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STOCK-BASED COMPENSATION PLANS | 12 Months Ended
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Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
STOCK-BASED COMPENSATION PLANS | (5) STOCK-BASED COMPENSATION PLANS In June 2017, our stockholders approved the 2017 Stock Incentive Plan (the “2017 Stock Plan”) with a maximum of 5,000,000 shares reserved for issuance. Awards permitted under the 2017 Stock Plan include: Stock Options and Restricted Stock. Awards issued under the 2017 Stock Plan are at the discretion of the Board of Directors. As applicable, awards are granted with an exercise price equal to the closing price of our common stock on the date of grant and generally vest over four years. During the years ended December 31, 2018 and 2017, 0.2 million and 0.5 million option awards were granted under the 2017 Stock Plan, respectively. At December 31, 2018, 0.7 million awards remain issued and outstanding. During the years ended December 31, 2018 and 2017, the Company awarded 80,000 and 15,000 shares, respectively, of restricted stock to the Board of Directors and management under the 2017 Stock plan. The fair market value of restricted shares for share based compensation expensing is equal to the closing price of our common stock on the date of grant. The vesting on Restricted Stock Awards are typically released quarterly over three years for Board of Directors and annually over four years of management. During the year ended December 31, 2018, 18,753 shares of restricted stock vested. No shares of restricted stock vested during the year ended December 31, 2017. Restricted stock awards are issued to the recipient upon vesting and are not included in outstanding shares until such vesting and issuance occurs. The Company previously reserved 3,000,000 shares of common stock for issuance under its 2005 Stock Option Plan (the “2005 Stock Plan”). The 2005 Stock Plan expired as of December 31, 2014. Vesting provisions of the expired plan were to be determined by the Board of Directors. All stock options under the 2005 Stock Plan expire no later than ten years from the date of grant. Options granted in 2015, 2016 and through May 2017 prior to the approval of the 2017 Stock Incentive Plan were approved and certified by the board of directors on September 6, 2017 under the existing 2005 stock option plan. At December 31, 2018, 1.2 million options remain issued and outstanding under the 2005 stock option plan. The following summarizes stock-based compensation expenses recorded in the condensed consolidated statements of operations: During the years ended December 31, 2018 and 2017, the Company recorded compensation expense related to stock options, restricted stock and warrants of approximately $0.4 million and $0.3 million, respectively. The following table summarizes share based compensation expenses recorded in the consolidated statement of income:
|  | For the Years Ended December 31, |
|  | 2018 |  |  | 2017 |
Cost of Revenue |  | $ | 33 |  |  | $ | 5 |
Selling, General, and administrative |  |  | 337 |  |  |  | 289 |
Total stock based compensation expense |  | $ | 370 |  |  | $ | 294 |
During the year ended December 31, 2018 there were 0.2 million options granted, plus the aforementioned restricted stock grants. The options were granted at a weighted average exercise price of $2.99 per share. The weighted-average grant date fair value of options granted during the year ended December 31, 2018 was $2.65. During the year ended December 31, 2017, the Company granted options to purchase up to 0.7 million shares of common stock to employees at a weighted average exercise price of $0.83 per share. The weighted-average grant date fair value of options granted during the year ended December 31, 2017 was $0.66. The Company issued 15,000 shares of restricted stock to management during the year ended December 31, 2017. The Company received proceeds of approximately $0.2 million and $39,000 related to option exercises during the years ended December 31, 2018 and 2017, respectively. The Company uses the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions during the years ended December 31, 2018 and 2017:
|  | 2018 |  |  | 2017 |
Weighted average expected term |  |  | 6.25 years |  |  |  | 6.25 years |
Weighted average volatility |  |  | 123 | % |  |  | 124 | %
