STOCK-BASED COMPENSATION PLANS

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

(4)

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. Restricted Stock Awards are issued to the recipient upon vesting and are not included in outstanding shares until such vesting and issuance occurs.

During the three months ended March 31, 2019, 0.3 million stock option awards were granted under the 2017 Stock Plan. No stock option awards were granted during the three months ended March 31, 2018. At March 31, 2019, 0.9 million stock option awards remain issued and outstanding under the 2017 Stock Plan.

During the three months ended March 31, 2019, 5,000 shares of restricted stock were granted 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 the Restricted Stock Awards are typically released quarterly over three years for the Board of Directors and annually over four years for management.

The following summarizes stock-based compensation expenses recorded in the consolidated statements of operations:

During the three months ended March 31, 2019 and 2018, the Company recorded compensation expense related to stock options and restricted stock of approximately $140,000 and $63,000, respectively, all of which was recorded in selling, general and administrative expense on the accompanying consolidated statements of operations.

During the three months ended March 31, 2019, there were 0.3 million options granted at a weighted average exercise price of $

4.37

per share. The weighted-average grant date fair value of options granted during the three months ended March 31, 2019 was $

3.86

. The Company issued 5,000 shares of restricted stock to management during the three months ended March 31, 2019.

During the three months ended March 31, 2018, no stock options were granted. The company issued 65,000 shares of restricted stock to the Board of Directors and management during the three months ended March 31, 2018.

The Company received proceeds of approximately $

7,000

and $

0.1

million related to option exercises during the three months ended March 31, 2019 and 2018, respectively.

The Company used the Black Scholes option pricing model to determine the fair value of stock option grants, using the following assumptions for the three months ended March 31, 2019. There were no stock options granted during the three months ended March 31, 2018.

	For the Three Months Ended March 31,
	2019
Expected term (years)		6.25
Risk-free interest rate		2.62	%
Expected volatility		121.98	%
Expected dividend yield		-	%

A summary of stock option activity under all equity compensation plans for the three months ended March 31, 2019, is presented below:

						Weighted-
						Average
				Weighted-		Remaining		Aggregate
	Number of			Average		Contractual		Intrinsic
	Shares			Exercise		Term		Value
	(in thousands)			Price		(Years)		(in thousands)
Outstanding at December 31, 2018		1,885		$	0.80		6.3	$	4,085
Granted		305		$	4.37
Forfeited		(27	)	$	1.81
Exercised		(16	)	$	0.51
Outstanding at March 31, 2019		2,147		$	0.45		6.6	$	7,018

Exercisable at March 31, 2019		1,310		$	0.45		5.0	$	5,298

A summary of restricted stock award activity under all equity compensation plans for the three months ended March 31, 2019, is presented below:

	Number of
	Shares
	(in thousands)
Granted but not vested at December 31, 2018		76
Granted		5
Forfeited		-
Vested		(6	)
Granted but not vested at March 31, 2019		75

As of March 31, 2019, the Company had approximately $2.0 million of unrecognized compensation expense related to stock options and restricted stock awards that will be recognized over a weighted average period of approximately 3.1 years.