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 from 225,000 shares to 615,000 shares, which the Company’s stockholders approved on June 26, 2017. The Company further amended the 2013 Plan to increase the number of authorized shares of common stock under the Plan by 300,000 shares, which the Company’s stockholders approved and ratified on November 8, 2018. The Company is now authorized to issue 915,000 shares under the amended 2013 Plan.

Stock Options

The following table summarizes the Company’s stock option activity for the nine months ended September 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. On September 7, 2018, the Company granted 3,000 stock options to an employee, in connection with his employment agreement. These options had an aggregate fair value of $547,000, using the Black-Scholes option-pricing model with the following assumptions:

The April 19, 2018 options granted 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, while the September 7, 2018 options granted are exercisable at an exercise price of $3.07 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 condensed consolidated statement of operations, of approximately $137,000 and $88,000 for the three months ended September 30, 2018 and 2017, respectively, and approximately $524,000 and $618,000 for the nine months ended September 30, 2018 and 2017, respectively, related to stock option grants.

Total unrecognized compensation expense related to unvested stock options at September 30, 2018 amounted to approximately $435,000 and is expected to be recognized over a remaining weighted average period of 1.2 years.

Warrants

As of September 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 September 30, 2018 and December 31, 2017 was 2.6 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 nine months ended September 30, 2018.

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

Restricted Stock and Restricted Stock Units

During the first nine months of 2018, the Company granted 42,727 restricted stock units (“RSUs”) to certain Board members and 9,886 restricted stock to senior management. The RSUs vest one year after they were awarded, 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 dates of grant were $2.82 and $3.07 per share, based upon the closing market price on the grant dates. The aggregate grant date fair value of the combined awards amounted to $154,000.

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

On June 26, 2017, the Company granted 15,544 RSUs to certain Board members. The RSUs vested 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 expenses of approximately $34,000 and $58,000 for the three months ended September 30, 2018 and 2017, respectively, and approximately $113,000 and $113,000 for the nine months ended September 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 September 30, 2018 amounts to approximately $101,000 and is expected to be recognized over a weighted average period of 0.5 year.