12. STOCKHOLDERS’ EQUITY

As of December 31, 2019, the Company had 66,199,308 shares of common stock issued and 65,273,944 shares outstanding. As of December 31, 2018, the Company had 60,609,102 shares of common stock issued and outstanding.

Our shareholder approved equity plans described below are administered under our 2013 Stock Option Plan and our 2015 Equity Incentive Plan. The purpose of the equity plans is to retain the services of valued employees, directors, officers, agents, and consultants and to incentivize such persons to make contributions to our company and motivate excellent performance.

Agent Equity Program

The Company provides agents and brokers the opportunity to elect to receive 5% of commissions earned from each completed residential real estate transaction in the form of common stock. If such an election is made, they are entitled to receive the equivalent number of shares of common stock, based on the fixed monetary value of the commission payable. The shares are issued at a 20% discount to market on the date of issuance. Prior to 2020, we recognized a 20% discount on these issuances as an additional cost of sales charge during the periods presented. Beginning in January 2020, the Company amended the Agent Equity Plan and changed the discount on issued shares from 20% to 10% .

During the years ended December 31, 2019 and 2018, the Company issued 3,801,603 and 1,684,601 shares, respectively, of common stock to agents and brokers for total consideration of $37,767,851 and, $21,253,677, respectively for the settlement of commissions payable, inclusive of the 20% discount.

Agent Growth Incentive Program

The Company administers an equity incentive program whereby agents and brokers become eligible to receive awards of the Company’s common stock through agent attraction and performance benchmarks. The incentive program encourages greater performance and awards agents with common stock based on achievement of performance milestones. Awards typically vest after performance benchmarks are reached and three years of subsequent service is provided to the Company.

In January 2019, the Company amended the Agent Growth Incentive Program. The amendment changed the share-based performance awards from a fixed-share amount to a fixed-dollar amount of shares based on the achievement of performance metrics. The performance metrics did not change under the amended program. The recognition of the award depends on which performance metric is achieved and the number of shares granted is calculated based on the fixed dollar amount of the respective award and the stock price on the last day of the month in which the agent achieves the performance metric. Once it is probable an agent will reach the performance metric, the award is recognized as a liability. Since the Company’s obligation on the grant date is based on a fixed monetary amount that will be settled with a variable number of shares upon achievement of the performance condition, ASC 480 – Distinguishing Liabilities from Equity requires these awards to be classified as liabilities until the number of shares to be issued becomes fixed. The awards become fixed once the performance metric is achieved. The share price on the last day of the month the performance metric is met is used to calculate the number of shares to be awarded. Upon achievement of the performance metric, the award is no longer considered a liability and is reclassified from a liability to equity.

For the year ended December 31, 2019, the Company’s stock compensation attributable to the Agent Growth Incentive Program was $13,299,784. Of this amount, $900,535 is attributable to the liability classified Agent Growth Incentive Program awards. The entire stock compensation expense related to the Agent Growth Incentive Program is included in general and administrative expense in the consolidated statement of operations.

The following table illustrates changes in the Company’s stock compensation liability during the year ended December 31, 2019:


Stock Compensation Liability Activity	Amount
Balance, December 31, 2018	$	-
Estimated stock awards		900,535
Stock awards reclassified from liability to equity		(623,533)
Balance, December 31, 2019	$	277,002

As of December 31, 2019, the Company had 1,866,483 unvested common stock awards and unrecognized compensation costs totaling $19,934,606 attributable to stock awards where the performance metric has been achieved and the number of shares awarded are fixed. The cost is expected to be recognized over a weighted average period of 1.69 years.

The following table illustrates the Company’s stock activity for the Agent Growth Incentive Program for stock awards where the performance metric has been achieved for the following periods:


			Weighted Average
			Grant Date
	Shares		Fair Value
Balance, December 31, 2017		3,059,065	$	7.60
Granted		2,380,100		11.59
Vested and issued		(889,769)		12.16
Forfeited		(676,519)		4.05
Balance, December 31, 2018		3,872,877	$	11.63
Granted		1,687,457		9.23
Vested and issued		(1,494,633)		11.21
Forfeited		(677,592)		3.39
Balance, December 31, 2019		3,388,109	$	11.04

Stock Option Awards

The fair value of the options issued was calculated using a Black-Scholes-Merton option-pricing model with the following assumptions:


Assumptions:		Year Ended December 31, 2019
Expected term		5 - 6.25 years
Expected volatility		91.04% - 127.93%
Risk-free interest rate		1.48% - 2.70%
Dividend yield		- %

During the year ended December 31, 2019, the Company granted 776,746 stock options to employees with an estimated grant date fair value of $6,494,211.

The following table illustrates the Company’s stock option activity for the following periods:


							Weighted
							Average
			Weighted				Remaining
			Average				Contractual Term
	Options		Exercise Price		Intrinsic Value		(Years)
Balance, December 31, 2017		10,873,292	$	1.50	$	5.08		6.65
Granted		870,000		10.86		(3.78)		9.34
Exercised		(2,594,050)		0.78		11.90		—
Forfeited		(451,629)		3.03		9.59		—
Balance, December 31, 2018		8,697,613	$	2.08	$	5.00		6.07
Granted		776,746		9.44		0.64		9.52
Exercised		(2,261,122)		1.02		8.56		—
Forfeited		(437,881)		7.94		2.45		—
Balance, December 31, 2019		6,775,356	$	2.90	$	8.43		5.59
Exercisable at December 31, 2019		5,368,458		1.37		9.96		4.71
Vested at December 31, 2019		5,460,777	$	1.48	$	9.85		4.78

The grant date fair value of options to purchase common stock is recorded as stock-based compensation over the vesting period. As of December 31, 2019, unrecognized compensation cost associated with options to purchase common stock was $10,655,374, that is expected to be recognized over a weighted-average period of approximately 2 years.

Stock Repurchase Plan

On December 27, 2018 the Company announced that our board of directors (“the Board”) approved a stock repurchase program authorizing us to purchase up to $25,000,000 of our common stock. Purchases under the repurchase program may be made in the open market or through a 10b5-1 plan and are expected to comply with Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The timing and number of shares repurchased depends upon market conditions. The repurchase program does not require the Company to acquire a specific number of shares. The cost of the shares that are repurchased is funded from available working capital.

The repurchase program began on January 2, 2019 and was set to expire on June 28, 2019. On June 12, 2019 the Company under authorization from the Board of Directors, amended the plan. The amended plan extended the repurchase program through December 31, 2019. On November 26, 2019, the Company announced the approval to increase the authorization limits of the Company’s stock repurchase program by the Board. The Board agreed to extend the stock repurchase program through the fourth quarter of 2020 and increase the authorization for the stock repurchase program from $25 million to $75 million of the Company’s common stock.

For accounting purposes, common stock repurchased under the stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. During the year ended December 31, 2019 the Company repurchased 2,743,637 shares of common stock at a total cost of $27,056,136. These shares are considered issued but not outstanding.

In December 2019, the Company’s Board of Directors approved the retirement of the Company’s common stock related to repurchases made during 2019. On December 31, 2019 the Company retired 1,818,273 of common stock available in treasury valued at $18,432,924.