The ONE Group Hospitality, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stock-based Compensation

Stock-based Compensation

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 8 - Stock-based Compensation

As of March 31, 2018, the Company had 499,207 shares reserved for issuance under the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Equity Plan”).

Stock-based compensation cost for the three months ended March 31, 2018 and 2017 was $0.3 million and $0.2 million, respectively, and is included in general and administrative expenses in the consolidated statement of operations and comprehensive income (loss). The Company did not grant any stock options during the quarters ended March 31, 2018 and 2017.

Stock Option Activity

Changes in outstanding stock options for 2018 were as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Intrinsic Value
Outstanding at December 31, 2017		2,315,035		3.41
2018 Grants		—		—
Exercised		—		—
Forfeited		(80,000)		3.76
Outstanding at March 31, 2018		2,235,035		3.40		7.07	$	888,040
Exercisable at March 31, 2018		849,384		4.84		4.54	$	2,360

A summary of the status of the Company’s non-vested stock options as of March 31, 2018 and changes for the quarter then ended is presented below:

	Shares		Weighted Average Grant Date Fair Value
Non-vested shares at December 31, 2017		1,424,651	$	0.99
Granted		—		—
Vested		—		—
Forfeited		(39,000)		1.08
Non-vested shares at March 31, 2018		1,385,651	$	0.99

As of March 31, 2018, there are 579,402 milestone-based options outstanding. These options vest based on the achievement of Company and individual objectives as set by the Board.

As of March 31, 2018, there is approximately $1.4 million of total unrecognized compensation cost related to non-vested awards, which will be recognized over a weighted-average period of 2.8 years.

Restricted Stock Award Activity

The Company issues restricted stock awards under the 2013 Equity Plan. The fair value of these awards is determined based upon the closing fair market value of the Company’s common stock on the grant date.

A summary of the status of restricted stock awards and changes for the three months ended March 31, 2018 are presented below:

	Shares		Weighted Average Grant Date Fair Value

Non-vested at December 31, 2017		985,000	$	2.26
Granted		59,834		2.75
Vested		(100,000)		1.42
Forfeited		(6,000)		2.73
Non-vested at March 31, 2018		938,834	$	2.38

As of March 31, 2018, 250,000 restricted shares subject to performance-based milestones were still outstanding. As of March 31, 2018, the Company had approximately $2.2 million of total unrecognized compensation costs related to restricted stock awards, which will be recognized over a weighted average period of 3.2 years.