|12 Months Ended|
Dec. 31, 2019
|Share-based Payment Arrangement [Abstract]|
NOTE 20. STOCK-BASED AWARDS
Stock options are granted at exercise prices equal to the fair value of the Company’s common stock at the date of grant. The options typically vest over a three-year period and each option, if not exercised or terminated, expires on the seventh anniversary of the grant date.
The Company estimates the grant date fair value of the stock options it grants using the Black-Scholes option pricing model. The Company’s assumption for expected volatility is based on its historical volatility data related to market trading of its own common stock. The Company bases its assumptions for expected life of the new stock option grants on the life of the option granted, and if relevant, its analysis of the historical exercise patterns of its stock options. The dividend yield assumption is based on dividends expected to be paid over the expected life of the stock option. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected option term of each stock option.
The fair value of the options granted during the years ended December 31, 2019 and 2018 was determined using the following assumptions:
*No options were issued during the year ended December 31, 2019.
The following tables provide information about outstanding options for the years ended December 31, 2019 and 2018:
Stock compensation expense related to the options totaled approximately $1,162 and $1,808 for the years ended December 31, 2019 and 2018, respectively.
At December 31, 2019 and 2018, the Company had unrecognized compensation expense related to stock options, of $1,523 and $2,692, respectively. This expense will be recognized over a weighted-average number of years of 1.1 years, based on the average remaining service periods for the awards.
The aggregate intrinsic values presented above represent the total pre-tax intrinsic values (the difference between the Company’s closing stock price of $-0- and $2.34 on the last trading day of 2019 and 2018, respectively, 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 the last trading day during 2019 and 2018. The amount of aggregate intrinsic value will change based on the price of the Company’s Common Stock.
The weighted average grant date fair value per share of Company’s stock options granted during the years ended December 31, 2019 and 2018 was $-0- and $15.84, respectively. The total fair value of options vested during the years ended December 31, 2019 and 2018 was $1,169 and $1,276, respectively.
As of December 31, 2019, there were 2,659,612 common shares available for issuance under the 2017 Plan.
The Company accounts for common stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the warrant agreement. Stock warrants are accounted for as derivative liabilities if the warrants allow for cash settlement or provide for modification of the warrant exercise price in the event subsequent sales of common stock by the Company are at a lower price per share than the then-current warrant exercise price. The Company classifies derivative warrant liabilities on the balance sheet at fair value and changes in the fair value during the periods presented in the statement of operations, which is revalued at each balance sheet date subsequent to the initial issuance of the stock warrant.
All warrants outstanding as of December 31, 2019 were exercisable. The following table shows exercise prices and expiration dates for warrants outstanding as of December 31, 2019:
A summary of the warrant activity the years ended December 31, 2019 and 2018 is as follows:
The Company has assessed its outstanding equity-linked financial statements issued with the term loans, see Note 13 and the convertible notes, see Note 11 and has concluded that the warrants are subject to derivative accounting as a result of certain anti-dilution provisions contained in the warrant agreements. The value of these warrants at issuance are classified as a fee and are being amortized over the life of the respective loan or convertible note. The fair value of these warrants is classified as a liability in the financial statements, with the change in fair value during the future periods being recorded in the statement of operations. See Note 15.
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef