| Stockholders' Equity | Note 6 - Stockholders’ Equity A.
2011 Equity Incentive 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 10 years from the date of grant. In
June 2015, the Company’s stockholders approved an increase in the number of shares of Common Stock available under the 2011
Equity Incentive Plan for employees and consultants reserving for issuance thereunder an additional four million shares of Common
Stock for a total of six million shares of Common Stock available thereunder. In
June 2017, the Company’s stockholders approved an increase in the number of shares of Common Stock available under the 2011
Plan for employees and consultants reserving for issuance thereunder an additional 10 million shares of Common Stock for a total
of 16 million shares of Common Stock available thereunder. During
the year ended December 31, 2019, the Company granted the following non-qualified options from the 2011 Plan for employees, directors
and consultants, to purchase as non-cash compensation (taxable on the date of exercise):
i. Options to purchase
25,000 shares of Common Stock to one senior officer at an exercise price of $0.01 per share. The options vested upon grant
and are exercisable through January 6, 2029. The fair value of the options at the date of grant amounted to approximately
$10,000.
ii. Options to purchase
100,000 shares of Common Stock were granted to one senior officer at an exercise price of $0.01 per share. The options are
exercisable through May 1, 2029. However, the vesting and exercisability of these options is subject to the following schedule:
(a) 50,000 options vest on September 1, 2019 and (b) the remaining 50,000 options vest on January 1, 2020. The fair value
of the options at the date of grant amounted to $55,000.
iii. Options
to purchase 100,000 shares of Common Stock were granted to one senior officer at an exercise price of $0.01 per share.
The options vested upon grant and are exercisable through July 1, 2029. The fair value of the options at the date of grant
amounted to approximately $35,000.
iv. Options to purchase
10,000 shares of Common Stock were granted to one staff member at an exercise price of $0.01 per share. The options vested
upon grant and are exercisable through September 1, 2029. The fair value of the options at the date of grant amounted to approximately
$3,000.
v. Options
to purchase 25,000 shares of Common Stock were granted to one senior officer at an exercise price of $0.28 per share.
The options vested upon grant and are exercisable through September 3, 2029. The fair value of the options at the date
of grant amounted to approximately $7,000.
vi. Options
to purchase 215,000 shares of Common Stock were granted to 10 staff members and consultants at an exercise price of $0.01
per share. The options vested upon grant and are exercisable through September 18, 2029. The fair value of the options
at the date of grant amounted to approximately $65,000.
vii. Options
to purchase 510,000 shares of Common Stock were granted to 19 senior officers, staff members and consultants at an exercise
price of $0.01 per share. The options vested upon grant and are exercisable through November 18, 2029. The fair value
of the options at the date of grant amounted to approximately $73,000.
viii. Options to purchase
150,000 shares of Common Stock were granted to one senior officer and one consultant at an exercise price of $0.16 per share.
The options vested upon grant and are exercisable through December 10, 2029. The fair value of the options at the date of
grant amounted to approximately $18,000. During
the year ended December 31, 2018, the Company granted the following non-qualified options from the 2011 Plan for employees, directors
and consultants, to purchase as non-cash compensation (taxable on the date of exercise):
i. Options to purchase
330,000 shares of Common Stock to 23 senior officers, staff members and consultants at an exercise price of $.01 per share.
The options have vesting schedules of 165,000 shares on June 30, 2018 and 165,000 shares on December 31, 2018. The options
are exercisable through January 1, 2028. The fair value of the options at the date of grant amounted to approximately $759,000.
ii. Options to purchase
110,000 shares of Common Stock to five senior officers at an exercise price of $0.01 per share. The options vested upon grant
and are exercisable through January 4, 2028. The fair value of the options at the date of grant amounted to approximately
$250,000.
iii. Options to purchase
55,000 shares of Common Stock to three consultants at an exercise price of $0.01 per share. The options are exercisable through
March 1, 2028. However, the vesting and exercisability of these options is subject to the following schedule: (a) 27,500 options
vest on June 30, 2018 and (b) the remaining 27,500 options vest on June 30, 2019. The fair value of the options at the
date of grant amounted to $222,000.
iv. Options to purchase
14,000 shares of Common Stock to seven staff members at an exercise price of $0.01 per share. The options vested upon grant
and are exercisable through April 5, 2028. The fair value of the options at the date of grant amounted to approximately $62,000.
v. Options to purchase
10,000 shares of Common Stock to one staff member at an exercise price of $0.01 per share. The options vested upon grant and
are exercisable through September 1, 2028. The fair value of the options at the date of grant amounted to approximately $18,000. B.
2011 Non-Employee Directors Stock Option Plan 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 shares 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. In
June 2015, the Company’s stockholders approved an increase in the number of shares of Common Stock available under the 2011
Directors Plan, reserving for issuance thereunder an additional two million shares of Common Stock for a total of three million
shares of Common Stock available thereunder. In
June 2017, the Company’s stockholders approved an increase in the number of shares of Common Stock available under the 2011
Directors Plan, reserving for issuance thereunder an additional four million shares of Common Stock for a total of seven million
shares of Common Stock available thereunder. During
the year ended December 31, 2019, the Company granted the following options from the 2011 Directors Plan, to purchase as non-cash
compensation (taxable on the date of exercise):
i. Options
to purchase 25,000 shares of Common Stock to one board member at an exercise price of $0.28 per share. The options vested
upon grant and are exercisable through September 3, 2025. The fair value of the options at the date of grant amounted
to approximately $7,000.
ii. Options
to purchase 25,000 shares of Common Stock to one board member at an exercise price of $0.18 per share. The options vested
upon grant and are exercisable through December 2, 2025. The fair value of the options at the date of grant amounted to
approximately $3,000.
iii. Options to purchase
340,000 shares of Common Stock to four board members at an exercise price of $0.16 per share. The options vested upon grant
and are exercisable through December 10, 2025. The fair value of the options at the date of grant amounted to approximately
$37,000. During
the year ended December 31, 2018, the Company granted the following qualified (market value) options from the 2011 Non-Employee
Directors Stock Option Plan for directors to purchase as non-cash compensation:
i. Options to purchase
400,000 shares of Common Stock to eight board members at an exercise price of $2.31 per share. The options vested upon grant
and are exercisable through January 1, 2024. The fair value of the options at the date of grant amounted to approximately
$428,000.
ii. Options to purchase
25,000 shares of Common Stock to one board member at an exercise price of $4.15 per share. The options vested upon grant and
are exercisable through July 2, 2024. The fair value of the options at the date of grant amounted to approximately $55,000.
iii. Options to purchase
25,000 shares of Common Stock to one board member at an exercise price of $1.78 per share. The options vested upon grant and
are exercisable through September 4, 2024. The fair value of the options at the date of grant amounted to approximately $25,000. C.
