8. Stock-Based Compensation

Equity Incentive Plans – The Company’s 2013 Equity Compensation Plan (the “2013 Plan”) was adopted for the purpose of providing equity incentives to employees, officers, directors and consultants including options, restricted stock, restricted stock units, stock appreciation rights, other equity awards, annual incentive awards and dividend equivalents. The Company amended the 2013 Plan to increase the number of authorized shares of common stock under the Plan by 390,000 shares, which the Company’s stockholders approved on June 26, 2017. The Company is now authorized to issue 615,000 shares under the amended 2013 Plan.

Stock Options

The following table summarizes the Company’s stock option activity for the six months ended June 30, 2018:

On April 19, 2018, the Company granted 75,000, 75,000, 70,000 and 30,000 stock options to Executive Chairman Jingbo Song, Non-executive Chairman James Kirsch, CEO Michael Wang and CFO Gary Xiao, respectively, in connection with their employment agreements. These options had an aggregate fair value of $540,000, using the Black-Scholes option-pricing model with the following assumptions:

The options are exercisable at an exercise price of $2.82 per share over a ten-year term and vest over two years, with one-third vested upon grant.

The Company recorded non-cash compensation expense, which is included in general and administrative expenses in the accompanying consolidated statement of operations, of approximately $298,000 and $114,000 for the three months ended June 30, 2018 and 2017, respectively, and approximately $387,000 and $530,000 for the six months ended June 30, 2018 and 2017, respectively, related to stock option grants.

Total unrecognized compensation expense related to unvested stock options at June 30, 2018 amounts to approximately $566,000 and is expected to be recognized over a remaining weighted average period of 1.4 years.

Warrants

As of June 30, 2018, there were 170,314 warrants outstanding and exercisable, with a weighted average exercise price of $32.44 per share. The weighted average remaining contractual life of the warrants at June 30, 2018 and December 31, 2017 was 2.8 and 3.3 years, respectively, and the aggregate intrinsic value was 0.

The Company did not grant any warrants to purchase shares of common stock during the six months ended June 30, 2018.

No compensation cost was recognized for the three and six months ended June 30, 2018 and 2017 pertaining to warrants.

Restricted Stock and Restricted Stock Units

On April 19, 2018, the Company granted 35,460 restricted stock units (“RSUs”) to certain Board members and 5,000 restricted stock to CFO Gary Xiao. The RSUs vest 100% on April 19, 2019, subject to continued service on the vesting date. The RSUs have no voting or dividend rights. The fair value of the common stock on the date of grant was $2.82 per share, based upon the closing market price on the grant date. The aggregate grant date fair value of the combined awards amounted to $114,000.

A summary of the restricted stock award activity for the six months ended June 30, 2018 is as follows:

On June 26, 2017, the Company granted 15,544 restricted stock units (“RSUs”) to certain Board members. The RSUs vested 100% on June 28, 2018. The RSUs have no voting or dividend rights. The fair value of the common stock on the date of grant was $7.72 per share, based upon the closing market price on the grant date. The aggregate grant date fair value of the combined awards amounted to $120,000.

The Company recorded non-cash compensation expense of approximately $49,000 and $28,000 for the three months ended June 30, 2018 and 2017, respectively, and approximately $79,000 and $55,000 for the six months ended June 30, 2018 and 2017, respectively, related to restricted stock grants.

Total unrecognized compensation expense related to unvested restricted stock and unvested restricted stock units at June 30, 2018 amounts to approximately $95,000 and is expected to be recognized over a weighted average period of 0.8 year.