STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE

6 Months Ended

Jun. 30, 2018

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE

NOTE 14. STOCKHOLDERS' EQUITY AND NET LOSS PER SHARE

Equity Issuances 

During the six months ended June 30, 2017, we issued a total of  382,308 shares of our common stock to private investors in exchange for approximately $1.3 million in cash. We did not make similar issuances of our common stock during the six months ended June 30, 2018.

Stock-Based Compensation 

We are authorized to issue equity-based awards under our 2010 Equity Incentive Plan, our 2014 Incentive Plan, and our 2017 Incentive Plan, each of which our stockholders have approved. We also award cash bonuses (“China Cash Bonuses”) to our employees in China, which grants are not subject to a formal incentive plan and which can only be settled in cash. We grant such awards to attract, retain and motivate eligible officers, directors, employees and consultants. Under each of the plans, we have granted shares of restricted stock and options to purchase common stock to our officers and employees with exercise prices equal to or greater than the fair value of the underlying shares on the grant date.

Stock options and China Cash Bonuses generally expire 10 years from the grant date. All forms of equity awards vest upon the passage of time, the attainment of performance criteria, or both. When participants exercise stock options, we issue any shares of our common stock resulting from such exercise from new authorized and unallocated shares available at the time of exercise.

The following table summarizes activity under our equity incentive plans related to equity-classified stock option grants as of June 30, 2018, and changes during the six months then ended:

	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2018	9,397,056	$	3.80
Granted	1,545,500	7.56
Exercised	(371,135)	2.61
Forfeited, cancelled or expired	(33,076)	4.33
Outstanding at June 30, 2018	10,538,345	$	4.39	8.0	$	4,747
Options exercisable at June 30, 2018	9,731,934	$	4.47	7.9	$	3,776

We granted an option to purchase 1.3 million shares of our common stock at an exercise price of $7.81 per share to Kai-Shing Tao, our Chief Executive Officer and Chairman of the Board, under the 2017 Incentive Plan, which our stockholders approved in January 2018. We recorded the entire $11.6 million of compensation expense associated with this award during the three months ended March 31, 2018 because Mr. Tao fully vested in the award at the time we received stockholder approval.

The following table summarizes activity under our equity incentive plans related to China Cash Bonuses as of June 30, 2018, and changes during the six months then ended:

	Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2018	266,500	$	3.84
Granted	1,352,375	6.03
Exercised	(7,875)	4.28
Forfeited, cancelled or expired	(37,000)	4.91
Outstanding at June 30, 2018	1,574,000	$	5.70	9.6	$	116
Options exercisable at June 30, 2018	157,250	$	3.89	8.4	$	57

During the six months ended June 30, 2018, we did not award restricted stock under our equity incentive plans.

We incurred share-based compensation expense of $0.4 million and $0.3 million, respectively, during the three months ended June 30, 2018 and 2017, and of $12.0 million and $0.6 million, respectively, during the six months ended June 30, 2018 and 2017.

Net Income (Loss) per Share 

For the three and six months ended June 30, 2018 and 2017, there were no reconciling items related to either the numerator or denominator of the loss per share calculation, except that for the second quarter of 2018 the denominator changed as a result of applying the treasury stock method to outstanding in-the-money stock options; however, the change in the denominator did not lead to a dilution of basic earnings per share.

Securities which would have been anti-dilutive to a calculation of diluted earnings per share for the three and six months ended June 30, 2018 and 2017, except for the second quarter of 2018, include:

• the outstanding stock options described above;

• the outstanding CBG Acquisition Warrant, which may be exercised to purchase 40,000 shares of our common stock at a per-share exercise price of $10.00 (we are also committed to the future issuance of additional CBG Acquisition Warrants at the same per-share exercise price as the CBG Acquisition Warrant that has already been issued), and the outstanding CBG Financing Warrants, which may be exercised to purchase 2,961,774 shares of our common stock at an exercise price of $4.96 per share;

• the warrants issued in conjunction with our acquisition of Hotelmobi, Inc., which may be exercised to purchase 1,000,000 shares of our common stock, half at an exercise price of $8.00 per share and half at an exercise price of $12.00 per share.