Warrants and Options The
Company has reserved 12,217,320 shares of common stock as of December 31, 2019, for the exercise of warrants and options
to employees and non-employees, of which 12,167,320 are exercisable. These warrants and options could potentially dilute basic
earnings per share in future years. The warrants and options exercise prices and expiration dates are as follows:
Exercise Number
of Expiration Warrants
or
US$
To non-employees
0.01 10,000 October 01, 2027 Options
0.01 7,500 January 01, 2028 Options
0.01 30,000 February 28,
2028 Options
0.01 85,000 November 18,
2029 Options
0.16 75,000 December 10,
2029 Options
1.67 105,000 October 01, 2024 Options
1.70 115,000 December 20,
2022 Options
2.61 77,000 December 04,
2021 Options
To employees and directors
0.01 10,000 November 11,
2023 Options
0.01 15,000 March 31, 2024 Options
0.01 5,000 June 11, 2024 Options
0.01 25,000 December 31,
2025 Options
0.01 110,000 June 05, 2026 Options
0.01 25,000 December 31,
2026 Options
0.01 280,000 January 01, 2027 Options
0.01 60,000 April 17, 2027 Options
0.01 30,000 October 01, 2027 Options
0.01 97,500 January 01, 2028 Options
0.01 75,000 January 04, 2028 Options
0.01 6,000 April 06, 2028 Options
0.01 25,000 January 6, 2029 Options
0.01 50,000 May 01, 2029 Options
0.01 95,000 July 01, 2029 Options
0.01 10,000 September 01,
2029 Options
0.01 205,000 September 18,
2029 Options
0.01 375,000 November 01,
2029 Options
0.16 340,000 December 10,
2025 Options
0.16 75,000 December 10,
2029 Options
0.18 25,000 December 02,
2025 Options
0.28 25,000 September 03,
2025 Options
0.28 25,000 September 03,
2029 Options
1.33 25,000 May 01, 2023 Options
1.38 108,000 January 02, 2021 Options
1.38 105,307 January 02, 2025 Options
1.55 400,000 June 05, 2022 Options
1.67 340,000 October 01, 2020 Options
1.67 300,943 October 01, 2024 Options
1.70 103,500 December 20,
2022 Options
1.75 400,000 June 07, 2023 Options
1.78 25,000 September 04,
2024 Options
1.87 25,000 January 31, 2022 Options
1.95 25,000 April 02, 2020 Options
2.03 25,000 May 01, 2021 Options
2.31 400,000 January 01, 2024 Options
2.61 394,500 December 04,
2021 Options
4.15 25,000 July 02, 2024 Options
To investors
0.01 457,725 February 25,
2021 Warrants
1.00 243,853 May 02, 2021 Warrants
1.00 546,000 October 29, 2021 Warrants
1.00 2,144,470 March 03, 2021 Warrants
1.00 359,585 August 14, 2021 Warrants
1.00 240,578 January 08, 2021 Warrants
2.00 1,498,804 January 31, 2021 Warrants
2.00 517,925 August 25, 2021 Warrants
3.00 640,730 June 29, 2021 Warrants
5.00 372,400 April 19, 2021 Warrants
Total outstanding 1.41 * 12,217,320
* Weighted
Average The
stock option transactions since January 1, 2018 are shown in the table below:
Number
of shares Weighted
Average exercise
price
US$
Outstanding,
December 31, 2017 4,339,443 1.37
Changes
during 2018 to:
Granted
to employees, officers, directors and others 969,000 1.11
Expired/Cancelled/Forfeited (237,500 ) 1.75
Exercised (282,500 ) 0.07
Outstanding,
December 31, 2018 4,788,443 1.37
Changes
during 2019 to:
Granted
to employees, officers, directors and others* 1,525,000 0.06
Expired/Cancelled/Forfeited (410,693 ) 2.06
Exercised (707,500 ) 0.01
Outstanding,
December 31, 2019 5.195,250 1.12
Exercisable,
December 31, 2019 5,145,250 1.13
* The
receipt of a stock option grant by the grantee recipient is a non-taxable event according
to the Internal Revenue Service. The grantee who later chooses to exercise penny stock
