Stockholders' equity |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' equity |
Stockholders’ equity
Common Stock
As discussed in Note 4. "Acquisition of American DG Energy Inc.", on May 18, 2017, the Company completed the acquisition of ADGE, by means of a stock-for-stock merger, of 100% of the outstanding common shares of ADGE in exchange for 4,662,937 shares of the Company's newly issued common stock.
The holders of Common Stock have the right to vote their interest on a per share basis. At December 31, 2018 and 2017, there were 24,824,746 and 24,766,892 shares of Common Stock outstanding, respectively.
Preferred Stock
On February 13, 2013, the Company authorized 10 million shares of preferred stock. As of December 31, 2018, no preferred shares were issued or outstanding.
Warrants
In conjunction with the Ultratek Joint Venture, the Board of Directors granted 250,000 warrants to Dr. Elias Samaras at $4.00 a share with an expiration date of December 28, 2017. The warrants granted to Dr. Samaras expired unexercised.
Stock-Based Compensation
The Company adopted the 2006 Stock Option and Incentive Plan (the “Plan”), under which the board of directors may grant incentive or non-qualified stock options and stock grants to key employees, directors, advisors and consultants of the Company. The Plan was amended at various dates by the Board of Directors to increase the reserved shares of common stock issuable under the Plan to 3,838,750 as of December 31, 2018, and in June 2017 stockholders approved an amendment to extend the termination date of the Plan to January 1, 2026 and to ratify all Company option grants made after January 1, 2016 (the “Amended Plan”).
Stock options vest based upon the terms within the individual option grants, with an acceleration of the unvested portion of such options upon a change in control event, as defined in the Amended Plan. The options are not transferable except by will or domestic relations order. The option price per share under the Amended Plan cannot be less than the fair market value of the underlying shares on the date of the grant. The number of shares remaining available for future issuance under the Amended Plan as of December 31, 2018 and 2017 was 1,990,980 and 2,123,747, respectively.
In 2018 the Company granted nonqualified options to purchase an aggregate of 367,500 shares of common stock in a range of $2.30 and $4.04 per share to certain officers and employees. These options have a vesting schedule of four years and expire in ten years. The fair value of the options issued in 2018 was $365,054. The weighted-average grant date fair value of stock options granted during 2018 was $0.99 per option.
In 2017, the Company granted nonqualified options to purchase an aggregate of 45,000 shares of common stock for between $3.22 and $3.72 per share to certain employees and a director. These options have a vesting schedule of four years and expire in ten years. The fair value of the options issued in 2017 was $41,113. The weighted-average grant date fair value of stock options granted during 2017 was $0.91 per option.
In 2018 and 2017, option holders exercised 57,854 and (156,124) options, respectively, with an intrinsic value of $137,085 and $149,598, respectively.
Stock option activity for the year ended December 31, 2018 was as follows:
Using the Company's historical forfeiture rate of 15%, the table above uses said rate in the expected to vest calculation. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the average volatility of four comparable publicly traded companies. The average expected life was estimated using the simplified method to determine the expected life based on the vesting period and contractual terms, since it does not have the necessary historical exercise data to determine an expected life for stock options. The Company uses a single weighted-average expected life to value option awards and recognizes compensation on a straight-line basis over the requisite service period for each separately vesting portion of the awards. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term which approximates the expected life assumed at the date of grant.
The weighted average assumptions used in the Black-Scholes option pricing model for options granted in 2018 and 2017 are as follows:
The Company granted restricted stock awards to its employees and directors. The performance based awards have vesting schedules of 25% or 33% per year beginning one year after the Company's IPO in 2014.
Restricted stock activity for the year ended December 31, 2018 was as follows:
During the years ended December 31, 2018 and 2017, the Company recognized stock-based compensation expense of $181,188 and $183,768, respectively, related to the issuance of stock options and restricted stock. No tax benefit was recognized related to the stock-based compensation expense recorded during the years. At December 31, 2018 and 2017, the total compensation cost related to unvested restricted stock awards and stock option awards not yet recognized is $415,941 and $281,554, respectively. This amount will be recognized over a weighted average period of 2.02 years.
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