Annual report pursuant to Section 13 and 15(d)

Stock-Based Compensation

v3.6.0.2
Stock-Based Compensation
12 Months Ended
Dec. 31, 2016
Stock-Based Compensation [Abstract]  
STOCK-BASED COMPENSATION
17. STOCK-BASED COMPENSATION

 

The Company adopted formal stock option plans in 2012 and 2015. The Company issued options prior to the adoption of this plan, but the amount was not material. Historically, the Company has awarded stock grants to certain of its employees and consultants that did not contain any performance or service conditions. Compensation expense included in the Company’s consolidated statement of operations includes the fair value of the awards at the time of issuance. When common stock was issued, it was valued at the trading price on the date of issuance and was expensed as it was issued. During the year ended December 31, 2015, the Company granted an aggregate of 3,258,539 shares under the 2012 and 2015 performance incentive plans, of which 1,366,531 shares were subject to a 3-year vesting term, 25,000 shares were subject to 6-month vesting, and 1,867,008 shares had no vesting terms. During the year ended December 31, 2016, the Company granted an aggregate of 2,055,741 shares under the 2015 performance incentive plan, of which 267,500 shares were subject to a 3-year vesting term, 979,171 shares were subject to 6-month vesting, 100,000 shares were scheduled to vest on January 1, 2017, 412,500 shares were scheduled to vest on June 30, 2017, 75,000 shares were scheduled to vest on December 31, 2017, and 221,570 shares had no vesting terms.

 

2012 Performance Incentive Plan, Employee Stock Purchase Plan, and 2015 Performance Incentive Plan

 

On November 16, 2012, the Company adopted its 2012 Equity Incentive Plan (the "Equity Incentive Plan") and its Employee Stock Purchase Plan (the "Stock Purchase Plan"). Both plans were established to attract, motivate, retain and reward selected employees and other eligible persons. For the Equity Incentive Plan, employees, officers, directors and consultants who provide services to the Company or one of the Company’s subsidiaries may be selected to receive awards. A total of 2,325,000 shares of the Company’s common stock was authorized for issuance with respect to awards granted under the Equity Incentive Plan. On January 1, 2015, pursuant to the terms of the Equity Incentive Plan, an additional 500,000 shares of the Company’s common stock were made available for issuance under the Equity Incentive Plan. From the inception of the Equity Incentive Plan through the year ended December 31, 2016, an aggregate of 2,909,389 shares were granted under the Equity Incentive Plan, and 149,359 shares authorized under the Equity Incentive Plan remain available for award purposes. In connection with the Company’s adoption of the Company’s 2015 Performance Incentive Plan, which is discussed below, the Company agreed that no additional grants of awards will be made under the Equity Incentive Plan.

 

The Stock Purchase Plan is designed to allow the Company’s eligible employees and the eligible employees of the Company’s participating subsidiaries to purchase shares of the Company’s common stock, at semi-annual intervals, with their accumulated payroll deductions. A total of 500,000 shares of the Company’s common stock was initially available for issuance under the Stock Purchase Plan. The share limit will automatically increase on the first trading day in January of each year (commencing with January 2014) by an amount equal to lesser of (i) 1% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, (ii) 500,000 shares, or (iii) such lesser number as determined by the Company’s board of directors. As of December 31, 2016 and 2015, no shares had been purchased under the Stock Purchase Plan and, at December 31, 2016, 500,000 shares were authorized for issuance under the Stock Purchase Plan.

  

On June 26, 2015, the Company adopted, and on September 21, 2015, the Company’s stockholders approved, the Company’s 2015 Performance Incentive Plan (the “Performance Incentive Plan”). The plan was established to provide a means through the grant of awards to attract, motivate, retain, and reward selected employees and other eligible persons. For the Performance Incentive Plan, employees, officers, directors and consultants who provide services to the Company or one of the Company’s subsidiaries may be selected to receive awards. A total of 4,177,447 shares of the Company’s common stock is authorized for issuance with respect to awards granted under the Performance Incentive Plan. In addition, the share reserve under the Performance Incentive Plan will be increased to include shares subject to outstanding awards under the Equity Incentive Plan that are forfeited, cancelled or otherwise settled under the Equity Incentive Plan without the issuance of shares of common stock. The number of authorized shares under the Performance Incentive Plan will automatically increase on the first trading day in January of each year (commencing with January 2016) by an amount equal to lesser of (i) 7.5% of the total number of outstanding shares of the Company’s common stock on the last trading day in December in the prior year, and (ii) such lesser number as determined by the Company’s board of directors. Any shares subject to awards that are not paid, delivered or exercised before they expire or are canceled or terminated, or fail to vest, as well as shares used to pay the purchase or exercise price of awards or related tax withholding obligations, will become available for other award grants under the Performance Incentive Plan. During the year ended December 31, 2016, the Company repurchased 796,488 shares previously granted. During the years ended December 31, 2016 and 2015, 2,555,741 and 964,629 shares, respectively, were granted under the Performance Incentive Plan, and at December 31, 2016 and 2015, 1,453,565 and 1,035,371 shares, respectively, authorized under the Performance Incentive Plan remained available for award purposes.

