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13. Share-Based Compensation
 12 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Share-Based Compensation

Note 13SHARE-BASED COMPENSATION

 

On December 27, 2018, Nocera granted Mr. Yin-Chief Cheng quarterly option awards of 250,000 Series “A” Warrants for 20 quarters (5 years) for a total of 5,000,000 series “A” Warrants, subject to continued employment for services as Chairman of the Board and a Director.

 

The estimated fair value of share-based compensation for employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award. The fair value of stock option grant was estimated on the date of grant using the Black-Scholes option pricing model under the following assumptions:

 

   December 31,
2018		  December 31,
2017
       
Dividend yield   –    N/A 
Risk-free interest rate   2.55%   N/A 
Expected term (in years)   3.69    N/A 
Volatility   26.6%   N/A 

 

The Company estimated the grant date fair value of time-based stock option awards using the Black-Scholes option valuation model, which requires assumptions involving an estimate of the fair value of the underlying common stock on the date of grant, the expected term of the options, volatility, discount rate and dividend yield. The Company calculated expected option terms based on the “simplified” method for “plain vanilla” options due to the limited exercise information. The “simplified method” calculates the expected term as the average of the vesting term and the original contractual term of the options. The Company calculated volatility using the average adjusted volatility of quick companies feature of Capital IQ for a period of time reflective of the expected option term, while the discount rate was estimated using the interest rate for a treasury note with the same contractual term as the options granted. Dividend yield is estimated at our current dividend rate, which adjustments for any known future changes in the rate.

 

For the year ended December 31, 2018, $667 was recognized into additional paid-in capital of the Company as a result of reverse merger recapitalization.

 

As of December 31, 2018, total unrecognized compensation cost related to unvested share-based compensation awards was $303,489. This amount is expected to be recognized as stock-based compensation expense in the Company’s consolidated statements of operations and comprehensive income over the remaining vesting period of 4.99 years.