16. Stock Options

12 Months Ended

Dec. 31, 2015

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

Stock Options

The Company granted stock options to certain employees under the HGI 2007 Stock Plan, as amended (the “Plan”). The Company was authorized to issue 2,950,000 shares subject to options, or stock purchase rights under the Plan. These options (i) vest over a period no greater than two years, (ii) are contingently exercisable upon the occurrence of a specified event as defined by the option agreements, and (iii) expire three months following termination of employment or five years from the date of grant depending on whether or not the options were granted as incentive options or non-qualified options. At September 30, 2009, pursuant to the terms of the merger, all options granted prior to the merger were assumed by the Company and any options available for issuance under the Plan but unissued, have been forfeited and consequently the Company has no additional shares subject to options or stock purchase rights available for issuance under the Plan. As of December 31, 2015, 438,300 option shares have been exercised. Total stock options outstanding as of December 31, 2015 total 170,000. The weighted average remaining contractual life of the outstanding options at December 31, 2015 is approximately 1.8 years.

A summary of stock option activity in the Plan is as follows:

						Weighted
				Exercise		Average
	Number of			Price		Exercise
	Options			Per Option		Price
Outstanding at December 31, 2013		681,700		$	0.01 – 1.59	$	1.00
Granted		–			–		–
Exercised		–			–		–
Canceled		(511,700	)		0.94 – 1.59		1.06
Outstanding at December 31, 2014		170,000		$	0.01	$	0.01
Granted		–			–		–
Exercised		–			–		–
Canceled		–			–		–
Outstanding at December 31, 2015		170,000		$	0.01	$	0.01

All stock options granted under the Plan and as of December 31, 2015 became exercisable upon the occurrence of the merger that occurred on September 30, 2009. As such, equity-based compensation for the options was recognized in earnings from issuance date of the options over the vesting period of the options effective December 31, 2009. Total compensation cost expensed over the vesting period of stock options was $2,103,948, all of which was expensed as of September 30, 2011.

On July 19, 2010, the board of directors approved the Company’s 2010 Incentive Stock Plan (“2010 Stock Plan”). The 2010 Stock Plan allows for the reservation of 7,000,000 shares of the Company’s common stock for issuance under the plan. The 2010 Stock Plan became effective July 19, 2010 and terminates July 18, 2020. As of December 31, 2015, 20,000 shares had previously been granted (all granted in the year ended December 31, 2012) under the 2010 Stock Plan with an exercise price of $0.34 per option. These are the only shares that have been issued under the 2010 Stock Plan. The shares granted vested immediately and can become exercisable for so long as the Company remains a reporting company under the Securities Exchange Act of 1934. Total compensation cost expensed over the vesting period of the stock options was $6,800, all of which was expensed in the year ended December 31, 2012. As of December 31, 2015, none of the shares issued under the 2010 Stock Plan have been exercised.