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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2019
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION |
| 15. | STOCK-BASED COMPENSATION
The Company adopted an Incentive Stock Plan on January 18, 2007. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. While the plan terminates 10 years after the adoption date, issued options have their own schedule of termination. During 2013, the majority of the shareholders approved to increase the total available shares in the plan from 2.5 million to 3.5 million shares of common stock. During May 2014, the majority of the shareholders approved to increase the total available shares in the plan from 3.5 million to 4.25 million shares of common stock, during February 2015, the majority of the shareholders approved to increase the total available shares in the plan from 4.25 million to 4.6 million shares of common stock and during April 2015, the majority of the shareholders approved to increase the total available shares in the plan from 4.6 million to 5.1 million shares of common stock. Upon exercise, shares of new common stock are issued by the Company. The Company adopted the 2015 Stock Incentive Plan on April 30, 2015. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. The 2015 Plan permits the grant of options and shares for up to 5,000,000 shares. In addition, there is a provision for an annual increase of 15% to the shares included under the plan, with the shares to be added on the first day of each calendar year, beginning on January 1, 2017. As of September 30, 2019, 1,898,195 shares are available. Under the 2015 Stock Option Plan the Company has issued options to purchase approximately 5.33 million shares at an average price of $3.66 per share with a fair value of $2.76 million. For the nine months ended September 30, 2019 and 2018, the Company issued options to purchase 1.68 million and 1.71 million shares. For the nine months ended September 30, 2019 and 2018, the Company recognized an expense of approximately $3,354,295 and $3,103,778 respectively, of non-cash compensation expense (included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a Black Scholes option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of September 30, 2019, the Company had approximately $7,217,396 of unrecognized pre-tax non-cash compensation expense, which the Company expects to recognize, based on a weighted-average period of 3 years. The Company used straight-line amortization of compensation expense over the two to three-year requisite service or vesting period of the grant. There are options to purchase approximately 2.30 million shares that are vested as of September 30, 2019. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the Black - Scholes option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:
|  | Nine months ended September 30, |
|  | 2019 |  |  | 2018 |
Expected volatility |  |  | 58.62%-121.32% |  |  |  | 91.19-113.03% |
Expected term |  |  | 4.02-5.00 Years |  |  |  | 4.7 – 5.06 Years |
Risk-free interest rate |  |  | 1.79% - 2.72% |  |  |  | 2.56% - 2.86% |
Forfeiture Rate |  |  | 0.00% |  |  |  | 0.00% |
The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. A summary of the status of the Company’s outstanding stock options as of September 30, 2019 and changes during the period ending on that date is as follows:
|  |  |  |  | Weighted Average |  |  | Aggregate Intrinsic |  |  | Average
|  | Shares |  |  | Exercise |  |  | Value |  |  | Remaining
|  | (000’s) |  |  | Price |  |  | (000’s) |  |  | Term (Yrs)
Options |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2018 |  |  | 4,840 |  |  | $ | 3.04 |  |  | $ | 5,338 |  |  | 5.05
Granted |  |  | 1,675 |  |  | $ | 3.87 |  |  |  |  |  |  |
Exercised |  |  | (900 | ) |  | $ | 0.97 |  |  |  |  |  |  |
Forfeiture and cancelled |  |  | (286 | ) |  | $ | 2.59 |  |  |  |  |  |  |
Balance at September 30, 2019 |  |  | 5,329 |  |  | $ | 3.66 |  |  | $ | 2,758 |  |  | 6.10
Exercisable at September 30, 2019 |  |  | 2,305 |  |  | $ | 2.76 |  |  |  |  |  |  |
The following table summarizes information about employee stock options outstanding at September 30, 2019:
|  | Outstanding Options |  |  | Vested Options |
|  | Number |  |  |  |  |  |  |  |  | Number |  |  |  |  |  |  |
|  | Outstanding |  |  |  |  |  |  |  |  | Exercisable |  |  |  |  |  |  |
|  | at |  |  | Weighted |  |  | Weighted |  |  | at |  |  | Weighted |  |  | Weighted |
|  | September 30, |  |  | Average |  |  | Average |  |  | September 30, |  |  | Average |  |  | Average |
Range of |  | 2019 |  |  | Remaining |  |  | Exercise |  |  | 2019 |  |  | Exercise |  |  | Remaining |
Exercise Price |  | (000’s) |  |  | Term |  |  | Price |  |  | (000’s) |  |  | Price |  |  | Term |
$0.20 - $0.53 |  |  | 359 |  |  |  | 3.45 |  |  | $ | 0.27 |  |  |  | 359 |  |  | $ | 0.27 |  |  |  | 3.45 |
$0.65 - $1.80 |  |  | 342 |  |  |  | 1.60 |  |  | $ | 1.05 |  |  |  | 342 |  |  | $ | 1.05 |  |  |  | 1.60 |
$1.83 - $2.84 |  |  | 554 |  |  |  | 0.85 |  |  | $ | 2.06 |  |  |  | 555 |  |  | $ | 2.07 |  |  |  | 2.85 |
$3.20 - $6.20 |  |  | 4,074 |  |  |  | 7.16 |  |  | $ | 4.39 |  |  |  | 1,049 |  |  |  | 4.52 |  |  |  | 5.23 |
$7.20 - $22.00 |  |  | 0 |  |  |  | 0 |  |  | $ | 0 |  |  |  | 0 |  |  | $ | 0 |  |  |  | 0 |
Outstanding options |  |  | 5,329 |  |  |  | 6.10 |  |  | $ | 3.66 |  |  |  | 2,305 |  |  | $ | 2.76 |  |  |  | 3.84 |
Restricted Stock Awards Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse. The holder of a restricted stock award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a shareholder of the Company, including the right to vote the shares. The value of stock awards that vest over time was established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the nine months ended September 30, 2019 and 2018 is presented in the following table:
|  | For the Nine Months ended |
|  | September 30, 2019 |  |  | September 30, 2018 |
|  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  |  |  |  | Average |
|  | (000’s) |  |  | Grant Date |  |  | (000’s) |  |  | Grant Date |
|  | Shares |  |  | Fair Value |  |  | Shares |  |  | Fair Value |
Unvested at beginning of period |  |  | 38,889 |  |  | $ | 3.64 |  |  |  | 72,222 |  |  | $ | — |
Granted |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Vested |  |  | 8,333 |  |  |  | 3.64 |  |  |  | (25,000 | ) |  |  | — |
Unvested at end of period |  |  | 30,556 |  |  | $ | 3.64 |  |  |  | 47,222 |  |  | $ | 3.64 |
Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of September 30, 2019 was $50,709 and is expected to be recognized over a weighted average period of 0.42 years.

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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