Share-based compensation

12 Months Ended

Dec. 31, 2018

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

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

20. Share-based compensation

Under the Company’s 2008 Omnibus Incentive Plan (the "2008 Plan") a total of two million shares were reserved for issuance. In October 2017, the Company ceased granting awards under the 2008 Plan. No further grants will be made under the 2008 Plan. Under the terms of the 2008 Plan, options were granted with a contractual term of ten years and generally vest over three to five years with an exercise price equal to the fair market value on the date of grant. Incentive stock options (ISOs) granted must have an exercise price equal to or greater than the fair market value of the Company’s common stock on the date of grant. Repricing of stock options and stock appreciation rights (SARs) is permitted without stockholder approval. If a particular award agreement so provides, certain change in control transactions may cause such awards granted under the 2008 Plan to vest at an accelerated rate, unless the awards are continued or substituted for in connection with the transaction.

A total of 2,250,000 shares were reserved for issuance under the 2017 Omnibus Incentive Plan (the “2017 Plan”), which was adopted on October 3, 2017. As of December 31, 2018, 2,250,000 shares were available for future grant under the 2017 Plan. The 2017 Plan authorizes the issuance of awards including stock options, restricted stock units (RSUs), restricted stock, unrestricted stock, SARs and other equity and/or cash performance incentive awards to employees, directors, and consultants of the Company. Subject to certain restrictions, the Compensation Committee of the Board of Directors has broad discretion to establish the terms and conditions for awards under the 2017 Plan, including the number of shares, vesting conditions and the required service or performance criteria. Under the terms of the 2017 Plan, in general, options and SAR’s will vest over a three to five-year period with an exercise price not less than the fair market value on the date of grant. However, options may vest based on time or achievement of performance conditions. Options may contain early exercise provisions, to which the Company will have the right to repurchase any unvested shares in the event that the awardee is terminated. ISOs granted must have an exercise price equal to or greater than the fair market value of the Company’s common stock on the date of grant. The maximum term of options granted under the 2017 Plan is ten years, except that the maximum permitted term of incentive stock options granted to 10% stockholders is five years.

A summary of the option activity as of December 31, 2018 and 2017 and changes during the fiscal years then ended is presented below:

Options Granted to Employees

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2017		555,392			2.70		7.39
Granted		665,000			4.59		-
Exercised		(294,667	)		3.26		-
Forfeited		(3,619	)		2.63		-
Canceled		(7,064	)		2.63		-
Outstanding, December 31, 2017		915,042			4.07		8.34
Exercisable, December 31, 2017		130,042			2.80		5.74

	Number of Shares			Weighted Average Exercise Price		Remaining Contractual Term in Years
				$
Outstanding, January 1, 2018		915,042			4.07		8.34
Granted		40,500			4.10		-
Forfeited		(106,312	)		4.44		-
Canceled		(25,382	)		4.63		-
Outstanding, December 31, 2018		823,848			4.01		7.50
Exercisable, December 31, 2018		392,350			3.73		7.31

Intrinsic value is calculated as the amount by which the current market value of a share of common stock exceeds the exercise price multiplied by the number of option. The aggregate intrinsic value of options exercisable, and vested and expected to vest as of December 31, 2018, was approximately $38,000 and $62,000, respectively. The aggregate intrinsic value of options exercisable, and vested and expected to vest as of December 31, 2017 was approximately $133,000 and $298,000, respectively.

During the year ended December 31, 2018, the Company granted options to purchase 40,500 shares to one employee at a grant date fair value of $4.10 per share. No employee exercised their options. Four employees resigned and their options to purchase an aggregate number of 106,312 shares of the Company’s common stock were forfeited. These employees had resigned with 37,570 options vested, which if not exercised within 90 days after termination, will be cancelled. Of these vested options, none were exercised and 25,382 options were cancelled during the year ended December 31, 2018, and 12,188 options were outstanding and exercisable as of December 31, 2018.

During the years ended December 31, 2017, the Company granted options to purchase 665,000 shares to twenty-three employees at a weighted average grant date fair value of $3.10 per share. Thirty-six employees exercised their options to purchase 294,667 shares of the Company’s common stock. Three employees resigned and their options to purchase a total of 3,619 shares of the Company’s common stock were forfeited. These employees had resigned with 17,100 shares vested. Of these vested shares 10,036 options were exercised and 7,064 options were cancelled during the year ended December 31, 2017, and none were outstanding and exercisable as of December 31, 2017.

Total Share-based Compensation Expense

The estimated fair value of share-based compensation for employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option pricing model under the following assumptions:

	For the years ended December 31,
	2018			2017
Dividend yield		-			-
Risk-free interest rate		2.49	%		2%-2.06%
Expected term (in years)		6.05			6-6.05
Volatility		75.15	%		76.16%-76.74%

As of December 31, 2018, total unrecognized compensation cost related to unvested share-based compensation awards was $1,327,199. This amount is expected to be recognized as stock-based compensation expense in the Company’s consolidated statements of operations and comprehensive income over the remaining weighted average vesting period of 1.72 years.

In connection with the grant of stock options and RSAs to employees, the Company recorded stock-based compensation charges of $941,031 and $326,171 for the years ended December 31, 2018 and 2017, respectively. No options were granted to non-employees during the years ended December 31, 2018 and 2017.