Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.19.1
Equity
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
EQUITY

NOTE 14 – EQUITY

 

Shares Authorized

 

The Company is authorized to issue 10,000,000 shares of preferred stock and 490,000,000 shares of common shares with a par value of $0.0001 per share.

 

There are no shares of its preferred stock issued and outstanding as of March 31, 2019 and December 31, 2018.

 

There are 74,340,539 and 73,830,751 shares of its common stock issued as of March 31, 2019 and December 31, 2018, respectively

 

There are 73,820,539 and 73,310,751 shares of its common stock outstanding as of March 31, 2019 and December 31, 2018, respectively.

 

Common Shares Issued for Warrant Exercise

 

On January 9, 2019, the Company issued 350,856 shares of its common stock upon cashless exercise of warrants to purchase 578,891 shares of common stock.

 

Common Shares Issued for Option Exercise

 

On February 27, 2019, the Company issued 158,932 shares of its common stock upon cashless exercise of options to purchase 200,000 shares of common stock.

 

Options

 

The following table summarizes the shares of the Company’s common stock issuable upon exercise of options outstanding at March 31, 2019:

 

Options Outstanding     Options Exercisable  
Range of Exercise Price     Number Outstanding at March 31,
2019
    Range of Weighted Average Remaining Contractual Life (Years)     Weighted Average Exercise Price     Number Exercisable at March 31, 2019     Weighted Average Exercise
Price
 
$ 0.50       2,000,000       7.87     $ 0.50       1,444,444     $ 0.50  
  1.49       60,000       3.08       1.49       60,000       1.49  
  1.00       50,000       3.59       1.00       50,000       1.00  
  1.00       80,000       1.59       1.00       80,000       1.00  
  2.50       110,000       3.76       2.50       110,000       2.50  
  1.00       80,000       2.08       1.00       80,000       1.00  
  2.30       20,000       4.18       2.30       20,000       2.30  
  2.30       20,000       4.26       2.30       20,000       2.30  
  2.80       20,000       4.33       2.80       20,000       2.80  
  2.80       20,000       4.37       2.80       13,334       2.80  
  1.00       180,000       2.59       1.00       90,000       1.00  
  2.75       250,000       4.76       2.75       62,500       2.75  
  2.00       1,950,000       4.76       2.00       487,500       2.00  
$ 0.50–2.80       4,840,000       5.80     $ 1.35       2,537,778     $ 1.07  

 

Stock options granted to employee and director

 

Employee and director stock option activities for the three months ended March 31, 2019 were as follows:

 

    Number of Options     Weighted Average Exercise Price  
Outstanding at December 31, 2018     2,280,000     $ 0.69  
Granted     2,200,000       2.09  
Terminated / Exercised     -       -  
Outstanding at March 31, 2019     4,480,000     $ 1.37  
Options exercisable at March 31, 2019     2,274,444     $ 1.07  
Options expected to vest     2,205,556     $ 1.69  

 

The fair values of options granted to employee and director during the three months ended March 31, 2019 and 2018, respectively, were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

 

    Three Months Ended
March 31,
2019
    Three Months Ended
March 31, 2018
 
Dividend rate     0       0  
Terms (in years)     5.0       5.0  
Volatility     150.61 %     185.28 %
Risk-free interest rate     2.37% - 2.49%       2.25 %

 

The aggregate fair value of the options granted to employee and director during the three months ended March 31, 2019 was $5,723,438, of which, $1,430,860 for the three months ended March 31, 2019 has been reflected as compensation and related benefits on the accompanying unaudited condensed consolidated statements of operations because the options were fully earned and non-cancellable.

 

The aggregate fair value of the options granted to employee and director during the three months ended March 31, 2018 was $289,150, of which, $72,287 has been reflected as compensation and related benefits on the accompanying unaudited condensed consolidated statements of operations because the options were fully earned and non-cancellable.

 

As of March 31, 2019, the aggregate value of nonvested employee and director options was $4,987,024, which will be amortized as stock-based compensation expense as the options are vesting, over the remaining 0.83 years.

 

The aggregate intrinsic values of the employee and director stock options outstanding and the employee and director stock options exercisable at March 31, 2019 was $18,042,100 and $9,850,501, respectively.

 

A summary of the status of the Company’s nonvested employee and director stock options granted as of March 31, 2019 and changes during the three months ended March 31, 2019 is presented below:

 

    Number of Options     Weighted Average Exercise Price     Grant Date Fair Value  
Nonvested at December 31, 2018     722,222     $ 0.50     $ 902,779  
Granted     2,200,000       2.09       5,723,438  
Vested     (716,666 )     (1.72 )     (1,639,193 )
Nonvested at March 31, 2019     2,205,556     $ 1.69     $ 4,987,024  

 

Stock Options Granted to Non-employee

 

Non-employee stock option activities for the three months ended March 31, 2019 were as follows:

 

    Number of Options     Weighted Average Exercise Price  
Outstanding at December 31, 2018     560,000     $ 1.06  
Granted     -       -  
Exercised     (200,000 )     1.00  
Outstanding at March 31, 2019     360,000       1.10  
Options exercisable at March 31, 2019     263,334     $ 1.09  
Options expected to vest     96,666     $ 1.12  

 

The fair values of these non-employee options vested in three months ended March 31, 2019 and 2018, and nonvested non-employee options as of March 31, 2019 and 2018, respectively, were estimated using the Black-Scholes option-pricing model with the following assumptions:

 

    Three Months Ended
March 31,
2019
    Three Months Ended
March 31,
2018
 
Dividend rate     0       0  
Terms (in years)     2.59 – 4.50       3.0  
Volatility     150.38% – 154.33 %     183.23% - 188.29 %
Risk-free interest rate     2.21% - 2.53 %     2.29% - 2.37 %

 

Stock-based compensation expense associated with stock options granted to non-employee is recognized as the stock options vest. The stock-based compensation expense related to non-employee will fluctuate as the fair value of the Company’s common stock fluctuates. Stock-based compensation expense associated with stock options granted to non-employee amounted to $633,554 and $210,737 for the three months ended March 31, 2019 and 2018, respectively.

 

As of March 31, 2019, the aggregate value of vested and nonvested non-employee options was $177,507, which will be amortized as stock-based compensation expense over the remaining 0.38 years.

 

The aggregate intrinsic values of the non-employee stock options outstanding and the non-employee stock options exercisable at March 31, 2019 was $1,548,000 and $1,134,668, respectively.

 

A summary of the status of the Company’s nonvested non-employee stock options granted as of March 31, 2019 and changes during the three months ended March 31, 2019 is presented below:

 

    Number of Options     Weighted Average Exercise Price     Fair Value at
March 31, 2019
 
Nonvested at December 31, 2018     193,333     $ 1.12          
Granted     -       -          
Vested     (96,667 )     (1.12 )        
Forfeited     -       -          
Nonvested at March 31, 2019     96,666     $ 1.12     $ 177,507  

 

Warrants

 

Stock warrants activities during the three months ended March 31, 2019 were as follows:

 

    Number of Warrants     Weighted Average Exercise Price  
Outstanding at December 31, 2018     578,891     $ 1.28  
Issued     -       -  
Exercised     (578,891 )     (1.28 )
Outstanding and exercisable at March 31, 2019     -     $ -