Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

v3.8.0.1
Stock-Based Compensation
3 Months Ended
Mar. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
5. Stock-Based Compensation
  
Stock Incentive Plans
 
On March 20, 2007, the Company’s Board of Directors approved the 2007 Stock Incentive Plan (the “2007 Stock Plan”) for the issuance of up to 2,500,000 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. This plan was approved by the stockholders on November 2, 2007. The exercise price of stock options under the 2007 Stock Plan is determined by the compensation committee of the Board of Directors and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. The total number of shares of stock with respect to which stock options and stock appreciation rights may be granted to any one employee of the Company or a subsidiary during any one-year period under the 2007 plan shall not exceed 250,000. Options become exercisable over various periods from the date of grant, and generally expire ten years after the grant date. As of March 31, 2018, there were 712,258 options issued and outstanding under the 2007 Stock Plan.
 
On November 2, 2010, the Board of Directors and stockholders adopted the 2010 Stock Incentive Plan (“2010 Stock Plan”) for the issuance of up to 3,000,000 shares of common stock to be granted through incentive stock options, nonqualified stock options, stock appreciation rights, dividend equivalent rights, restricted stock, restricted stock units and other stock-based awards to officers, other employees, directors and consultants of the Company and its subsidiaries. On October 22, 2013, the stockholders approved and adopted an amendment to the Company’s 2010 Incentive Stock Plan to increase the number of shares of Company’s common stock reserved for issuance under the Plan from 3,000,000 to 6,000,000. On May 15, 2015, the stockholders approved and adopted an amendment to the Company’s 2010 Incentive Stock Plan to increase the number of shares of the Company’s common stock reserved for issuance under the Plan from 6,000,000 to 8,000,000. On August 25, 2016, the stockholders approved and adopted an amendment to the 2010 Stock Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2010 Stock Plan from 8,000,000 to 14,000,000. On September 7, 2017, the stockholders approved and adopted an amendment to the 2010 Stock Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2010 Stock Plan from 8,000,000 to 17,500,000. The exercise price of stock options under the 2010 Stock Plan is determined by the compensation committee of the Board of Directors and may be equal to or greater than the fair market value of the Company’s common stock on the date the option is granted. Options become exercisable over various periods from the date of grant and expire between five and ten years after the grant date. As of March 31, 2018, there were 11,476,257 options issued and outstanding under the 2010 Stock Plan.
 
In the event of an employee’s termination, the Company will cease to recognize compensation expense for that employee. There is no deferred compensation recorded upon initial grant date. Instead, the fair value of the stock-based payment is recognized over the stated vesting period.
 
The Company has applied fair value accounting for all stock-based payment awards since inception. The fair value of each option or warrant granted is estimated on the date of grant using the Black-Scholes option pricing model. There were no options granted during the three months ended March 31, 2018. The assumptions used for the three months ended March 31, 2017 are as follows:
 
Exercise price
 
 
$0.83-$0.87
 
Expected dividends
 
 
0%
 
Expected volatility
 
 
89.93%-91.82%
 
Risk free interest rate
 
 
1.67%-1.75%
 
Expected life of option
 
 
4.24-4.29 years
 
 
The Company records stock-based compensation based upon the stated vesting provisions in the related agreements. The vesting provisions for these agreements have various terms as follows:
 
 
immediate vesting;
 
half vesting immediately and remaining over three years;
 
in full on one-year anniversary date of grant date,
 
quarterly over three years;
 
annually over three years;
 
one-third immediate vesting and remaining annually over two years;
 
one half immediate vesting and remaining over nine months;
 
one quarter immediate vesting and remaining over three years;
 
one quarter immediate vesting and remaining over 33 months; and
 
monthly over three years.
 
During the three months ended March 31, 2018, the Company did not grant options to employees. During the same period in 2017, the Company granted 543,927 options to employees having an approximate fair value of $308,000 based upon the Black-Scholes option pricing model.
 
A summary of stock option activities for the three months ended March 31, 2018 is as follows:
 
 
 
Options
 
Weighted Average
Exercise Price
 
 
Weighted Average
Remaining
Contractual Life
 
Aggregate
Intrinsic Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance - December 31, 2017
 
 
12,564,098
 
$
1.55
 
 
4.60 years
 
$
1,800
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expired
 
 
(264,119)
 
$
1.57
 
 
 
 
 
 
 
Forfeited
 
 
(111,464)
 
$
0.78
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance -March 31, 2018 - outstanding
 
 
12,188,515
 
$
1.55
 
 
4.40 years
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance - March 31, 2018 - exercisable
 
 
8,064,487
 
$
1.93
 
 
3.43 years
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grant date fair value of options granted - March 31, 2018
 
 
 
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant date fair value - March 31, 2018
 
 
 
 
$
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Grant date fair value of options granted - December 31, 2017
 
 
 
 
$
1,164,732
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant date fair value - December 31, 2017
 
 
 
 
$
0.37
 
 
 
 
 
 
 
 
Stock-based compensation expense included in operating expenses related to stock options issued to employees and consultants for the three months ended March 31, 2018 and 2017 was $0.7 million and $1.1 million respectively.
 
As of March 31, 2018, total unrecognized stock-based compensation expense related to stock options was $2.1 million, which is expected to be expensed through September 2019.