Quarterly report pursuant to Section 13 or 15(d)

Employee Stock Options

v3.4.0.3
Employee Stock Options
3 Months Ended
Mar. 31, 2016
Employee Stock Options [Abstract]  
EMPLOYEE STOCK OPTIONS
8. EMPLOYEE STOCK OPTIONS

 

On October 29, 2015 a 1:40 reverse split of the Company stock occurred and the effect has been applied retroactively for disclosure purposes.

During 2015, the Company granted 842,500 common stock options to employees and a director for service provided. Of these, 250,000 options were immediately vested and were granted with an exercise price of $6.00 and the expiration date is May 18, 2018. Another 105,000 options were immediately vested and were granted with an exercise price of $5.00 and the expiration date of December 10, 2018. Another 250,000 options vest over two years or upon the up listing of the Company’s common stock and were granted with an exercise price of $6.00 and the expiration date is June 1, 2018. These 250,000 options were surrendered and cancelled on September 4, 2015. A director received two options. The first was for 75,000 shares vesting over two years and was granted with an exercise price of $10.00 and the expiration date is June 1, 2018. The second was for 125,000 shares with vesting tied to performance and was granted with an exercise price of $10.00 and the expiration date is June 1, 2018. These two director options were surrendered and cancelled on September 4, 2015. Stock based compensation was reversed for costs previously recognized on the total 450,000 surrendered and cancelled unvested options. Another option for 37,500 shares vesting over three years was granted with an exercise price of $10.80 and the expiration date is May 4, 2019.

The Company used the Black-Scholes option pricing model to estimate the fair value on the date of grant of the 37,500 stock-based awards that continue to vest during the three months ended March 31, 2016.

The following table summarizes the assumptions used to estimate the fair value of the 37,500 stock options granted during 2015 on the date of grant:

 

    2015
     
Expected dividend yield     0 %
Expected volatility     129 %
Risk-free interest rate     0.79 – 1.05%  
Expected life of options     2.43 – 3.43 years  

Under the Black-Scholes option price model, fair value of the options granted is estimated at $293,954 on the date of grant. During the three months ended March 31, 2016, $43,952 compensation expense was recognized.

The following table represents stock option activity as of and for the period ended March 31, 2016:

     

Number of Options

Weighted

Average

Exercise Price

Contractual Life in Years

Intrinsic

Value

 Outstanding – December 31, 2015     392,500     $ 6.19     $ 2.62          
 Exercisable – December 31, 2015     355,000     $ 5.70     $ 2.55     $ 0.00  
 Granted         $ 0.00                  
 Exercised or Vested         $ 0.00                  
 Cancelled or Expired         $ 0.00                  
 Outstanding – March 31, 2016     392,500     $ 6.19       2.37          
 Exercisable – March 31, 2016     355,000     $ 5.70       2.30     $ 0.00