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12. STOCK-BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
12. STOCK-BASED COMPENSATION | Pursuant to the Company’s Amended and Restated 2007 Equity Incentive Plan approved in 2011(“Plan”), the aggregate number of shares of the Company’s common stock available for grant and issuance of stock options is 4,341,989 shares. On October 5, 2015, during the annual meeting of the Company’s stockholders, the aggregate number of shares reserved and available for grant and issuance pursuant to the Plan was increased to 10,341,989. As of December 31, 2018, the number of shares of the Company’s common stock available for issuance under the Plan is 5,005,489. The fair value of each option award below is estimated on the date of grant using the Black-Scholes option-pricing model. The risk free rate is based on the yield-to-maturity in continuous compounding of the US Government Bonds with the time-to-maturity similar to the expected tenor of the option granted, volatility is based on the annualized historical stock price volatility of the Company, and the expected life is based on the historical option exercise pattern. On December 3, 2018, the Company granted to 17 members of the management staff options to purchase 497,000 shares of the Company’s common stock, at an exercise price of $0.713 per share and the options vested immediately. The options were valued at $121,000 fair value, with assumed 39.91% volatility, a four-year expiration term with an expected tenor of 1.64 years, a risk free rate of 2.78% and no dividend yield. On December 3, 2018, the Company granted to our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer options to purchase 1,200,000 shares of the Company’s common stock, at an exercise price of $0.713 per share and the options vested immediately. The options were valued at $354,700 fair value, with assumed 41.72% volatility, a four-year expiration term with an expected tenor of 2.62 years, a risk free rate of 2.83% and no dividend yield. On December 3, 2018, the Company granted to four independent directors and a consultant options to purchase 80,000 shares of the Company’s common stock at an exercise price of $0.713 per share and the options vested immediately. The options were valued at $20,500 fair value, with assumed 38.87% volatility, a three-year expiration term with expected tenor of 1.97 years, a risk free rate of 2.82% and no dividend yield. For the year ended December 31, 2018 and 2017, total compensation costs for options issued recorded in the consolidated statement of income (loss) were $496,200 and $372,400. There were no related tax benefits as a full valuation allowance was recorded in the years ended December 31, 2018 and 2017. The following table summarizes all Company stock option transactions between January 1, 2017 and December 31, 2018.
|  | Number of Option and Warrants Outstanding and exercisable |  | Weighted- Average Exercise price of Option and Warrants |  | Range of Exercise Price per Common Share
Balance, January 1, 2017 |  |  | 185,000 |  |  | $ | 2.19 |  |  |  | $1.54 - $4.80 |
Granted and vested during the year ended December 31, 2017 |  |  | 661,000 |  |  | $ | 1.47 |  |  |  | $1.44 - $1.98 |
Expired during the year ended December 31, 2017 |  |  | (37,500 | ) |  | $ | 2.18 |  |  |  | $1.83-$2.55 |
Balance, December 31, 2017 |  |  | 808,500 |  |  | $ | 1.61 |  |  |  | $1.44 - $4.80 |
Granted and vested during the year ended December 31, 2018 |  |  | 1,777,000 |  |  | $ | 0.71 |  |  |  | $0.71 |
Expired during the year ended December 31, 2018 |  |  | (67,500 | ) |  | $ | 1.96 |  |  |  | $1.71-$2.55 |
Balance, December 31, 2018 |  |  | 2,518,000 |  |  | $ | 0.97 |  |  |  | $0.71 - $4.80 |
|  | Stock and Warrants Options Exercisable and Outstanding
|  |  |  |  |  | Weighted Average |
|  | Outstanding |  |  |  | Remaining |
|  | at December 31, 2018 |  | Range of Exercise Prices |  | Contractual Life (Years) |
Exercisable and outstanding |  | 2,518,000 |  | $0.71 - $4.80 |  | 3.42 |
All options exercisable and outstanding at December 31, 2018 are fully vested. The aggregate intrinsic value is calculated as the difference between the exercise price of the underling options and the stock price of $0.78 and $1.47 for the Company’s common stock on December 31, 2018 and 2017. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2018 was $119,059. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2017 was $10,571.

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- Definition Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5047-113901 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 + Details
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