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Stock Award Programs | 3 Months Ended
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Mar. 31, 2018
Stock Options and Award Programs [Abstract] |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] |
12. | 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 nonqualified 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. The Company records the fair value of all restricted stock awards based on the grant date fair value and amortizes stock compensation on a straight-line basis over the vesting period. Restricted stock award shares are issued when granted and included in the total number of common shares issued but not included in total common shares outstanding until the vesting requirements have been met. As of March 31, 2018, there were 980,851 shares of restricted stock included in shares issued and none included in shares outstanding as the vesting requirements have not been met. Restricted Stock Award Activity A summary of RSA activity as of March 31, 2018 and 2017, and changes during the three month periods ended March 31, 2018 and 2017 are set forth below:
|  | 2018 |  |  | 2017 |
|  | (Unaudited) |
NON-VESTED AWARDS |  |  |  |  |  |  |  |
Non-vested awards outstanding, January 1, |  |  | - |  |  |  | 250,000 |
Granted (+) |  |  | 980,851 | (1) |  |  | 300,000 | (2)
Vested (-) |  |  | - |  |  |  | 125,000 | (3)
Non-vested awards outstanding, March 31, |  |  | 980,851 | (4) |  |  | 425,000 | (4)
Weighted-average remaining contractual life (in years) |  |  | 1.3 |  |  |  | 2.8 |
Unamortized RSA compensation expense |  | $ | 474,116 |  |  | $ | 243,188 |
Aggregate intrinsic value of RSAs non-vested, March 31 |  | $ | 568,894 |  |  | $ | 191,250 |
Aggregate intrinsic value of RSAs vested, March 31 |  | $ | - |  |  | $ | 108,750 |
(1) During the three month period ended March 31, 2018, the Company granted 980,851 RSAs, of which i) 300,000 of RSAs were awarded as part of additional compensation plan to align key employees with the Company’s long term financial goals, and ii) 680,851 were awarded to members of the Company’s board of directors. (2) During the three month period ended March 31, 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. On June 30, 2017, in connection with resignation of our former Chief Executive Officer the Board of Directors accelerated vesting of 150,000 RSAs and cancelled the remaining unvested RSAs. (3) During the three month period ended March 31, 2017, 125,000 RSAs vested upon expiration of the employment agreement between Steve L. Komar and the Company. 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. (4) There were no RSAs that were cancelled or expired during the three month periods ended March 31, 2018 and 2017, respectively. Non-Qualified Stock Option Award Activity A summary of stock option activity as of March 31, 2018 and 2017, and changes during the three month periods ended March 31, 2018 and 2017 are set forth below:
|  | 2018 |  | 2017 |
|  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  |  | Grant Date |  |  |  |  |  | Grant Date |
|  | Shares |  |  | Fair Value |  | Shares |  |  | Fair Value |
|  | (Unaudited) |
NON-VESTED AWARDS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-vested balances, January 1, |  |  | 2,685,004 |  |  | $ | 0.35 |  |  | 920,000 |  |  | $ | 0.59 |
Granted (+) |  |  | - | (1) |  | $ | 0.00 |  |  | 600,000 | (2) |  | $ | 0.48 |
Cancelled (-) |  |  | - | (1) |  | $ | 0.00 |  |  | 60,000 | (3) |  | $ | 0.68 |
Non-vested balances, March 31, |  |  | 2,685,004 |  |  | $ | 0.35 |  |  | 1,460,000 |  |  | $ | 0.54 |
|  | 2018 |  | 2017 |
|  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  |  | Average |  |  |  |  |  | Average |
|  | Shares |  |  | Exercise Price |  | Shares |  |  | Exercise Price |
|  | (Unaudited) |
OUTSTANDING AND EXERCISABLE AWARDS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Awards outstanding, January 1, |  |  | 4,173,334 |  |  | $ | 0.60 |  |  | 2,090,668 |  |  | $ | 0.86 |
Granted (+) |  |  | - | (1) |  | $ | 0.00 |  |  | 600,000 | (2) |  | $ | 0.82 |
Cancelled (-) |  |  | - | (1) |  | $ | 0.00 |  |  | 70,000 | (3) |  | $ | 0.79 |
Exercised (-) |  |  | 50,000 | (4) |  | $ | 0.44 |  |  | 30,000 |  |  | $ | 0.57 |
Awards outstanding, March 31, |  |  | 4,123,334 |  |  | $ | 0.00 |  |  | 2,590,668 |  |  | $ | 0.85 |
Awards vested and expected to vest, March 31, |  |  | 3,527,089 |  |  | $ | 0.60 |  |  | 2,392,908 |  |  | $ | 0.85 |
Awards outstanding and exercisable, March 31, |  |  | 1,438,330 |  |  | $ | 0.62 |  |  | 1,130,668 |  |  | $ | 0.82 |
(1) During the three month period ended March 31, 2018, there were no grants, cancellations, or vesting of non-qualified stock options. (2) During the three month period ended March 31, 2017, the Company granted 600,000 NQSOs to its former Chief Executive Officer and valued the award using a Black-Scholes model with the following valuation inputs: 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%. On June 30, 2017, in connection with resignation of our former Chief Executive Officer the Board of Directors cancelled all unvested NQSOs. (3) During the three month period ended March 31, 2017, there were 70,000 stock options, 60,000 of which were unvested and were cancelled due to termination of employment and the remainder expired unexercised at the end of the option term. (4) The total intrinsic value of stock options exercised during the three month ended March 31, 2018 was approximately $5,500. The weighted-average remaining contractual life of the non-qualified stock options outstanding, exercisable, and vested and expected to vest as of March 31, 2018 were 3.8 years, 3.8 years and 3.5 years, respectively. There was no intrinsic value associated with options outstanding, exercisable and expected to vest as of March 31, 2018 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 March 31, 2018 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 March 31, 2018. The intrinsic value will change based on the fair market value of WidePoint’s stock. 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 |
|  | MARCH 31, |
|  | 2018 |  | 2017 |
|  | (Unaudited) |
Restricted stock compensation expense |  | $ | 49,884 |  | $ | 22,054 |
Non-qualified stock option compensation expense |  |  | 74,520 |  |  | 62,963 |
Total share-based compensation before taxes |  | $ | 124,404 |  | $ | 85,017 |
At March 31, 2018, the Company had approximately $1,014,000 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 2.0 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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