options must recognize the market value in income in the year of exercise. The
aggregate intrinsic value of options exercised during 2019, and 2018 was approximately $155,000, and $692,000 respectively. The
aggregate intrinsic value of the outstanding options and warrants as of December 31, 2019, totalling 12,217,320 was approximately
$339,000. The
aggregate intrinsic value of the outstanding options and warrants as of December 31, 2018, totalling 10,835,333 was approximately
$561,000. The
following table summarizes information about stock options outstanding as of December 31, 2019:
Shares
underlying outstanding options (non-vested) Shares
underlying outstanding options (fully vested)
Range
of Number
outstanding Weighted
average remaining contractual life (years) Weighted Range
of exercise Number Weighted average
remaining contractual life (years) Weighted
US$ US$ US$ US$
— — — — 0.01 10,000 3.87 0.01
— — — — 0.01 15,000 4.25 0.01
— — — — 0.01 5,000 4.45 0.01
— — — — 0.01 25,000 6.00 0.01
— — — — 0.01 110,000 6.42 0.01
— — — — 0.01 25,000 7.00 0.01
— — — — 0.01 280,000 7.00 0.01
— — — — 0.01 60,000 7.29 0.01
— — — — 0.01 40,000 7.75 0.01
— — — — 0.01 105,000 8.00 0.01
— — — — 0.01 75,000 8.01 0.01
— — — — 0.01 30,000 8.16 0.01
— — — — 0.01 6,000 8.26 0.01
— — — — 0.01 25,000 9.01 0.01
0.01 50,000 9.58 0.01 — — — —
— — — — 0.01 95,000 9.50 0.01
— — — — 0.01 10,000 9.67 0.01
— — — — 0.01 205,000 9.71 0.01
— — — — 0.01 460,000 9.88 0.01
— — — — 0.16 340,000 5.94 0.16
— — — — 0.16 150,000 9.94 0.16
— — — — 0.18 25,000 5.92 0.18
— — — — 0.28 25,000 5.67 0.28
— — — — 0.28 25,000 9.67 0.28
— — — — 1.33 25,000 3.32 1.33
— — — — 1.38 108,000 1.01 1.38
— — — — 1.38 105,307 5.01 1.38
— — — — 1.55 400,000 2.43 1.55
— — — — 1.67 340,000 0.75 1.67
— — — — 1.67 405,943 4.76 1.67
— — — — 1.70 218,500 2.97 1.70
— — — — 1.75 400,000 3.52 1.75
— — — — 1.78 25,000 4.68 1.78
— — — — 1.87 25,000 2.09 1.87
— — — — 1.95 25,000 0.25 1.95
— — — — 2.03 25,000 1.33 2.03
— — — — 2.31 400,000 4.01 2.31
2.61 471,500 1.93 2.61
— — — — 4.15 25,000 4.51 4.15
0.01 50,000 0.01 0.01-4.15 5,145,250 1.13 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
2019 2018
Weighted-average
fair value of underlying stock at grant date $ 0.24 $ 2.38
Dividend
yields — —
Expected
volatility 87%-113% 68%-87%
Risk-free
interest rates 1.35%-2.53% 2.01%-2.74%
Expected
life (in years) 3.00-5.34 3.00-5.50
Weighted-average
grant date fair value $ 0.21 $ 1.72 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
2019 2018
Weighted-average
fair value of underlying stock at grant date $ 0.16 $ 3.37
Dividend
yields — —
Expected
volatility 81%-82% 73%-76%
Risk-free
interest rates 1.80%-1.85% 2.46%-2.81%
Expected
life (in years) 10.00 10.00
Weighted-average
grant date fair value $ 0.15 $ 3.36 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. D.
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,
2019 2018
US$
thousands US$
thousands
286 1,553 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,
2019 2018
US$
thousands US$
thousands
33 302 The
following table sets forth information about the compensation cost of option issuances recognized and capitalized to Unproved
Oil & Gas properties:
For
the year ended December 31,
2019 2018
US$
thousands US$
thousands
3 348 As
of December 31, 2019, there was less than $1,000 of unrecognized compensation cost, related to non-vested stock options granted
under the Company’s various stock option plans. The cost is expected to be recognized during the year 2020. E.
