Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 6 - Stockholders’ Equity |
A. Replacement Registration Statement S-3/A and Prospectus Supplement for the Dividend Reinvestment and Stock Purchase Plan (“DSPP”) |
On March 13, 2014 the Company filed an S-3/A Form that is part of a replacement registration statement that was filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. From time to time, the Company may offer up to an aggregate of approximately $119,850,000 of any combination of the securities described in this prospectus, either individually or in units. |
On March 31, 2014, the Company filed with the SEC the prospectus supplement dated as of March 27, 2014 and accompanying base prospectus dated March 27, 2014 (collectively, the “Prospectus”) relating to the Company’s DSPP. |
The Prospectus forms a part of the Company’s Registration Statement on Form S-3/A (File No. 333-193336), as amended, which was declared effective by the SEC on March 27, 2014 (the “Registration Statement”). |
Under the DSPP, the Company provided (a) shares (each a “Share” and collectively the “Shares”) of common stock, par value $0.01 per share (the “Common Stock”), and (b), through June 30, 2014, units (the “Units”) of the Company’s securities with each unit comprised of (i) one share of Common Stock and (ii) a warrant to purchase an additional share of the Company’s Common Stock at an exercise price of $2.00 per share (each a “Warrant” and collectively the “Warrants”; together with the Shares and the Units the “Securities”). The Securities were provided by the Company in accordance with the terms of the DSPP as described in the Prospectus. |
On May 30, 2014 the Company extended the expiration date for the Unit program under its DSPP to December 31, 2014. Accordingly, the Warrants “ZNWAA” became first exercisable on the 31st day following the Unit Option Termination Date (on February 2, 2015) and continue to be exercisable through January 31, 2020 at a per share exercise price of $2.00. |
The extension was made, in part, to allow interested investors to utilize a new and more convenient electronic enrolment procedure with the TeleCheck Internet Check Acceptance service as a payment method and expanded procedures for foreign participants. |
As of December 31, 2014 the Company and its transfer agents had collected together approximately $3,387,000 and $5,865,000 in the year ended December 31, 2014 and from the DSPP’s inception date in March 2013 to December 31, 2014, respectively. As a result, the Company issued for the year ended December 31, 2014 and from the DSPP inception date to December 31, 2014 a total of 1,661,692 and 2,761,178 shares of its common stock. Issued units and shares for the year ended December 31, 2014 and from the DSPP inception date to December 31, 2014 are comprised of 773,318 and 1,564,293 units (unit comprised of (i) one share of common stock and (ii) a warrant), respectively, and 888,374 and 1,196,885 shares, respectively. |
B. 2005 Stock Option Plan |
In 2005, a stock option plan (the “2005 Plan”) was adopted by the Company, pursuant to which 1,000,000 shares of common stock are reserved for issuance to officers, directors, employees and consultants. The 2005 Plan is administered by the Board of Directors or one or more committees appointed by the board (the “2005 Plan Administrator”). |
The 2005 Plan contemplates the issuance of stock options by the Company both as a private company and as a publicly traded company and is available to residents of the United States, the State of Israel and other jurisdictions as determined by the 2005 Plan Administrator. Awards of stock options under the 2005 Plan are made pursuant to an agreement between the Company and each grantee. The agreement will, among other provisions, specify the number of shares subject to the option, intended tax qualifications, the exercise price, applicable vesting provisions and the term of the stock option grant, all of which are determined on behalf of the Company by the 2005 Plan Administrator. The 2005 Plan remains in effect for a term of ten years unless terminated or extended according to its provisions. |
During the year ended December 31, 2014, the Company granted the following options from the 2005 Plan, to purchase: |
i. 25,000 shares of common stock to one senior officer at an exercise price of $0.01. The options vest in equal quarterly instalments over four consecutive quarters, beginning with the quarter ended March 31, 2014 and are exercisable through March 31, 2024. The fair value of the options at the date of grant amounted to $47,524. |
