STOCKHOLDER'S EQUITY

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

STOCKHOLDER'S EQUITY

NOTE 8 – STOCKHOLDER’S EQUITY

Common Stock

During the six months ended June 30, 2018, the Company granted 720,000 shares of restricted stock to the non-employee Directors in connection with their compensation to serve as Board Members. The shares were valued at the fair value at the date of grant and vest quarterly. Additionally, during the six months ended June 30, 2018, the Company granted 2,750,000 shares of restricted stock to employees of which 2,000,000 will be vested upon achieving certain performance criteria and 750,000 will vest over a three-year period. The Company also issued 170,240 shares of common stock to a service provider in satisfaction of $32,213 due for services.

During the six months ended June 30, 2018, investors exercised 4,433,333 warrants at an average price of $0.05 cents per share on a cashless exercise basis in exchange for shares of common stock of the Company.

During the six months ended June 30, 2018, the Company cancelled 728,448 shares of common stock in settlement of amounts due from the Multipay acquisition. 

Warrants

The following is a summary of the Company’s warrant activity for the six months ended June 30, 2018:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Life
Outstanding at December 31,2017		48,164,543		$	0.08		2.9 Years
Exercised		(4,433,333	)	$	0.05		—
Outstanding at June 30, 2018		43,731,210		$	0.08		2.4 Years

Stock Options

During the six months ended June 30, 2018, the Company granted options to acquire 5,250,000 shares of common stock to five employees and one non-employee of which 3,250,000 options are exercisable at an average price of $0.22 per share and 2,000,000 are exercisable at $0.25 per share. The options have a term of ten years, were granted at fair market value at the date of grant .and vest over three years. The grant date fair value of the options totaled approximately $792,000, which will be charged to expense over the three-year vesting term of which approximately $231,000 was related to non-employees.

The Company determined the grant date fair value of the options granted during the three months ended June 30, 2018 using the Black Scholes Method and the following assumptions:

Expected Volatility – 77-78% 

Expected Term – 6.5 Years 

Risk Free Rate – 2.4-2.7% 

Dividend Rate – 0.00%

Activity related to stock options for the three months ended June 30, 2018 is summarized as follows:

			Weighted		Weighted
			Average		Average		Aggregate
	Number of Shares		Exercise Price		Contractual Term (Yrs.)		Intrinsic Value
Outstanding as of December 31, 2017		103,208,331	$	0.19		8.3	$	11,457,291
Granted		5,250,000	$	0.24		10.0	$	—
Forfeitures		—		—		—		—
Exercised		(2,508.331)		0.15		—		296,176
Outstanding as of June 30, 2018		105,950,000		0.20		7.96	$	10,638,500
Exercisable as of June 30, 2018		85,652,778	$	0.21		7.86	$	9,432,500

The following table summarizes stock option information as of June 30, 2018:

			Weighted Average
			Contractual
Exercise Prices	Outstanding		Life (Yrs.)		Exercisable
$0.00		3,500,000		7.25		3,500,000
$0.05		33,450,000		8.11		26,125,000
$0.10		27,200,000		8.55		21,694,444
$0.13		250,000		9.50		—
$0.15		2,800,000		7.35		250,000
$0.22		2,750,000		9.55		—
$0.25		2,500,000		9.25		2,083,334
$0.26		500,000		9.80		—
$0.29		1,000,000		9.00		—
$0.40		l,000,000		7.67		l,000,000
$0.45		31,000,000		7.30		31,000,000
Total		105,950,000		7.96		85,652,778

During the six months ended June 30, 2018, the Company recognized approximately $1,293,000 of stock-based compensation expense related to options of which non-employees expense was approximately $279,000. As of June 30, 2018, there was approximately $2,460,000 of unrecognized compensation costs related to stock options outstanding of which approximately $569,000 was related to non-employees and will be expensed through 2021.

Restricted Stock

During the six months ended June 30, 2018, the Company granted 2,750,000 shares of restricted stock to employees of which 2,000,000 shares will be vested by upon achieving certain performance criteria and 750,000 common shares will vest over a three-year period. The restricted stock that is not subject to performance criteria will be expensed over the three-year vesting period was valued at the fair market value at the date of grant. Additionally, in the six months ended June 30, 2018, the Company granted 720,000 shares of restricted stock to non-employee Directors in connection with their compensation to serve as Board Members. The shares were valued at the fair market value at the date of grant and vest quarterly.