Equity Instruments | Note 8 - Equity Instruments Options In 2010, Ampio shareholders approved the adoption of a stock and option award plan (the “2010 Plan”), under which shares were reserved for future issuance under restricted stock awards, options, and other equity awards. The 2010 Plan permits grants of equity awards to employees, directors and consultants. The shareholders have approved a total of 11.7 During the nine months ended September 30, 2017, the Company granted 1,571,334 0.65 628,000 943,334 Weighted Weighted Average Number of Average Remaining Options Exercise Price Contractual Life Outstanding December 31, 2016 7,175,832 $ 3.64 4.99 Granted 1,571,334 $ 0.65 Exercised - $ - Forfeited (1,438,334) $ 4.02 Expired or Cancelled - $ - Outstanding September 30, 2017 7,308,832 $ 2.85 5.41 Exercisable at September 30, 2017 6,335,494 $ 3.16 4.78 Available for grant at September 30, 2017 2,916,169 Number of Weighted Weighted Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Contractual Lives $0.48 - $2.00 3,196,888 $ 0.90 6.48 $2.01 - $5.00 2,731,944 $ 3.05 4.14 $5.01 - $8.93 1,380,000 $ 6.99 5.42 7,308,832 $ 2.85 5.41 Ampio has computed the fair value of all options granted using the Black-Scholes option pricing model. To calculate the fair value of the options, certain assumptions are made regarding components of the model, including the estimated fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to valuation. Ampio calculates its volatility assumption using the actual changes in the market value of its stock. Ampio adopted ASU 2016-09 in 2017 and no longer estimates a forfeiture rate. Instead, forfeitures are recognized as they occur. Ampio estimates the expected term based on the average of the vesting term and the contractual term of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity Expected volatility 34.35% - 113.2 % Risk free interest rate 1.16% - 2.13 % Expected term (years) 0.5 - 6.5 Dividend yield 0.0 % Stock-based compensation expense related to the fair value of stock options was included in the statements of operations as research and development expenses or selling, general and administrative expenses as set forth in the table below. Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Research and development expenses Stock-based compensation $ 179,000 $ 162,000 $ 255,000 $ 317,000 General and administrative expenses Common stock issued for services - - 60,000 60,000 Stock-based compensation 127,000 281,000 354,000 1,009,000 $ 306,000 $ 443,000 $ 669,000 $ 1,386,000 Unrecognized expense at September 30, 2017 $ 378,000 Weighted average remaining years to vest 1.57 Warrants Ampio has issued warrants in conjunction with private and public offerings Weighted Weighted Average Number of Average Remaining Warrants Exercise Price Contractual Life Outstanding December 31, 2016 5,648,576 $ 0.67 4.28 Warrants issued 11,869,464 $ 0.76 Warrants exercised - $ - Outstanding September 30, 2017 17,518,040 $ 0.73 4.34 In connection with the June 2017 registered direct offering, Ampio issued to investors warrants to purchase an aggregate of approximately 11 0.76 4,475,000 In the 2016 registered direct offering, Ampio issued to an investor warrants to purchase an aggregate of 5 1.00 2,289,000 The combined value for the warrant liability at September 30, 2017 is $ 6,764,000 During the 2017 registered direct offering, Ampio issued placement agent warrants to purchase an aggregate of approximately 879,000 0.76 Expected volatility 94.6 % Risk free interest rate 1.71 % Expected term (years) 5.0 Dividend yield 0.0 % In the 2016 registered direct offering, Ampio issued to the placement agent warrants to purchase an aggregate of 150,000 0.9375 In March 2017, the Company modified 498,576 75,000 In March 2017, the Company modified the five million warrants issued in conjunction with the Company’s September 2016 registered direct offering with an original strike price of $ 1.00 0.40 1.1 |