ii. 20,000 shares of common stock to one senior officer at an exercise price of $0.01. The options vested upon grant and are exercisable through March 31, 2024. The fair value of the options at the date of grant amounted to $38,018. |
iii. 10,000 shares of common stock to one senior officer at an exercise price of $0.01. The options vested upon grant and are exercisable through March 31, 2024. The fair value of the options at the date of grant amounted to $19,009. |
iv. 10,000 shares of common stock to one senior officer at an exercise price of $0.01. The options vest in equal quarterly instalments over four consecutive quarters, beginning with the quarter ended June 30, 2014 and are exercisable through April 1, 2024. The fair value of the options at the date of grant amounted to $19,009. |
v. 45,000 shares of common stock to one senior officer, other staff members and service providers at an exercise price of $0.01. The options vested upon grant and are exercisable through June 11, 2024. The fair value of the options at the date of grant amounted to $93,228. |
vi. 1,693 shares of common stock to one staff member at an exercise price of $1.67. The options vested upon grant and are exercisable through October 1, 2024. The fair value of the options at the date of grant amounted to $1,662. |
vii. 25,000 shares of common stock to one senior officer at an exercise price of $0.01. The options vested upon grant and are exercisable through December 1, 2024. The fair value of the options at the date of grant amounted to $39,019. |
During the year ended December 31, 2013, the Company granted the following options under the 2005 Plan to purchase: |
i. 45,000 shares of common stock to one senior officer, other staff members and service providers at an exercise price of $0.01. The options vested upon grant and are exercisable through June 28, 2023. The fair value of the options at the date of grant amounted to $100,425. |
ii. 197,500 shares of common stock to senior officers, non-employee directors, other staff members and service providers at an exercise price of $0.01. The options vested upon grant and are exercisable through November 11, 2023. The fair value of the options at the date of grant amounted to $304,430. |
C. 2011 Equity Incentive Plan and 2011 Non-Employee Directors Stock Option Plan |
In June 2011, the Company’s shareholders authorized the adoption of the Zion Oil & Gas, Inc. 2011 Equity Incentive Plan for employees and consultants (the “2011 Plan”), initially reserving for issuance thereunder 2,000,000 shares of common stock. |
The 2011 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, bonus stock, awards in lieu of cash obligations, other stock-based awards and performance units. The 2011 plan also permits cash payments under certain conditions. |
The compensation committee of the Board of Directors is responsible for determining the type of award, when and to whom awards are granted, the number of shares and the terms of the awards and exercise prices. The options are exercisable for a period not to exceed ten years from the date of grant. |
During the year ended December 31, 2014, the Company granted the following options under the 2011 Plan to purchase: |
534,000 shares of common stock to senior officers, other staff members, and service providers at an exercise price of $1.67. The options vested upon grant and are exercisable through October 1, 2024. The fair value of the options at the date of grant amounted to $562,660. |
During the year ended December 31, 2013, the Company granted the following options under the 2011 Plan to purchase: |
25,000 shares of common stock were granted to one senior officer at an exercise price of $0.01. The options, granted pursuant to the terms of the officer’ respective employment agreement, vested upon grant and are exercisable through December 31, 2023. The fair value of the options on their respective dates of grant amounted to $35,024. |
In June 2011, the Company’s shareholders authorized the adoption of the Zion Oil & Gas, Inc. 2011 Non‑Employee Directors Stock Option Plan for non-employee directors (the “2011 Directors’ Plan”), initially reserving for issuance thereunder 1,000,000 share of common stock. Under the 2011 Directors’ Plan, only non‑qualified options may be issued, and they will be exercisable for a period of six years from the date of grant. |
The Compensation Committee of the Board of Directors is responsible for determining the type of award, when to grant awards, to whom awards are granted, the number of shares and the terms of the awards and exercise prices. The options are exercisable for a period not to exceed six years from the date of grant. |