Dividend Reinvestment and Stock Purchase Plan (“DSPP”) On
March 27, 2014, we launched our Dividend Reinvestment and Stock Purchase Plan (the “DSPP”) pursuant to which stockholders
and interested investors can purchase shares of the Company’s Common Stock as well as units of the Company’s securities
directly from the Company. The terms of the DSPP are described in the Prospectus Supplement originally filed on March 31, 2014
(the “Original Prospectus Supplement”) with the Securities and Exchange Commission (“SEC”) under the Company’s
effective registration Statement on Form S-3, as thereafter amended. On
January 13, 2015, the Company amended the Original Prospectus Supplement (“Amendment No. 3”) to provide for a unit
option (the “Unit Option”) under the DSPP comprised of one share of Common Stock and three Common Stock purchase warrants
with each unit priced at $4.00. Each warrant afforded the participant the opportunity to purchase the Company’s Common Stock
at a warrant exercise price of $1.00. Each of the three warrants series has different expiration dates that have been extended. The
warrants first became exercisable on May 2, 2016 and, in the case of ZNWAC on May 2, 2017 and in the case of ZNWAD on May 2, 2018,
at a per share exercise price of $1.00. As
of May 2, 2017, any outstanding ZNWAB warrants expired. As
of May 2, 2018, any outstanding ZNWAC warrants expired. On
May 29, 2019, the Company extended the termination date of the ZNWAD Warrant by one (1) year from the expiration date of May 2,
2020 to May 2, 2021. Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value assigned
to this extension. On
November 1, 2016, the Company launched a unit offering (the “Unit Program”) under the Company’s DSPP pursuant
to which participants could purchase units comprised of seven shares of Common Stock and seven Common Stock purchase warrants,
at a per unit purchase price of $10. The warrant is referred to as “ZNWAE.” The
ZNWAE warrants became exercisable on May 1, 2017 and continue to be exercisable through May 1, 2020 at a per share exercise price
of $1.00. On
May 29, 2019, the Company extended the termination date of the ZNWAE Warrant by one (1) year from the expiration date of May 1,
2020 to May 1, 2021. Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value assigned
to this extension. The
warrant terms provide that if the Company’s Common Stock trades above $5.00 per share at the closing price for 15 consecutive
trading days at any time prior to the expiration date of the warrant, the Company may, in its sole discretion, accelerate the
termination of the warrant upon providing 60 days advanced notice to the warrant holders. On
February 23, 2017, the Company filed a Form S-3 with the SEC (Registration No. 333-216191) as a replacement for the Form S-3 (Registration
No. 333-193336), for which the three year period ended March 31, 2017, along with the base Prospectus and Supplemental Prospectus.
The Form S-3, as amended, and the new base Prospectus became effective on March 10, 2017, along with the Prospectus Supplement
that was filed and became effective on March 10, 2017. The Prospectus Supplement under Registration No. 333-216191 describes the
terms of the DSPP and replaces the prior Prospectus Supplement, as amended, under the prior Registration No. 333-193336. On
May 22, 2017, the Company launched a new unit offering (the “New Unit Program”). The New Unit Program consisted of
a new combination of common stock and warrants, a new time period in which to purchase under the program, and a new unit price,
but otherwise the same unit program features, conditions and terms in the Prospectus Supplement applied. The New Unit Program
terminated on July 12, 2017. This New Unit Program enabled participants to purchase Units of the Company’s securities where
each Unit (priced at $250.00 each) was comprised of (i) the number of shares of Common Stock determined by dividing $250.00 (the
price of one Unit) by the average of the high and low sale prices of the Company’s Common Stock as reported on the NASDAQ
on the unit purchase date and (ii) Common Stock purchase warrants to purchase an additional 25 shares of Common Stock at a warrant
exercise price of $1.00 per share. The warrant is referred to as “ZNWAF.” All
ZNWAF warrants became exercisable on August 14, 2017 and continue to be exercisable through August 14, 2020 at a per share exercise
price of $1.00. On
May 29, 2019, the Company extended the termination date of the ZNWAF Warrant by one (1) year from the expiration date of August
14, 2020 to August 14, 2021. Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value assigned
to this extension. The
warrant terms provide that if the Company’s Common Stock trades above $5.00 per share as the closing price for 15 consecutive
