8. Stockholders' Equity

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Stockholders' Equity

As of December 31, 2017, the Company had 54,962,535 shares of common stock issued and outstanding.

The following provides a detailed description of the stock-based transactions completed during fiscal year 2017 and 2016:

During the year ended December 31, 2017, the Company issued the remaining 49,231 shares of common stock to accredited investors following receipt of $160,000 of gross proceeds ($142,158 net of issuance costs) from the Company’s December 2016 private placement. The Company received total gross cash proceeds from the private placement of $760,000.

During the year ended December 31, 2017, the Company issued 181,572 shares of common stock upon the exercise of stock options and received cash consideration totaling $46,596 upon payment of the exercise price for the options.

During the year ended December 31, 2017, the Company repurchased and retired 1,307 shares of common stock for cash consideration totaling $3,607.

During the year ended December 31, 2017, the Company issued 1,464,997 shares of common stock in exchange for services totaling $5,857,554, which includes the expense activity in our 2015 Agent Equity Program.

During the year ended December 31, 2017, the Company issued 1,000,594 shares of common stock in exchange for services totaling $10,961,631, which included the expense activity for Real Estate Agent Growth and Other Incentive Programs.

During December 2016, the Company issued 184,615 shares of restricted and unregistered shares of common stock to accredited investors in private placement transactions for gross cash proceeds totaling $600,000. In conjunction with the issuance, we incurred expenses of $67,794 (of which $49,980 were paid as of December 31, 2016).

During the year ended December 31, 2016, the Company issued 159,678 shares of restricted and unregistered common stock for cash proceeds totaling $4,898 related to the exercise of stock options.

During the year ended December 31, 2016, the Company issued a total of 785,504 shares of restricted and unregistered common stock in exchange for services totaling $1,778,429, which included the expense activity in our 2015 Agent Equity Program.

During the year ended December 31, 2016, the Company issued 1,018,687 shares of restricted and unregistered common stock in exchange for services totaling $4,996,640, which included the expense for Real Estate Agent Growth and Other Incentive Programs.

During the year ended December 31, 2016, the Company paid $97,000 to acquire the 10.6% non-controlling interest in First Cloud Mortgage. As a result of the acquisition, the Company owned 100% of First Cloud Mortgage as of December 31, 2016.

During the year ended December 31, 2015, the Company issued 420,866 shares of common stock in exchange for services totaling $352,575, which includes the expense activity in our 2015 Agent Equity Program.

During the year ended December 31, 2017, the Company issued 1,192,950 shares of common stock in exchange for services totaling $1,059,023, which included the expense activity for Real Estate Agent Growth and Other Incentive Programs.

2015 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 agents and brokers elect to receive portions of their commissions in common stock, 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. We recognize this 20% discount as an additional cost of sales charge during the periods presented.

All agents and brokers in good standing with the Company are eligible to participate in the Agent Equity Program. To be considered in good standing, agents and brokers must be current in their financial obligations, including all fees, to the Company. In addition, all required licenses, local, state and national dues and subscriptions which are required to conduct real estate business in their state must be current and in effect.

During the years ended December 31, 2017, 2016, and 2015, the Company issued 1,464,997, 785,504 and 420,866 shares, respectively, of common stock to agents and brokers for total consideration of $5,857,539, $1,709,959, and $352,575, respectively for the settlement of commissions payable.

Real Estate 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. Agents who qualify are awarded common stock based on achievement of performance milestones.

Under this program, the Company awards common stock to our agents and brokers that become issuable upon the achievement of certain milestones for both the individual and the recruited agents.

The following table illustrates the Company’s stock activity for the Real Estate Agent Growth Incentive Program for the following periods:

	Shares			Weighted Average Fair Value
Balance, December 31,2014		354,700		$	0.30
Granted		1,011,956			0.84
Issued		–			–
Forfeited		(73,600	)		0.84
Balance, December 31, 2015		1,293,056		$	0.84
Granted		2,452,965			4.05
Issued		(558,567	)		4.30
Forfeited		(129,575	)		2.57
Balance, December 31, 2016		3,057,879		$	4.05
Granted		2,024,498			7.60
Issued		(1,457,538	)		5.27
Forfeited		(565,774	)		4.76
Balance, December 31, 2017		3,059,065		$	7.60

As of December 31, 2017, the Company had 1,953,074 unvested stock awards and 3,059,065 expected to vest, respectively, with unrecognized compensation costs totaling $13,450,031.

