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Stock Award Programs | 6 Months Ended
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Jun. 30, 2017
Stock Options and Award Programs [Abstract] |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 11. Stock Award Programs The Company’s stock incentive plan is administered by the Compensation Committee and authorizes the grant or award of incentive stock options, nonqualified stock options, restricted stock awards, stock appreciation rights, dividend equivalent rights, performance unit awards and phantom shares. The Company issues new shares of common stock upon the exercise of stock options. Any shares associated with options forfeited are added back to the number of shares that underlie stock options to be granted under the stock incentive plan. The Company has issued restricted stock awards and non-qualified stock option awards as described below. Valuation of Stock Awards The Company estimates the fair value of all stock awards using a Black-Scholes Option Pricing model (“Black-Scholes model”). The fair value of each stock award is estimated on the date of grant using a Black-Scholes option pricing model (“Black-Scholes model”), which requires an assumption of dividend yield, risk free interest rates, volatility, forfeiture rates and expected option life. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatilities are based on the historical volatility of our common stock over the expected option term. The expected term of options granted is based on analyses of historical employee termination rates and option exercises. Restricted Stock Awards During the six month period ended June 30, 2017, the Company granted 300,000 RSAs to its former Chief Executive Officer that had a grant date fair value of approximately $246,000. The vesting of these RSAs were tied to attainment of certain financial goals as outlined by the Company’s Compensation Committee of the Board of Directors. In connection with his resignation on June 30, 2017, 150,000 shares immediately vested and the remaining 150,000 were cancelled. As a result of share withholdings to satisfy tax liabilities of approximately $21,800, the Company issued 102,525 shares of the Company’s common stock to Mr. Nyweide. The Company's payment of the tax liability associated with this accelerated vesting was recorded as a cash flow from financing activity on the condensed consolidated statements of cash flows. In addition, during the six month period ended June 30, 2017, 125,000 RSAs vested upon expiration of the employment agreement between Steve L. Komar (the former Chief Executive Officer) and the Company on January 3, 2017. On January 3, 2017, the Company issued 84,188 shares of the Company’s common stock. Mr. Komar received less than 125,000 shares vested because he elected to have 40,812 of such shares withheld in satisfaction of the corresponding tax liability of approximately $46,000. The Company's payment of this tax liability was recorded as a cash flow from financing activity on the Condensed Consolidated Statements of Cash Flows. There were no RSAs granted during the six month period ended June 30, 2016. During the six month period ended June 30, 2016, 250,000 RSAs vested upon the Company reporting over $70 million in revenues in its Annual Report on Form 10-K for 2015. On March 15, 2016, the Company issued 209,438 shares of the Company’s common stock in connection with this accelerated vesting event, of which Mr. Komar received 125,000 shares and James T. McCubbin received 84,438 shares. Mr. McCubbin received less than 125,000 shares because he elected to have 40,562 of such shares withheld in satisfaction of the corresponding tax liability of approximately $32,300. The Company's payment of this tax liability was recorded as a cash flow from financing activity on the Condensed Consolidated Statements of Cash Flows. There were no RSAs that were cancelled or expired during the three and six month periods ended June 30, 2016. A summary of RSA activity as of June 30, 2017 and 2016, and changes during six month periods ended June 30, 2017 and 2016 are set forth below:
|  | 2017 |  | 2016 |
|  | (Unaudited) |
NON-VESTED AWARDS |  |  |  |  |  |  |
Non-vested awards outstanding, January 1, |  |  | 250,000 |  |  | 500,000 |
Granted (+) |  |  | 300,000 |  |  | - |
Cancelled (-) |  |  | 150,000 |  |  | - |
Vested (-) |  |  | 275,000 |  |  | 250,000 |
Non-vested awards outstanding, June 30, |  |  | 125,000 |  |  | 250,000 |
Weighted-average remaining contractual life (in years) |  |  | 0.4 |  |  | 1.5 |
Unamortized RSA compensation expense |  | $ | 8,300 |  | $ | 61,700 |
Aggregate intrinsic value of RSAs non-vested, June 30 |  | $ | 57,500 |  | $ | 147,500 |
Aggregate intrinsic value of RSAs vested during the quarter |  | $ | 177,750 |  | $ | 185,000 |
Non-Qualified Stock Option Awards During the six month periods ended June 30, 2017 and 2016, there were NQSO grants of 850,000 and 650,000, respectively, as further described below:
| § | Director Grants. During the six month period ended June 30, 2017, the Board of Directors granted each of the five (5) existing non-employee directors as of June 23, 2017, a grant of 50,000 non-qualified stock options that were valued the award using a Black-Scholes Option Pricing model that assumed a 6-month vesting period, 7-year option term, a risk free rate of 2.0%, volatility of 69.6%, no assumed dividend yield, and a forfeiture rate estimate of 4.2%. During the six month period ended June 30, 2016, the Board of Director granted 50,000 non-qualified stock options to a member of the Board of Directors and valued the award using a Black-Scholes model that assumed a 3-year vesting period, 5-year option term, a risk free rate of 1.7%, volatility of 68.0%, no assumed dividend yield, and a forfeiture rate estimate of 7.5%.
| § | Non-Director Grants. During the six month period ended June 30, 2017, the Company granted 600,000 non-qualified stock options to its former Chief Executive Officer and valued the award using a Black-Scholes Option Pricing model that assumed a 3-year vesting period, 7-year option term, a risk free rate of 2.1%, volatility of 68.2%, no assumed dividend yield, and a forfeiture rate estimate of 4.6%. There were no non-qualified stock options awards issued to non-directors during the six month period ended June 30, 2016.
