|6 Months Ended|
Jun. 30, 2016
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
We have two equity incentive plans: the 2008 Stock Option Plan (the “2008 Plan”) and the 2011 Equity Incentive Plan (the “2011 Plan”, and together with the 2008 Plan, the “Stock Option Plans”). The Stock Option Plans are meant to provide additional incentive to officers, employees and consultants to remain in our employment. Options granted are generally exercisable for up to 10 years.
At June 30, 2016, 921,276 shares remain available for future awards under the 2011 Plan and 112,055 shares remain available for future awards under the 2008 Plan. As of June 30, 2016, no stock appreciation rights and 275,500 shares of restricted stock have been awarded under the Stock Option Plans.
A summary of employee and non-employee stock option activity for the six months ended June 30, 2016 is as follows:
On July 19, 2016, the Company granted employees incentive stock options to purchase 181,800 shares of the Company’s common stock at an exercise price of $2.02 per share with vesting over a period of 2.5 to 5 years.
Aggregate intrinsic value represents the difference between the estimated fair value of our common stock and the exercise price of outstanding, in-the-money options.
As of June 30, 2016, total unrecognized compensation cost related to non-vested stock options granted to employees was $3,639,078 which we expect to recognize over the next 2.61 years.
As of June 30, 2016, total unrecognized compensation cost related to non-vested stock options granted to non-employees was $57,000 which we expect to recognize over the next 1.51 years. The estimate of unrecognized non-employee compensation is based on the fair value of the non-vested options as of June 30, 2016.
The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model requires us to make assumptions and judgments about the variables used in the calculation, including the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on an average of the historical volatilities of the common stock of three entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to be zero due to the small number of plan participants and the plan design which has monthly vesting after an initial cliff vesting period.
The following table presents the weighted-average assumptions used to estimate the fair value of options granted to employees during the periods presented:
In May 2014, we issued 200,000 options to our Director, Raju Chaganti, with an exercise price of $15.89. See Note 11 for additional information. The following table presents the weighted-average assumptions used to estimate the fair value of options reaching their measurement date for non-employees during the periods presented:
Restricted stock awards have been granted to employees, directors and consultants as compensation for services. At June 30, 2016, there was $543,734 of unrecognized compensation cost related to non-vested restricted stock granted to employees; we expect to recognize the cost over 2.12 years.
The following table summarizes the activities for our non-vested restricted stock awards for the six months ended June 30, 2016:
The following table presents the effects of stock-based compensation related to stock option and restricted stock awards to employees and non-employees on our Statement of Operations during the periods presented (in thousands):
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef