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SEC Filings

10-Q
SEVEN STARS CLOUD GROUP, INC. filed this Form 10-Q on 08/14/2017
Entire Document
 

 

Seven Stars Cloud Group, Inc., Its Subsidiaries and Variable Interest Entities
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

As of June 30, 2017, approximately $279,108 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.87 years. The total fair value of shares vested during the six months ended June 30, 2017 and 2016 was approximately $19,357 and $16,000,  respectively. 

 

(b) Warrants

 

In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to service providers to purchase common stock of the Company.

 

As of June 30, 2017, the weighted average exercise price of the warrants was $2.23 and the weighted average remaining life was 0.96 years. The following table outlines the warrants outstanding and exercisable as of June 30, 2017 and December 31, 2016:

 

    June 30,     December 31,            
    2017     2016            
    Number of     Number of            
    Warrants     Warrants            
Warrants Outstanding   Outstanding and
Exercisable
    Outstanding and
Exercisable
    Exercise
Price
    Expiration
Date
                       
2012 August Financing Warrants  (i)     428,716       536,250     $ 1.50     08/30/17
2013 Broker Warrants (Series D Financing)     100,000       228,571     1.75     07/05/18
2013 Broker Warrants (Convertible Note)     114,285       114,285     1.75     11/04/18
2014 Broker Warrants (Series E Financing)     1,085,714       1,085,714     1.75     01/31/19
2016 Warrants to SSS (Note 12)     1,818,182       1,818,182     $ 2.75     03/28/18
      3,546,897       3,783,002              

 

(i)The warrants are classified as derivative liabilities as disclosed in Note 13.

 

(c) Restricted Shares

 

In January, 2017, the Company granted 35,000 restricted shares to one employee under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $43,750. As this employee left the Company in February, no expense was recorded.

 

In March and April, 2017, the Company granted 365,000 restricted shares to certain employees under the “2010 Plan”. The restricted shares have a vesting period of four years with the first one-fourth vesting on the first anniversary from grant date and the remaining three-fourth vesting ratably over twelve quarters. The grant date fair value of the restricted shares was $778,200.

 

A summary of the restricted shares is as follows:

 

   Shares   Weighted-average
fair value
 
Restricted shares outstanding at January 1, 2017   228,550   $1.75 
Granted   400,000    2.05 
Forfeited   (60,000)   1.49 
Vested   (105,215)   1.72 
Restricted shares outstanding at June 30, 2017   463,335   $2.05 

 

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