During the six month period ended June 30, 2017, there were 600,000 non-qualified stock options that were unvested and cancelled due to the resignation of the Company’s former Chief Executive Officer on June 30, 2017. During the six month period ended June 30, 2016, there were 317,000 stock options that were cancelled, of which 205,000 were cancelled due to termination of employment and the remainder expired unexercised at the end of the option term. A summary of stock option activity as of June 30, 2017 and 2016, and changes during six month periods ended June 30, 2017 and 2016 are set forth below:
|  | 2017 |  | 2016 |
|  |  |  |  | Weighted |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  |  |  | Average |
|  |  |  |  | Grant Date |  |  |  |  | Grant Date |
NON-VESTED AWARDS |  | Shares |  | Fair Value |  | Shares |  | Fair Value |
|  | (Unaudited) |
Non-vested balances, January 1, |  |  | 920,000 |  | $ | 0.59 |  |  | 841,672 |  | $ | 0.80 |
Granted (+) |  |  | 850,000 |  | $ | 0.47 |  |  | 650,000 |  | $ | 0.40 |
Cancelled (-) |  |  | 600,000 |  | $ | 0.54 |  |  | 25,000 |  | $ | 0.72 |
Vested (-) |  |  | 110,000 |  | $ | 0.69 |  |  | 534,172 |  | $ | 0.69 |
Non-vested balances, June 30, |  |  | 1,060,000 |  | $ | 0.54 |  |  | 932,500 |  | $ | 0.59 |
|  | 2017 |  | 2016 |
|  |  |  |  | Weighted |  |  |  |  | Weighted |
|  |  |  |  | Average |  |  |  |  | Average |
OUTSTANDING AND EXERCISABLE AWARDS |  | Shares |  | Exercise Price |  | Shares |  | Exercise Price |
|  | (Unaudited) |
Awards outstanding, January 1, |  |  | 2,090,668 |  | $ | 0.86 |  |  | 1,857,668 |  | $ | 0.91 |
Granted (+) |  |  | 850,000 |  | $ | 0.71 |  |  | 650,000 |  | $ | 0.70 |
Cancelled (-) |  |  | 1,023,334 |  | $ | 0.91 |  |  | 317,000 |  | $ | 0.80 |
Exercised (-) |  |  | 30,000 |  | $ | 0.57 |  |  | - |  |  | - |
Awards outstanding, June 30, |  |  | 1,887,334 |  | $ | 0.76 |  |  | 2,190,668 |  | $ | 0.86 |
Awards vested and expected to vest, June 30, |  |  | 1,763,594 |  | $ | 0.77 |  |  | 2,064,739 |  | $ | 0.87 |
Awards outstanding and exercisable, June 30, |  |  | 887,334 |  | $ | 0.75 |  |  | 1,258,168 |  | $ | 0.82 |
The weighted-average remaining contractual life of the non-qualified stock options outstanding, exercisable, and vested and expected to vest as of June 30, 2017 were 3.5 years, 3.5 years and 2.3 years, respectively. There was no intrinsic value associated with options outstanding, exercisable and expected to vest as of June 30, 2017 as the stock price was below the lowest option exercise price. Aggregate intrinsic value represents total pretax intrinsic value (the difference between WidePoint’s closing stock price on June 30, 2017 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2017. The intrinsic value will change based on the fair market value of WidePoint’s stock. The total intrinsic value of stock options exercised during the six months ended June 30, 2017 was approximately $9,000. Share-Based Compensation Expense Share-based compensation (including restricted stock awards) represents both stock options based expense and stock grant expense. The following table sets forth the composition of stock compensation expense included in general and administrative expense for the periods then ended:
|  | THREE MONTHS ENDED |  | SIX MONTHS ENDED |
|  | JUNE 30, |  | JUNE 30, |
|  | 2017 |  | 2016 |  | 2017 |  | 2016 |
|  | (Unaudited) |
Restricted stock compensation expense |  | $ | 129,267 |  | $ | 21,786 |  | $ | 151,321 |  | $ | 43,572 |
Non-qualified stock compensation expense |  |  | 4,795 |  |  | 26,661 |  |  | 67,758 |  |  | 92,754 |
Total share-based compensation before taxes |  | $ | 134,062 |  | $ | 48,447 |  | $ | 219,079 |  | $ | 136,326 |
At June 30, 2017, the Company had approximately $268,300 of total unamortized share-based compensation expense, net of estimated forfeitures, related to stock option plans that will be recognized over the weighted average remaining period of 1.43 years.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -URI http://asc.fasb.org/subtopic&trid=2208855 + Details
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