Stock Option Awards

During the year ended December 31, 2017, the Company granted 2,848,231 stock options with an estimated grant date fair value of $8,223,561. The assumptions used to estimate the grant date fair value of the awards issued for the year ended December 31, 2017 include: expected volatility based on historical stock prices ranging from 142% to 155%; an average expected term between 6.25 and 10 years; risk free rates based on U.S. Treasury instruments for the expected term of approximately 2.2%; and no dividend payments. The assumptions used to estimate the grant date fair value of the awards issued for the year ended December 31, 2016 include: expected volatility based on historical stock prices ranging from 166% to 178%; an average expected term of 6.25 years; risk free rates based on U.S. Treasury instruments for the expected term of approximately 1.7%; and no dividend payments. The assumptions used to estimate the grant date fair value of the awards issued for the year ended December 31, 2015 include: expected volatility based on historical stock prices ranging from 196% to 223%; an average expected term between or 6.25 10 years; risk free rates based on U.S. Treasury instruments for the expected term of approximately 2.2%; and no dividend payments.

In January 2017, the Company modified certain terms of previously outstanding option awards to purchase 500,000 shares of common stock, including accelerating portions of the award to vest prior to the original terms and the forfeiture of unvested options to purchase 275,000 shares of common stock. As a result of this modification, the Company recognized approximately $368,000 of additional stock option expense during the year ended December 31, 2017.

The following table illustrates the Company’s stock option activity (inclusive of awards accounted for under the intrinsic value and fair value) for the following periods:

	Options			Weighted Average Exercise Price		Intrinsic Value		Weighted Average Remaining Contractual Term (Years)
Balance, December 31, 2014		7,211,479		$	0.15	$	0.17		8.00
Granted		337,750			0.56		–		10.00
Exercised		–			–		–
Forfeited		(267,979	)		–		–		7.10
Balance, December 31, 2015		7,281,250		$	0.17	$	0.17		7.00
Granted		4,130,000			1.53		–		9.75
Exercised		(159,678	)		0.13		1.42		–
Forfeited		(504,014	)		1.19		3.36		–
Balance, December 31, 2016		10,747,558		$	0.67	$	3.56		7.75
Granted		2,848,231			3.76		–		6.15
Exercised		(181,572	)		0.26		6.86		–
Forfeited		(2,540,925	)		2.31		3.20		–
Balance, December 31, 2017		10,873,292		$	1.50	$	5.08		6.65
Exercisable at December 31, 2017		7,692,566			0.57		6.16		5.74
Vested at December 31, 2017		8,031,986		$	0.66	$	6.94		5.87

For the years ended December 31, 2017, 2016, and 2015, the Company recognized total stock-based compensation of $10,961,631 and $4,996,649 (as restated), and $1,059,035 (as restated) respectively, associated with all equity and equity-linked awards.

As of December 31, 2017, the total unrecognized compensation cost associated with options was approximately $4,858,670.

The following table summarizes information about stock options outstanding:

Outstanding								Vested
Options		Weighted Average Exercise Price		Remaining Contractual Life In Years		Aggregate Intrinsic Value		Options		Weighted Average Exercise Price		Remaining Contractual Life In Years		Aggregate Intrinsic Value
	5,204,061		0.13		4.69		38,874,332		5,204,061		0.13		4.69		38,874,332
	333,831		0.14		6.50		2,490,376		333,831		0.14		6.50		2,490,376
	284,000		0.15		5.09		2,115,800		284,000		0.15		5.09		2,115,800
	33,000		0.20		5.00		244,200		33,000		0.20		5.00		244,200
	157,750		0.30		7.00		1,151,575		118,313		0.30		7.00		863,681
	20,000		0.50		7.27		142,000		13,658		0.50		7.27		96,968
	50,000		0.84		7.67		338,000		31,123		0.84		7.67		210,393
	500,000		0.80		8.21		3,400,000		224,315		0.80		8.21		1,525,342
	350,000		1.58		8.34		2,107,000		145,034		1.58		8.34		873,106
	2,000,000		1.76		8.55		11,680,000		966,210		1.76		8.55		5,642,667
	100,000		2.81		8.62		479,000		34,452		2.81		8.62		165,025
	237,420		3.13		9.73		2,311,105		221,661		3.13		9.73		990,824
	50,000		3.35		9.75		212,500		3,082		3.35		9.75		13,099
	668,231		3.40		9.61		2,806,570		253,511		3.40		9.61		1,064,745
	100,000		3.42		9.62		418,000		9,521		3.42		9.62		39,796
	30,000		3.49		9.43		123,300		4,295		3.49		9.43		17,650
	430,000		3.55		9.29		1,741,500		75,986		3.55		9.29		307,745
	10,000		3.82		9.07		37,800		2,322		3.82		9.07		8,777
	200,000		3.84		9.22		752,000		39,178		3.84		9.22		147,310
	100,000		3.85		9.07		375,000		23,288		3.85		9.07		87,329
	15,000		7.60		9.99		–		15,000		7.60		9.99		–