During the year ended December 31, 2014, the Company granted the following options from the 2011 Directors’ Plan, to purchase: |
i. 25,000 shares of common stock to one non-employee director at an exercise price of $1.95. The options vested upon grant and are exercisable through April 2, 2020. The fair value of the options at the date of grant amounted to $25,085. |
ii. 390,000 shares of common stock to nine non-employee director at an exercise price of $1.67. The options vested upon grant and are exercisable through October 1, 2020. The fair value of the options at the date of grant amounted to $307,763. |
During the year ended December 31, 2013, the Company granted the following options from the 2011 Directors’ Plan, to purchase: |
i. 25,000 shares of common stock to one non-employee director at an exercise price of $1.73. The options vested upon grant and are exercisable through January 9, 2019. The fair value of the options at the date of grant amounted to $19,099. |
ii. 25,000 shares of common stock to one non-employee director at an exercise price of $2.28. The options vested upon grant and are exercisable through July 10, 2019. The fair value of the options at the date of grant amounted to $27,808. |
iii. 25,000 shares of common stock to one non-employee director at an exercise price of $1.96. The options vested upon grant and are exercisable through September 3, 2019. The fair value of the options at the date of grant amounted to $24,196. |
D. Warrants and Options |
The Company has reserved 4,653,986 shares of common stock as of December 31, 2014 for the exercise of warrants and options to employees and non-employees, of which 3,087,193 are exercisable. These warrants and options could potentially dilute basic earnings per share in future years. The warrants and options exercise prices and expiration dates are as follows: |
|
| | Exercise Price | | | Number of Shares | | | Expiration Date | | | Warrants or Options | | | | | | | | | | | | | |
| | US$ | | | | | | | | | | | | | | | | | | | | | | |
To non-employees | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.01 | | | | 20,000 | | | | 11-Nov-23 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 10,000 | | | | 11-Jun-24 | | | | Options | | | | | | | | | | | | | |
| | | 1.67 | | | | 115,000 | | | | 1-Oct-24 | | | | Options | | | | | | | | | | | | | |
| | | 1.7 | | | | 130,000 | | | | 20-Dec-22 | | | | Options | | | | | | | | | | | | | |
| | | 2.61 | | | | 77,000 | | | | 4-Dec-22 | | | | Options | | | | | | | | | | | | | |
To employees and directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.01 | | | | 20,000 | | | | 31-Jan-20 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 5,000 | | | | 28-Jun-23 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 51,000 | | | | 11-Nov-23 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 25,000 | | | | 31-Dec-23 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 50,000 | | | | 31-Mar-24 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 10,000 | | | | 11-Jun-24 | | | | Options | | | | | | | | | | | | | |
| | | 0.01 | | | | 25,000 | | | | 1-Dec-24 | | | | Options | | | | | | | | | | | | | |
| | | 1.67 | | | | 390,000 | | | | 1-Oct-20 | | | | Options | | | | | | | | | | | | | |
| | | 1.67 | | | | 420,693 | | | | 1-Oct-24 | | | | Options | | | | | | | | | | | | | |
| | | 1.7 | | | | 137,500 | | | | 21-Dec-18 | | | | Options | | | | | | | | | | | | | |
| | | 1.7 | | | | 239,500 | | | | 20-Dec-22 | | | | Options | | | | | | | | | | | | | |
| | | 1.73 | | | | 25,000 | | | | 9-Jan-19 | | | | Options | | | | | | | | | | | | | |
| | | 1.82 | | | | 25,000 | | | | 13-Jun-17 | | | | Options | | | | | | | | | | | | | |
| | | 1.86 | | | | 25,000 | | | | 3-Dec-18 | | | | Options | | | | | | | | | | | | | |
| | | 1.95 | | | | 25,000 | | | | April 02,2020 | | | | Options | | | | | | | | | | | | | |
| | | 1.96 | | | | 25,000 | | | | 3-Sep-19 | | | | Options | | | | | | | | | | | | | |
| | | 2.28 | | | | 25,000 | | | | 10-Jul-19 | | | | Options | | | | | | | | | | | | | |
| | | 2.61 | | | | 237,500 | | | | 4-Dec-17 | | | | Options | | | | | | | | | | | | | |
| | | 2.61 | | | | 939,500 | | | | 4-Dec-21 | | | | Options | | | | | | | | | | | | | |
| | | 4.45 | | | | 25,000 | | | | 26-Jan-16 | | | | Options | | | | | | | | | | | | | |
| | | 4.55 | | | | 15,000 | | | | 31-Jan-16 | | | | Options | | | | | | | | | | | | | |