trading days at any time prior to the expiration date of the warrant, the Company has the sole discretion to accelerate the termination
date of the warrant upon providing 60 days advanced notice to the warrant holders. An
Amendment No. 2 to the Prospectus Supplement (as described below) was filed on October 12, 2017. Under
Amendment No. 2, the Company initiated another Unit Option Program which terminated on December 6, 2017. This Unit Option Program
enabled participants to purchase Units of the Company’s securities where each Unit (priced at $250.00 each) was comprised
of (i) a certain number of shares of Common Stock determined by dividing $250.00 (the price of one Unit) by the average of the
high and low sale prices of the Company’s Common Stock as reported on the NASDAQ on the unit purchase date and (ii) Common
Stock purchase warrants to purchase an additional 15 shares of Common Stock at a warrant exercise price of $1.00 per share. The
warrant is referred to as “ZNWAG.” The
warrants became exercisable on January 8, 2018 and continue to be exercisable through January 8, 2021 at a per share exercise
price of $1.00. The warrant terms provide that if the Company’s Common Stock trades above $5.00 per share as the closing
price for 15 consecutive trading days at any time prior to the expiration date of the warrant, the Company has the sole discretion
to accelerate the termination date of the warrant upon providing 60 days advanced notice to the warrant holders. On
February 1, 2018, the Company launched another Unit Option Program which terminated on February 28, 2018. The Unit Option consisted
of Units of our securities where each Unit (priced at $250.00 each) was comprised of (i) 50 shares of Common Stock and (ii) Common
Stock purchase warrants to purchase an additional 50 shares of Common Stock. The investor’s Plan account was credited with
the number of shares of the Company’s Common Stock acquired under the Units purchased. Each warrant affords the investor
the opportunity to purchase one share of Company Common Stock at a warrant exercise price of $5.00. The warrant is referred to
as “ZNWAH.” The
warrants became exercisable on April 2, 2018 and continue to be exercisable through April 2, 2020 at a per share exercise price
of $5.00, after the Company, on December 4, 2018, extended the termination date of the Warrant by one (1) year from the expiration
date of April 2, 2019 to April 2, 2020. On
May 29, 2019, the Company extended the termination date of the ZNWAH Warrant by one (1) year from the expiration date of April
2, 2020 to April 2, 2021. Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value assigned
to this extension. On
August 21, 2018, the Company initiated another Unit Option Program, and it terminated on September 26, 2018. The Unit Option Program
consisted of Units of the Company’s securities where each Unit (priced at $250.00 each) was comprised of (i) a certain number
of shares of Common Stock determined by dividing $250.00 (the price of one Unit) by the average of the high and low sale prices
of the Company’s publicly traded common stock as reported on the NASDAQ on the Unit Purchase Date and (ii) Common Stock
purchase warrants to purchase an additional twenty-five (25) shares of Common Stock. The investor’s Plan account was credited
with the number of shares of the Company’s Common Stock acquired under the Units purchased. Each warrant affords the investor
the opportunity to purchase one share of Company Common Stock at a warrant exercise price of $1.00. The warrant is referred to
as “ZNWAJ.” The
warrants became exercisable on October 29, 2018 and continue to be exercisable through October 29, 2020 at a per share exercise
price of $1.00, after the Company, on December 4, 2018, extended the termination date of the Warrant by one (1) year from the
expiration date of October 29, 2019 to October 29, 2020. On
May 29, 2019, the Company extended the termination date of the ZNWAJ Warrant by one (1) year from the expiration date of October
29, 2020 to October 29, 2021. Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value
assigned to this extension. On
December 10, 2018, the Company initiated another Unit Option Program and it terminated on January 23, 2019. The Unit Option Program
consisted of Units of the Company’s securities where each Unit (priced at $250.00 each) is comprised of (i) two hundred
and fifty (250) shares of Common Stock and (ii) Common Stock purchase warrants to purchase an additional two hundred and fifty
(250) shares of Common Stock at a per share exercise price of $0.01. The investor’s Plan account was credited with the number
of shares of the Company’s Common Stock and Warrants that are acquired under the Units purchased. Each warrant affords the
