STOCK BASED AWARDS

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

NOTE 11 - STOCK BASED AWARDS

On December 29, 2017 (“Effective Date”), the Company adopted the CURE Pharmaceutical Holding Corp. 2017 Equity Incentive Plan (the “Plan”), pursuant to which an aggregate of 5,000,000 shares of the common stock of the Company are available for grant. The Board of Directors have determined that it is in the best interests of the Company and its stockholders to provide an additional incentive for certain employees, including executive officers, and non-employee members of the Board of Directors of the Company by granting to them awards with respect to the common stock of the Company pursuant to the Plan. The Plan seeks to achieve this purpose by providing for awards in the form of Options, Stock Appreciation Rights, Restricted Stock Awards, Restricted Stock Units, Performance Shares, Performance Units, Cash-Based Awards and Other Stock-Based Awards (“Awards”). The Plan will continue in effect until its termination by the Committee; provided, however, that all Awards must be granted, if at all, within ten (10) years from the Effective Date.

The Company issued 1,170,000 Nonstatutory Stock Options (“NSO”) to employees, including executive officers, and non-employee members of the Board of Directors of the Company during the six months period ended June 30, 2019. The Company did not issue any Restricted Common Stock (“RCS”), or Incentive Stock Options (“ISO”) to any employees, including executive officers, non-employee members of the Board of Directors of the Company, members of the Advisory Board Committee and consultants during the six months period ended June 30, 2019. Vesting periods for awarded RCS, NSO and ISO’s range from immediate to quarterly over a 4 year period. For NSO’s and ISO awarded, the term to exercise their NSO or ISO is 10 years.

Stock Options

The Company’s stock option activity was as follows:

	Options			Weighted Average Exercise Price		Weighted Average Contractual Remaining Life
Outstanding, December 31, 2018		2,313,050		$	0.79		9.27
Granted		1,170,000		$	3.62		9.84
Exercised		-			-		-
Forfeited/Expired		(89,544	)	$	0.74		-
Outstanding, June 30, 2019		3,393,506		$	1.77		9.17
Exercisable at June 30, 2019		1,252,631		$	1.09		8.92

Range of Exercise Price		Number of Awards		Weighted Average Remaining Contractual Life (years)		Weighted Average Exercise Price		Number of Awards Exercisable		Weighted Average Exercise Price
$	0.61 - $4.01		3,393,506		9.17	$	1.77		1,252,631	$	1.09
			3,393,506		9.17	$	1.77		1,252,631	$	1.09

The aggregate intrinsic value of options outstanding and exercisable at June 30, 2019 was $9,518.

The aggregate grant date fair value of options granted during the six months ended March 31, 2019 and year ended December 31, 2018 amounted to $5,500,284 and $1,541,353, respectively. Compensation expense related to stock options for the three and six months periods ended June 30, 2019 was $522,397 and $616,438, respectively. Compensation expense related to stock options for the three and six months periods ended June 30, 2018 was $313,730 for both periods.

As of June 30, 2019, the total unrecognized fair value compensation cost related to unvested stock options was $4,301,588, which is to be recognized over a remaining weighted average period of approximately 9.31 years.

The weighted-average fair value of options granted during the six months ended June 30, 2019 and year ended December 31, 2018, and the weighted-average significant assumptions used to determine those fair values, using a Black-Scholes-Merton (“Black-Scholes”) option pricing model are as follows:

	June 30, 2019			December 31, 2018
Significant assumptions (weighted-average):
Risk-free interest rate at grant date		1.76	%		2.51	%
Expected stock price volatility		129.01	%		156.15	%
Expected dividend payout		-			-
Expected option life (in years)		10			10
Expected forfeiture rate		0	%		0	%

Restricted Stock

The Company’s restricted stock activity was as follows:

Compensation expense related to restricted shares for the three and six months periods ended June 30, 2019 was $136,250 and $272,500, respectively. Compensation expense related to restricted shares for the three and six months periods ended June 30, 2018 was $147,538 for both periods. Information relating to non-vested restricted award shares is as follows:

	Restricted Stock Shares			Weighted Average Grant Date Fair Value
Non-vested, December 31, 2018		317,708			1.44
Granted		-			-
Vested		(187,500	)		1.45
Forfeited/Expired		-			-
Non-vested, June 30, 2019		130,208			1.42