To investors | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2 | | | | 1,564,293 | | | | 31-Jan-20 | | | | Warrants | | | | | | | | | | | | | |
| | | 1.99 | * | | | 4,653,986 | | | | | | | | | | | | | | | | | | | | | |
___________________ |
* Weighted Average |
The stock option transactions since January 1, 2013 are shown in the table below: |
| | Number of | | | Weighted Average | | | | | | | | | | | | | | | | | | | | | |
shares | exercise price | | | | | | | | | | | | | | | | | | | | |
| | | | | US$ | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Outstanding, December 31, 2012 | | | 2,392,000 | | | | 2.41 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Changes during 2013 to: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Granted to employees, officers, directors and others | | | 342,500 | | | | 0.44 | | | | | | | | | | | | | | | | | | | | | |
Expired/Cancelled/Forfeited | | | (197,750 | ) | | | 2.71 | | | | | | | | | | | | | | | | | | | | | |
Exercised | | | (137,500 | ) | | | 0.01 | | | | | | | | | | | | | | | | | | | | | |
Outstanding, December 31, 2013 | | | 2,399,250 | | | | 2.24 | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Changes during 2014 to: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Granted to employees, officers, directors and others | | | 1,085,693 | | | | 1.47 | | | | | | | | | | | | | | | | | | | | | |
Expired/Cancelled/Forfeited | | | (308,250 | ) | | | 2.67 | | | | | | | | | | | | | | | | | | | | | |
Exercised | | | (87,000 | ) | | | 0.01 | | | | | | | | | | | | | | | | | | | | | |
Outstanding, December 31, 2014 | | | 3,089,693 | | | | 1.99 | | | | | | | | | | | | | | | | | | | | | |
Exercisable, December 31, 2014 | | | 3,087,193 | | | | 1.99 | | | | | | | | | | | | | | | | | | | | | |
The aggregate intrinsic value of options exercised during 2014 and 2013 was approximately $170,000 and $224,000 respectively. |
The aggregate intrinsic value of the outstanding options and warrants as of December 31, 2014 totalling 4,653,986 was approximately $290,000. |
The following table summarizes information about stock options outstanding as of December 31, 2014: |
Shares underlying outstanding options (non-vested) | | | Shares underlying outstanding options (fully vested) | |
Range of exercise price | | Number outstanding | | | Weighted average remaining contractual life (years) | | | Weighted Average Exercise price | | | Range of exercise price | | | Number Outstanding | | | Weighted average remaining contractual life (years) | | | Weighted Average Exercise price | |
US$ | | | | | | | | US$ | | | US$ | | | | | | | | | US$ | |
0.01 | | | 2,500 | | | | 9.24 | | | | 0.01 | | | | 0.01 | | | | 25,000 | | | | 9.93 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 0.01 | | | | 20,000 | | | | 9.45 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 0.01 | | | | 47,500 | | | | 9.24 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 0.01 | | | | 25,000 | | | | 9 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 0.01 | | | | 71,000 | | | | 8.87 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 0.01 | | | | 2,000 | | | | 8.5 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 0.01 | | | | 20,000 | | | | 5.09 | | | | 0.01 | |
— | | | — | | | | — | | | | — | | | | 1.67 | | | | 390,000 | | | | 5.76 | | | | 1.67 | |
— | | | — | | | | — | | | | — | | | | 1.67 | | | | 535,693 | | | | 9.76 | | | | 1.67 | |
— | | | — | | | | — | | | | — | | | | 1.7 | | | | 369,500 | | | | 7.98 | | | | 1.7 | |
— | | | — | | | | — | | | | — | | | | 1.7 | | | | 137,500 | | | | 3.98 | | | | 1.7 | |
— | | | — | | | | — | | | | — | | | | 1.73 | | | | 25,000 | | | | 4.03 | | | | 1.73 | |
— | | | — | | | | — | | | | — | | | | 1.82 | | | | 25,000 | | | | 2.45 | | | | 1.82 | |
— | | | — | | | | — | | | | — | | | | 1.86 | | | | 25,000 | | | | 3.93 | | | | 1.86 | |
|
Shares underlying outstanding options (non-vested) | | | Shares underlying outstanding options (fully vested) | |
Range of exercise price | | Number outstanding | | | Weighted average remaining contractual life (years) | | | Weighted Average Exercise price | | | Range of exercise price | | | Number Outstanding | | | Weighted average remaining contractual life (years) | | | Weighted Average Exercise price | |
US$ | | | | | | | | US$ | | | US$ | | | | | | | | | US$ | |
— | | | — | | | | — | | | | — | | | | 1.95 | | | | 25,000 | | | | 5.26 | | | | 1.95 | |
— | | | — | | | | — | | | | — | | | | 1.96 | | | | 25,000 | | | | 4.68 | | | | 1.96 | |
— | | | — | | | | — | | | | — | | | | 2.28 | | | | 25,000 | | | | 4.53 | | | | 2.28 | |
— | | | — | | | | — | | | | — | | | | 2.61 | | | | 237,500 | | | | 2.93 | | | | 2.61 | |
