Company has recorded $7,094 and $641, respectively, in stock option related stock-based compensation expense, which is a component of selling, general and administrative expense in the consolidated statement of operations.

As of December 31, 2017, there were no unrecognized compensation costs related to non–vested stock options.