Weighted average risk-free interest rate |  |  | 3.00 | % |  |  | 1.83 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
The weighted average expected term of stock options represents the period of time that the stock options granted are expected to be outstanding based on historical exercise trends. The weighted average expected volatility is based on the historical price volatility of the Company’s common stock. The weighted average risk-free interest rate represents the U.S. Treasury bill rate for the expected term of the related stock options. The dividend yield represents the Company’s anticipated cash dividend over the expected term of the stock options. Forfeitures are accounted for as they occur. A summary of option activity under all equity compensation plans for the years ended December 31, 2018 and 2017 are presented below:
|  | Number of Shares (in thousands) |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value (in thousands) |
Outstanding at December 31, 2016 |  |  | 2,261 |  |  | $ | 0.40 |  |  |  |  |  |  | $ | 135 |
Granted |  |  | 722 |  |  | $ | 0.83 |  |  |  |  |  |  |  |  |
Exercised |  |  | (38 | ) |  |  | 1.02 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (803 | ) |  | $ | 0.33 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2017 |  |  | 2,142 |  |  | $ | 0.56 |  |  |  | 6.5 |  |  | $ | 5,334 |
Outstanding at December 31, 2017 |  |  | 2,142 |  |  | $ | 0.56 |  |  |  |  |  |  |  |  |
Granted |  |  | 215 |  |  | $ | 2.99 |  |  |  |  |  |  |  |  |
Exercised |  |  | (357 | ) |  | $ | 0.44 |  |  |  |  |  |  |  |  |
Forfeited |  |  | (115 | ) |  | $ | 1.48 |  |  |  |  |  |  |  |  |
Outstanding at December 31, 2018 |  |  | 1,885 |  |  | $ | 0.80 |  |  |  | 6.32 |  |  | $ | 4,085 |
Exercisable at December 31, 2018 |  |  | 1,317 |  |  | $ | 0.44 |  |  |  | 5.22 |  |  |  |  |
The following is a summary of stock options outstanding under the plans as of December 31, 2018:
Range |  | Outstanding Number of Options (in thousands) |  |  | WA Remaining Contractual Life (years) |  |  | WA Outstanding Strike Price |  |  | Exercisable Number of Options (in thousands) |  |  | Remaining Exercisable Contractual Life (years) |  |  | WA Exercisable Strike Price |
$0 to $1.00 |  |  |  | 1,542 |  |  |  | 5.71 |  |  | $ | 0.37 |  |  |  | 1,254 |  |  |  | 5.12 |  |  | $ | 0.35 |
$1.01 to $2.00 |  |  |  | 31 |  |  |  | 5.08 |  |  | $ | 1.36 |  |  |  | 19 |  |  |  | 2.57 |  |  | $ | 1.19 |
$2.01 to $3.00 |  |  |  | 221 |  |  |  | 9.28 |  |  | $ | 2.63 |  |  |  | 44 |  |  |  | 9.20 |  |  | $ | 2.63 |
$3.01 to $4.00 |  |  |  | 91 |  |  |  | 9.86 |  |  | $ | 3.44 |  |  |  | - |  |  |  | - |  |  | $ | - |
|  |  | 1,885 |  |  |  | 6.32 |  |  | $ | 0.80 |  |  |  | 1,317 |  |  |  | 5.22 |  |  | $ | 0.44 |
A summary of restricted stock award activity under all equity compensation plans for the year ended December 2018 and 2017 are presented below:
|  | Number of Shares (in thousands) |
Outstanding at December 31, 2016 |  |  | - |
Granted |  |  | 15 |
Vested |  |  | - |
Forfeited |  |  | - |
Outstanding at December 31, 2017 |  |  | 15 |
Outstanding at December 31, 2017 |  |  | 15 |
Granted |  |  | 80 |
Vested |  |  | (19 | )
Forfeited |  |  | - |
Outstanding at December 31, 2018 |  |  | 76 |
A summary of status of the Company’s non-vested share awards as of and for the year ended December 31, 2018 is presented below:
|  | Non-vested Shares Under Option (in thousands) |  |  | Weighted Average Grant Date Fair Value |
Non-vested at December 31, 2017 |  |  | 658 |  |  | $ | 0.81 |
Granted |  |  | 215 |  |  | $ | 2.65 |
Vested |  |  | (256 | ) |  | $ | 0.72 |
Exercised |  |  | - |  |  | $ | - |
Forfeited |  |  | (48 | ) |  | $ | 1.98 |
Non-vested at December 31, 2018 |  |  | 569 |  |  | $ | 1.44 |
As of December 31, 2018, there was approximately $0.6 million of total unrecognized compensation costs related to unvested stock options and restricted stock. These costs are expected to be recognized over a weighted average period of 2.8 years. The total intrinsic value of stock option exercises for the years ended December 31, 2018 and 2017 was $1.1 million and $0.1 million, respectively. The total fair value of stock awards vested during the years ended December 31, 2018, and 2017 was $0.2 million and $0.1 million, respectively.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + 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 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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