participant the opportunity to purchase one share of our Common Stock at a warrant exercise price of $0.01. The warrant is referred
to as “ZNWAK.” The
warrants became exercisable on February 25, 2019 and continue to be exercisable through February 25, 2020 at a per share exercise
price of $0.01. On
May 29, 2019, the Company extended the termination date of the ZNWAK Warrant by one (1) year from the expiration date of February
25, 2020 to February 25, 2021. Zion considers this warrant as permanent equity per ASC 815-40-35-2. As such, there is no value
assigned to this extension. On
April 24, 2019, the Company’s most recent Unit Option Program began and it terminated on June 26, 2019, after the Company,
on June 5, 2019, extended the termination date of the Unit Option Program. The
Unit Option Program consisted of Units of the Company’s securities where each Unit (priced at $250.00 each) was comprised
of (i) two hundred and fifty (250) shares of Common Stock and (ii) Common Stock purchase warrants to purchase an additional fifty
(50) shares of Common Stock at a per share exercise price of $2.00. The investor’s Plan account was credited with the number
of shares of the Company’s Common Stock and Warrants acquired under the Units purchased. For Plan participants who enrolled
into the Unit Program with the purchase of at least one Unit and also enrolled in the separate Automatic Monthly Investments (“AMI”)
program at a minimum of $50.00 per month or more, received an additional twenty-five (25) warrants at an exercise price of $2.00
during this Unit Option Program. The twenty-five (25) additional warrants were for enrolling into the AMI program. Existing subscribers
to the AMI were entitled to the additional twenty-five (25) warrants once, if they purchased at least one (1) unit during the
Unit program. Each warrant affords the participant the opportunity to purchase one share of our Common Stock at a warrant exercise
price of $2.00. The warrant is referred to as “ZNWAL.” The
warrants became exercisable on August 26, 2019 and continue to be exercisable through August 26, 2021 at a per share exercise
price of $2.00. The
company raised approximately $8,000,000 from the period January 1, 2020 through March 17, 2020, under the DSPP program. For
the years ended December 31, 2019, and 2018, approximately $14,232,000, and $13,781,000 was raised under the DSPP program, respectively. The
warrants represented by the ticker ZNWAA are tradable on the Nasdaq market. However, all of the other warrants characterized above,
in the table below, and throughout this Form 10-K, are not tradeable and are used internally for classification and accounting
purposes only. F.
Subscription Rights Offering On
April 2, 2018 the Company announced an offering (“2018 Subscription Rights Offering”) through American Stock Transfer
& Trust Company, LLC (the “Subscription Agent”), at no cost to the shareholders, of non-transferable Subscription
Rights to purchase Rights (each “Right” and collectively, the “Rights”) of its securities to persons who
owned shares of our Common Stock on April 13, 2018 (“the Record Date”). Pursuant to the 2018 Subscription Rights Offering,
each holder of shares of common stock on the Record Date received non-transferable rights to subscribe for Rights, with each
Right comprised of one share of the Company Common Stock, par value $0.01 per share (the “Common Stock”)
and one Common Stock Purchase Warrant to purchase an additional one share of Common Stock. Each Right could be purchased at a
per Right subscription price of $5.00. Each Warrant affords the investor the opportunity to purchase one share of the Company
Common Stock at a warrant exercise price of $3.00. The warrant is referred to as “ZNWAI.” The
warrants became exercisable on June 29, 2018 and continue to be exercisable through June 29, 2020 at a per share exercise price
of $3.00, after the Company, on December 4, 2018, extended the termination date of the Warrant by one (1) year from the expiration
date of June 29, 2019 to June 29, 2020. On
May 29, 2019, the Company extended the termination date of the ZNWAI Warrant by one (1) year from the expiration date of June
29, 2020 to June 29, 2021. Each
shareholder received .10 (one tenth) of a subscription right (i.e. one subscription right for each 10 shares owned) for each share
of the Company’s Common Stock owned on the Record Date. The
2018 Subscription Rights Offering terminated on May 31, 2018. The Company raised net proceeds of approximately $3,038,000, from
the sale of the Rights, after deducting fees and expenses of $243,000 incurred in connection with the rights offering. G.
Warrants Extended On
December 4, 2018, the Company executed an Amendment to certain Warrant Agent Agreements (the “Agreements”) between
the Compan |
