|9 Months Ended|
Sep. 30, 2019
|Share-based Payment Arrangement [Abstract]|
We have two equity incentive plans: the 2008 Stock Option Plan (the “2008 Plan”) and the 2011 Equity Incentive Plan (the “2011 Plan”, and together with the 2008 Plan, the “Stock Option Plans”). The Stock Option Plans are meant to provide additional incentive to officers, employees and consultants to remain in our employment. Options granted are generally exercisable for up to 10 years. Effective April 9, 2018, the Company cannot issue additional options from the 2008 Plan.
At September 30, 2019, 28,524 shares remain available for future awards under the 2011 Plan. On July 23, 2019, the Company issued 3,333 stock options to each of its five non-employee directors. The options will vest in equal monthly installments over the next twelve months and have an exercise price of $4.50 per share.
A summary of employee and non-employee stock option activity for the nine months ended September 30, 2019 for both continuing and discontinuing employees is as follows:
Aggregate intrinsic value represents the difference between the fair value of our common stock and the exercise price of outstanding, in-the-money options.
As of September 30, 2019, total unrecognized compensation cost related to non-vested stock options granted to employees was approximately $214,000 for continuing operations, which we expect to recognize over the next 2.27 years. We expect to incur stock-based compensation for employees who will transfer to Buyer no later than January 15, 2020 pursuant to the TSA described in Note 1.
The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. Forfeitures will be recorded when they occur. No compensation cost is recorded for options that do not vest. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on the historical volatility of our common stock. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future.
The following table presents the weighted-average assumptions used to estimate the fair value of options granted to continuing and discontinuing employees during the periods presented:
Restricted stock awards have been granted to employees, directors and consultants as compensation for services. At September 30, 2019, there was no unrecognized compensation cost related to non-vested restricted stock granted to employees and directors.
The following table summarizes the activities for our non-vested restricted stock awards for the nine months ended September 30, 2019 for both continuing and discontinuing employees:
The TSA with Buyer described in Note 1 requires the Company to continue to employ individuals who will transfer to Buyer no later than six months from the closing of the transaction. Stock-based compensation related to these employees is included in discontinuing operations. The following table presents the effects of stock-based compensation related to stock option and restricted stock awards to employees and non-employees on our continuing operations included in our Unaudited Condensed Consolidated Statements of Operations and Other Comprehensive Income (Loss) during the periods presented (in thousands):
During the three and nine months ended September 30, 2019, we recognized approximately $17,000 and $91,000, respectively, of stock-based compensation related to discontinuing operations. During the three and nine months ended September 30, 2018, we recognized approximately $55,000 and $328,000, respectively, of stock-based compensation related to discontinuing operations.
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef