Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

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

Stock-Based Compensation

Note 8. Stock–Based Compensation

Issuance of restricted common stock – directors, officers and employees

On January 15, 2018, the Company granted 10,000 shares of restricted common stock to an employee of the Company. The Company valued the award on its grant date and is expensing the grant date fair value over the 12 month vesting period.

On March 1, 2018, the Company granted 750,000 shares of restricted common stock to Mr. Robert Lowrey in connection with his employment agreement to serve as the Company’s Chief Financial Officer. The Company valued the award on its grant date and is expensing the grant date fair value over the 24 month vesting period.

On April 6, 2018, the Company granted 900,000 shares of restricted common stock to certain of its officers and directors in connection with the commencement of operations in Sweden. The Company valued the awards on their grant date and is expensing the grant date fair value over the 12 month vesting period.

On April 6, 2018, the Company granted 600,000 shares of restricted common stock to Mr. Robert Ladd in connection with his employment agreement to serve as the Company’s Chief Executive Officer. The Company valued the award on its grant date and is expensing the grant date fair value over the 24 month vesting period.

On July 10, 2018, the Company granted 100,000 shares of restricted common stock to Mr. Stephen Schaeffer in connection with incentive compensation from his original employment agreement as President of Cryptocurrency Operations. A deployment benchmark was met, making Mr. Schaeffer eligible for the shares issuance. The Company valued the award on its grant date and is expensing the grant date fair value immediately as there is no vesting period.

On August 1, 2018, the Company granted 250,000 shares of restricted common stock to Mr. Robert Lowrey in connection with his employment as Chief Financial Officer. The Company valued the award on its grant date and is expensing the grant date fair value over the 17 month vesting period.

On September 17, 2018, the Company granted 100,000 shares of restricted common stock to a former employee in connection with the termination of their position and separation agreement. The Company valued the award on its grant date and is expensing the grant date fair value immediately as there is no vesting period.

On September 30, 2018, the Company granted 50,000 shares of restricted common stock to an employee of the Company. The Company valued the award on its grant date and is expensing the grant date fair value over the 18 month vesting period.

The Company’s activity in restricted common stock was as follows for the nine months ended September 30, 2018:

	Number of shares			Weighted average grant date fair value
Non–vested at January 1, 2018		3,850,000		$	1.42
Granted		2,760,000		$	1.33
Vested		(2,655,000	)	$	1.40
Forfeited		(550,000	)	$	1.06
Non–vested at September 30, 2018		3,405,000		$	1.44

For the three months ended September 30, 2018 and 2017, the Company has recorded $1,114 and $1,248, respectively, in employee and director stock-based compensation, which is a component of general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

For the nine months ended September 30, 2018 and 2017, the Company has recorded $3,448 and $2,253, in employee and director stock–based compensation expense, which is a component of general and administrative expenses in the unaudited condensed consolidated statement of operations and comprehensive loss.

As of September 30, 2018, unamortized stock-based compensation costs related to restricted share arrangements was $3,374, and will be recognized over a weighted average period of 0.96 years.

Stock options

The following is a summary of the Company’s stock option activity for the nine months ended September 30, 2018:

	Options		Weighted average exercise price		Weighted average Grant date fair value		Weighted average remaining life		Intrinsic value
Outstanding – January 1, 2018		6,000,000	$	0.71	$	1.29
Granted		–
Exercised		–
Forfeited/Cancelled		–
Outstanding – September 30, 2018		6,000,000	$	0.71	$	1.29		1.34	$	–
Exercisable – September 30, 2018		6,000,000	$	0.71	$	1.29		1.34	$	–

For the three months ended September 30, 2018 and 2017, the Company has recorded $0 and $5,169, respectively, in stock option related stock-based compensation expense, which is a component of general and administrative expenses in the unaudited condensed consolidated statement of operations and comprehensive loss.

For the nine months ended September 30, 2018 and 2017, the Company has recorded $0 and $7,094, respectively, in stock option related stock-based compensation expense, which is a component of general and administrative expenses in the unaudited condensed consolidated statement of operations and comprehensive loss.

As of September 30, 2018, there were no unrecognized compensation costs, as all outstanding stock options are fully vested.