— | | | — | | | | — | | | | — | | | | 2.61 | | | | 1,016,500 | | | | 6.93 | | | | 2.61 | |
— | | | — | | | | — | | | | — | | | | 4.45 | | | | 25,000 | | | | 1.07 | | | | 4.45 | |
— | | | — | | | | — | | | | — | | | | 4.55 | | | | 15,000 | | | | 1.08 | | | | 4.55 | |
0.01 | | | 2,500 | | | | | | | | 0.01 | | | | 0.01—4.55 | | | | 3,087,193 | | | | | | | | 1.99 | |
Granted to employees |
The following table sets forth information about the weighted-average fair value of options granted to employees and directors during the year, using the Black Scholes option-pricing model and the weighted-average assumptions used for such grants: |
| | For the year ended December 31, | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | |
Weighted-average fair value of underlying stock at grant date | | $ | 1.7 | | | $ | 1.78 | | | | | | | | | | | | | | | | | | | | | |
Dividend yields | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Expected volatility | | | 70%-82% | | | | 67%-82% | | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rates | | | 0.94%-1.74% | | | | 0.37%-1.75% | | | | | | | | | | | | | | | | | | | | | |
Expected lives (in years) | | | 3.00-5.50 | | | | 3.00-5.00 | | | | | | | | | | | | | | | | | | | | | |
Weighted-average grant date fair value | | $ | 1.01 | | | $ | 1.43 | | | | | | | | | | | | | | | | | | | | | |
Granted to non-employees |
The following table sets forth information about the weighted-average fair value of options granted to non‑employees during the year, using the Black Scholes option-pricing model and the weighted-average assumptions used for such grants: |
| | For the year ended December 31, | | | | | | | | | | | | | | | | | | | | | |
| | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | |
Weighted-average fair value of underlying stock at grant date | | $ | 1.73 | | | $ | 1.73 | | | | | | | | | | | | | | | | | | | | | |
Dividend yields | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | |
Expected volatility | | | 75% | | | | 75%-76% | | | | | | | | | | | | | | | | | | | | | |
Risk-free interest rates | | | 2.42%-2.65% | | | | 2.52%-2.77% | | | | | | | | | | | | | | | | | | | | | |
Expected lives (in years) | | | 10 | | | | 10 | | | | | | | | | | | | | | | | | | | | | |
Weighted-average grant date fair value | | $ | 1.43 | | | $ | 1.73 | | | | | | | | | | | | | | | | | | | | | |
The risk-free interest 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 options. |
The expected life represents the weighted average period of time that options granted are expected to be outstanding. The expected life of the options granted to employees and directors is calculated based on the Simplified Method as allowed under Staff Accounting Bulletin No. 110 (“SAB 110”), giving consideration to the contractual term of the options and their vesting schedules, as the Company does not have sufficient historical exercise data at this time. The expected life of the option granted to non-employees equals their contractual term. In the case of an extension of the option life, the calculation was made on the basis of the extended life. |
E. Compensation Cost for Warrant and Option Issuances |
The following table sets forth information about the compensation cost of warrant and option issuances recognized for employees and directors: |
For the year ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | |
2014 | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
US$ | | US$ | | | | | | | | | | | | | | | | | | | | | | | | | |
1,000,000 | | | 773,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
The following table sets forth information about the compensation cost of warrant and option issuances recognized for non-employees: |
For the year ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | |
2014 | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | | |
US$ | | US$ | | | | | | | | | | | | | | | | | | | | | | | | | |
221,000 | | | 246,000 | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
As of December 31, 2014, there was $1,000 of unrecognized compensation cost, related to non-vested stock options granted under the Company’s 2005 Stock Option Plan. That cost is expected to be recognized during 2015. |
F. Warrant Descriptions |
The price and the expiration dates for the series of warrants to investors are as follows: |
| | Period of Grant | | | US$ | | | Expiration Date | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
ZNWAA Warrants | | | March 2013 – December 2014 | | | | 2 | | | | January 31, 2020 | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |