Quarterly report pursuant to Section 13 or 15(d)

EQUITY AND EARNINGS PER SHARE (Tables)

v3.19.2
EQUITY AND EARNINGS PER SHARE (Tables)
6 Months Ended
Jun. 30, 2019
Stockholders' Equity Note [Abstract]  
Schedule of outstanding options
The following is a summary of the changes in the Company’s outstanding options for the six months ended June 30, 2019:
 
Number of Options
 
Weighted Average Strike Price
 
Weighted Average Life Remaining (in years)
Balance at December 31, 2018
8,436,931

 
$
3.72

 
 
Granted (B)
695,652

 
4.66

 
 
Balance at June 30, 2019
9,132,583

 
$
3.79

 
6.26
 
 
 
 
 
 
Exercisable at June 30, 2019
2,705,586

 
$
2.64

 
3.78


Schedule of outstanding options summary
As of June 30, 2019, the Company’s outstanding options were summarized as follows:
 
 
Number of Options
Held by the former Manager
 
2,705,253

Issued to the former Manager and subsequently transferred to certain of the Manager’s employees (A)
 
2,304,990

Issued to the independent directors
 
333

Issued to Drive Shack employees (B)
 
4,122,007

Total
 
9,132,583

Weighted average strike price
 
$
3.79


(A)
The Company and the former Manager agreed that options held by certain employees formerly employed by the Manager would not terminate or be forfeited as a result of the Termination and Cooperation Agreement, and the vesting of such options relate to the relevant holder’s employment with the Company and its affiliates following January 1, 2018. In both February 2017 and April 2018, the former Manager issued 1,152,495 options to certain employees formerly employed by the Manager as part of their compensation. The options fully vest and are exercisable one year prior to the option expiration date, beginning March 2020 through January 2024. In July 2019, a certain employee was terminated by the Company and 921,992 options reverted back to the former Manager.  The Company will reverse $1.2 million in stock compensation expense related to these options.
(B)
In November 2018, the Company issued options to certain employees as provided in their employment agreements. The options fully vest and are exercisable as follows: 3,351,355 options vest in equal annual installments on each of the first three anniversaries of the grant date; and 75,000 options fully vest on the third anniversary of the grant date.
Schedule of stock option fair value assumptions
The fair value of the options granted was determined using the following assumptions:

Option Valuation Date
 
April 11, 2019

Expected Volatility
 
36.80
%
Expected Dividend Yield
 
0.00
%
Expected Remaining Term
 
6.0 years

Risk-Free Rate
 
2.34
%
Fair Value at Valuation Date
 
$
1,280

Summary of changes in RSUs
The following is a summary of the changes in the Company’s RSUs for the six months ended June 30, 2019.

 
 
Number of RSUs
 
Weighted Average Grant Date Fair Value (per unit)
Balance at December 31, 2018
 
54,641

 
$
5.02

Granted
 
545,518

 
$
4.69

Forfeited
 
(27,542
)
 
$
4.72

Balance at June 30, 2019
 
572,617

 
$
4.72

Schedule of amounts used in computing basic and diluted EPS
The following table shows the Company's basic and diluted earnings per share (“EPS”):
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Numerator for basic and diluted earnings per share:
 
 
 
 
 
 
 
Loss from continuing operations after preferred dividends and noncontrolling interests
$
(14,354
)
 
$
(6,198
)
 
$
(30,349
)
 
$
(23,890
)
Loss Applicable to Common Stockholders
$
(14,354
)
 
$
(6,198
)
 
$
(30,349
)
 
$
(23,890
)
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per share - weighted average shares
67,029,610

 
66,977,104

 
67,028,364

 
66,977,104

Effect of dilutive securities
 
 
 
 
 
 
 
Options

 

 

 

RSUs

 

 

 

Denominator for diluted earnings per share - adjusted weighted average shares
67,029,610

 
66,977,104

 
67,028,364

 
66,977,104

Basic earnings per share:
 
 
 
 
 
 
 
Loss from continuing operations per share of common stock, after preferred dividends and noncontrolling interests
$
(0.21
)
 
$
(0.09
)
 
$
(0.45
)
 
$
(0.36
)
 
 
 
 
 
 
 
 
Loss Applicable to Common Stock, per share
$
(0.21
)
 
$
(0.09
)
 
$
(0.45
)
 
$
(0.36
)
 
 
 
 
 
 
 
 
Diluted earnings per share:
 
 
 
 
 
 
 
Loss from continuing operations per share of common stock, after preferred dividends and noncontrolling interests
$
(0.21
)
 
$
(0.09
)
 
$
(0.45
)
 
$
(0.36
)
 
 
 
 
 
 
 
 
Loss Applicable to Common Stock, per share
$
(0.21
)
 
$
(0.09
)
 
$
(0.45
)
 
$
(0.36
)