SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2017

NOTE 7.

SHARE-BASED COMPENSATION:

On April 20, 2015, our Board of Directors and the holder of a majority of our outstanding shares of common stock approved the adoption of our 2015 Equity Incentive Award Plan (the “Plan”). The Plan allows for the issuance of up to 2,000,000 shares of our common stock for award grants. The Plan provides equity-based compensation through the grant of cash-based awards, nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other stock-based awards. We believe that an adequate reserve of shares available for issuance under the Plan is necessary to enable us to attract, motivate and retain key employees and directors and to provide an additional incentive for such individuals through stock ownership and other rights that promote and recognize the financial success and growth of our Company. We granted options to purchase 285,000 shares of our common stock, 98,669 restricted stock units (“RSUs”), 28,600 shares of stock and 170,000 shares as bonus pursuant to the Plan with respect to the twelve months ended December 31, 2017.

During 2017, Lone Star Value Investors, LP exercised on a cashless exercise of warrant which resulted in the issuance of 1,205,837 shares of our common stock and we recorded a corresponding charge to stock based compensation expense of $2.2 million, and 174,680 restricted stock units were cancelled and an accelerated cost of $0.8 million due to such cancellation was accounted for as stock based compensation expense. The Company also accelerated the vesting of 333,333 RSUs during 2017, which resulted in a charge of $1.1 million.

Total share-based compensation expense for the years ended December 31, 2017 and December 31, 2016 was $7.1 million and $1.5 million, respectively.