 

Restricted Stock

 

The following table summarizes the Company’s restricted stock unit activity for the years ended December 31, 2016 and 2015.

 

          Weighted Average  
    Number of     Grant Date  
    Shares     Fair Value  
Outstanding at December 31, 2014     1,373,987     $ 5.67  
Granted     1,391,531     $ 2.31  
Vested     (614,497 )   $ 5.41  
Forfeited/Cancelled     (127,905 )   $ 4.62  
Exercised     -     $ -  
Outstanding at December 31, 2015     2,023,116     $ 3.50  
                 
Granted     2,334,171     $ 0.59  
Vested     (672,411 )   $ 4.16  
Forfeited/Cancelled     (796,488 )   $ 1.15  
Exercised     -     $ -  
Outstanding at December 31, 2016     2,888,388     $ 1.64  

  

For the years ended December 31, 2016 and 2015, the Company incurred $85 and $4,901, respectively, in stock compensation expense from the issuance of common stock to employees and consultants.

 

 The Company recorded an additional $3,384 and $3,746 in stock compensation expense on shares subject to vesting terms in previous periods during the years ended December 31, 2016 and 2015, respectively. 

 

Issuance of shares of common stock to employees, directors, and officers

  

During January and February 2015, the Company issued an aggregate of 216,000 shares of its common stock to various employees for services rendered. The shares were valued between $2.53 and $2.87 per share. The Company recorded $30 to salaries and wages expense.

 

During January and March 2015, the Company issued an aggregate of 103,583 shares to employees for services rendered. The shares were issued at $2.16 per share. The Company had accrued for $86 of the expense in 2014 and recognized an additional $70 as stock compensation expense during the three months ended March 31, 2015.

 

During April and June 2015, the Company issued an aggregate of 2,864,953 shares of its common stock to various employees for services rendered. The shares were valued between $1.98 and $2.92. The Company recorded $4,367 to salaries and wages expense related to shares issued with no vesting terms. 

 

During July 2016, the Company issued an aggregate of 2,044,357 shares of its common stock to various employees and officers for services rendered. The shares were valued between $0.58 and $0.68 per share. The Company recorded the expense to salaries and wages expense.

 

Issuance of shares of common stock to employees for incentive earned

 

During March 2016, the Company issued an aggregate of 73,519 shares to an employee in settlement of incentives earned. The shares were values at $0.68 per share. The Company had accrued for $50 of the expense in 2015.

 

During July 2016, the Company issued an aggregate of 64,814 shares to two employees in settlement of incentives earned subject to a six-month vesting schedule. The Company recorded the expense to salaries and wages expense.

 

The following table summarizes the amount of stock compensation expense to be recognized for vesting shares.

 

Years Ending December 31,   Future Stock Compensation Expense  
2017   $ 1,727  
2018     256  
2019     18  
Total   $ 2,001  

 

Options

 

The following table summarizes the Company’s stock option activity and related information for the years ended December 31, 2016 and 2015.

 

          Weighted Average        
    Shares Underlying Options     Exercise 
Price
    Remaining Contractual Term 
(in years)
    Aggregate Intrinsic Value 
(in thousands)
 
Outstanding at January 1, 2015     175,000     $ 3.72       7.29     $ 140  
Granted     -     $ -       -     $ -  
Forfeited and expired     -     $ -       -     $ -  
Exercised     -     $ -       -     $ -  
Outstanding at December 31, 2015     175,000     $ 3.72       6.29     $ 476  
Exercisable at December 31, 2015     158,333     $ 3.72       6.29     $ 431  
                                 
Granted     -     $ -       -     $ -  
Forfeited and expired     -     $ -       -     $ -  
Exercised     -     $ -       -     $ -  
Outstanding at December 31, 2016     175,000     $ 3.72       5.29     $ 646  
Exercisable at December 31, 2016     166,667     $ 3.72       5.29     $ 615  

 

The aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock as of December 31, 2016 and 2015 of $0.03 and $1.00, respectively.