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

6 Months Ended

Jun. 30, 2018

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

Note 9 - Stock-based Compensation

As of June 30, 2018, the Company had 589,940 shares reserved for issuance under the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Equity Plan”).

Stock-based compensation

expense

for the three months ended June 30, 2018 and 2017 was $0.3 million and $0.4 million, respectively, and is included in general and administrative expenses in the consolidated statement of operations and comprehensive income (loss). Stock-based compensation

expense

for the six months ended June 30, 2018 and 2017 was $0.7 million and $0.5 million, respectively, and is included in general and administrative expenses in the consolidated statement of operations and comprehensive income (loss). The Company has not granted any stock options in 2018.

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		(254,027	)		4.37
Outstanding at June 30, 2018		2,061,008			3.29		7.38	$	535,200
Exercisable at June 30, 2018		917,357			4.41		6.04	$	46,440

A summary of the status of the Company’s non-vested stock options as of June 30, 2018 and changes for the six months then ended is presented below:

	Shares			Weighted ‎ Average ‎ Grant Date ‎ Fair Value
Non-ves ted shares at December 31, 2017		1,424,651		$	0.99
Granted		—			—
Vested		(242,000	)		1.23
Forfeited		(39,000	)		1.08
Non-vested shares at June 30, 2018		1,143,651		$	0.94

As of June 30, 2018, there are 579,402 options

outstanding that vest based on the achievement of Company and individual objectives as set by the Board.

As of June 30, 2018, there is approximately $1.2 million of total unrecognized compensation cost related to non-vested awards, which will be recognized over a weighted-average period of 2.6 years.

Restricted Stock Award Activity

The fair value of

restricted stock

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 six months ended June 30, 2018 is presented below:

	Shares			Weighted Average Grant Date Per Share Fair Value

Non-vested at December 31, 2017		985,000		$	2.26
Granted		93,949			2.64
Vested		(240,500	)		2.02
Forfeited		(6,000	)		2.73
Non-vested at June 30, 2018		832,449		$	2.37

As of June 30, 2018, 250,000 restricted shares subject to performance-based vesting were still outstanding. As of June 30, 2018, the Company had approximately $2.0 million of total unrecognized compensation costs related to restricted stock awards, which will be recognized over a weighted average period of 2.9 years.