14.	Share-based Compensation

On October 26, 2016, the Company’s Board of Directors approved the issuance of up to 25,000 shares of the Company’s common stock in the form of restricted stock or options (“2016 Stock Plan”). Effective January 20, 2017, the 2016 Stock Plan was amended and restated as the SG Blocks, Inc. Stock Incentive Plan, as further amended effective June 1, 2018 (the “Incentive Plan”). The Incentive Plan authorizes the issuance of up to 125,000 shares of common stock. It authorizes the issuance of equity-based awards in the form of stock options, stock appreciation rights, restricted shares, restricted share units, other share-based awards and cash-based awards to non-employee directors and to officers, employees and consultants of the Company and its subsidiary, except that incentive stock options may only be granted to the Company’s employees and its subsidiary’s employees. The Incentive Plan expires on October 26, 2026, and is administered by the Company’s Compensation Committee of the Board of Directors. Each of the Company’s employees, directors, and consultants are eligible to participate in the Incentive Plan. As of March 31, 2020, there were 48,164 shares of common stock available for issuance under the Incentive Plan.

Stock-Based Compensation Expense

Stock-based compensation expense is included in the condensed consolidated statements of operations as follows:

	Three Months Ended March 31,
	2020		2019
Payroll and related expenses	$	38,764	$	162,493
Total	$	38,764	$	162,493

The following table presents total stock-based compensation expense by security type included in the condensed consolidated statements of operations:

	Three Months Ended March 31,
	2020		2019
Stock options	$	2,667	$	32,098
RSUs		36,097		130,395
Total	$	38,764	$	162,493

Stock-Based Option Awards

The Company issued no stock-based options during the three months ended March 31, 2020. The fair value of the stock-based option awards granted during the three months ended March 31, 2019, were estimated at the date of grant using the Black-Scholes option valuation model with the following assumptions:

	2019
Expected dividend yield		—	%
Expected stock volatility		68.4	%
Risk-free interest rate		2.44	%
Expected life		3.00

Because the Company does not have significant historical data on employee exercise behavior, the Company uses the “Simplified Method” to calculate the expected life of the stock-based option awards granted to employees. The simplified method is calculated by averaging the vesting period and contractual term of the options.

The following table summarizes stock-based option activities and changes during the three months ended March 31, 2020 as described below:

	Shares			Weighted Average Fair Value Per Share		Weighted Average Exercise Price Per Share		Weighted Average Remaining Terms (in years)		Aggregate Intrinsic Value
Outstanding – December 31, 2019		53,170		$	24.80	$	81.20		7.40	$	—
Granted		—			—		—
Exercised		—			—		—
Cancelled		(833	)		—		—
Outstanding – March 31, 2020		52,337			24.75		81.60		7.15	$	—
Exercisable – December 31, 2019		52,649			24.80		81.20		7.39		—
Exercisable – March 31, 2020		51,920		$	24.74	$	81.51		7.14	$	—

For the three months ended March 31, 2020 and March 31, 2019, the Company recognized stock-based compensation expense of $2,667 and $32,098, respectively, related to stock options. This expense is included in payroll and related expenses in the accompanying condensed consolidated statements of operations.

As of March 31, 2020, there was $10,668 of total unrecognized compensation costs related to non-vested stock options, which will be expensed over a weighted average period of 1 year. The intrinsic value is calculated as the difference between the fair value of the stock price at year end and the exercise price of each of the outstanding stock options. The fair value of the stock price at March 31, 2020 was $9.30 per share.

Restricted Stock Units

On March 22, 2019, a total of 15,703 of restricted stock units were granted to Mr. Galvin, Mr. Armstrong, Mr. Shetty, six employees and one consultant of the Company, under the Company's stock-based compensation plan, at the fair value of $54.00 per share, which represents the closing price of the Company's common stock on February 26, 2019, as adjusted for stock splits. Restricted stock units granted to Mr. Galvin, Mr. Armstrong, Mr. Shetty, and an aggregate of six employees and one consultant of 6,139, 772, 5,729 and an aggregate of 3,063, respectively, vest in installments over either a one-year, two-year, three-year and four-year period and will fully vest by the end of December 31, 2022. The fair value of these units upon issuance amounted to $847,957.

On January 15, 2019 and February 26, 2019, a total of 526 of restricted stock units were granted to two of the Company’s non-employee directors, under the Incentive Plan, at the calculated fair value of $58.80 and $55.20 per share, respectively, which represents the average closing price of the Company’s common stock for the ten trading days immediately preceding and including the grant date, as adjusted for stock splits. The restricted stock units granted on January 15, 2019 vested on January 15, 2020, subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Company’s Board of Directors or death or disability. The restricted stock units granted on February 26, 2019 vested on the earlier of (A) the first anniversary of the date of the grant or (B) the date of the 2019 annual meeting of the Company’s stockholders subject to each individual’s continued service as a director of the Company through such date, and are payable six months after the termination of the director from the Board of Directors or death or disability.

For the three months ended March 31, 2020 and 2019, the Company recognized stock-based compensation of $36,097 and $130,395 related to restricted stock units. This expense is included in the payroll and related expenses and marketing and business development expense in the accompanying condensed consolidated statement of operations. For the three months ended March 31, 2020 and 2019, the Company recognized $0 and $54,315, respectively, related to restricted stock units in lieu of accrued compensation.

The following table summarized restricted stock unit activities during the three months ended March 31, 2020:

	Number of Shares
Non-vested balance at January 1, 2020		8,938
Granted		—
Vested		—
Forfeited/Expired		—
Non-vested balance at March 31, 2020		8,938