STOCK BASED COMPENSATION [Text Block] | NOTE 12 – STOCK-BASED COMPENSATION a. Global Share Incentive Plan On May 23, 2012, the Company's board of directors adopted the global share incentive plan (2012) ("Global Share Incentive Plan (2012) "). Under the Global Share Incentive Plan (2012), 12,000,000 shares of common stock have been reserved for the grant of options, which may be issued at the discretion of the Company's board of directors from time to time. Under this plan, each option is exercisable into one share of common stock of the Company. The options may be exercised after vesting and in accordance with the vesting schedule that will be determined by the Company's board of directors for each grant. The maximum contractual life term of the options is 10 years. b. Options Granted to Employees and Directors 1) On August 22, 2014, the Company approved an aggregate of 2,762,250 stock options to the Company’s Chief Executive Officer that are exercisable at $0.0001 per share. Out of the total approved, 414,304 options vested immediately with a fair value as of the date of grant of $261 thousand using the Black-Scholes valuation model, 1,242,996 options will vest quarterly over 4 years, with a fair value as of the date of grant of $783 thousand using the Black-Scholes valuation model, and 1,104,950 options will be vested pursuant to performance milestones that will be determined by the Compensation Committee of the Company's Board. Up to the date of this report, no performance milestones have been determined. All the options will expire on August 22, 2024. 2) On June 18, 2015, the Company approved an aggregate of 500,000 stock options to two directors that are exercisable at the market price on date of grant, or $0.53 per share. The options vest immediately and expire on June 18, 2020. The fair value of those options as of the date of grant was $136 thousand using the Black-Scholes valuation model. The volatility of stock-based compensation is based on historical volatility of the Company for the last two years. The expected term is the mid-point between the vesting date and the maximum contractual term for each grant equal to the contractual life. The fair value of each option grant is based on the following assumptions: Year Ended November 30, 2015 2014 Value of one common share $0.53 $0.53 - 0.63 Dividend yield 0% 0% Expected stock price volatility 85.7% 100.5 - 100.6% Risk free interest rate 1.68% 1.67 - 2.52% Expected term (years) 2.5 5 - 10 A summary of the Company's stock options granted to employees and directors as of November 30, 2015 and 2014 and changes for the years then ended is presented below: 2015 2014 Weighted Weighted Average Average Exercise Exercise Number of Price Number of Price Options $ Options $ Options outstanding at the beginning of the year 12,809,455 0.27 12,294,765 0.265 Changes during the year: Granted 500,000 0.53 2,707,300 0.194 Exercised (623,806 ) 0.001 Expired (2,440,120 ) 0.68 Forfeited (528,125 ) 0.5 (1,568,804 ) 0.205 Options outstanding at end of the year 10,341,210 0.16 12,809,455 0.27 Options exercisable at end of the year 8,696,162 0.09 9,661,548 0.568 Costs incurred with respect to stock-based compensation for employees and directors for the years ended November 30, 2015 and 2014 were $713 thousand and $1,200 thousand, respectively. As of November 30, 2015, there was $984 thousand of unrecognized compensation costs related to non-vested employees and directors stock options, to be recorded over the next 2.73 years. The following table presents summary information concerning the options granted to employees and directors outstanding as of November 30, 2015: Weighted Weighted Average Average Aggregate Exercise Number of Remaining Exercise Intrinsic Prices Outstanding Contractual Price Value $ Options Life $ $ (in thousands) 0.0001 4,439,205 7.1 0.0001 1,464 0.001 3,338,285 6.2 0.001 1,098 0.50 400,000 8.7 0.5 0.53 500,000 9.5 0.53 0.75 250,000 7.6 0.75 0.79 942,520 6.6 0.79 0.85 471,200 6.5 0.85 0.17 10,341,210 6.9 1.016 2,562 The following table presents summary of information concerning the options exercisable as of November 30, 2015: Exercise Number of Prices Exercisable $ Options Total (in thousands) 0.0001 3,584,645 0.3 0.001 3,338,285 3 0.50 325,000 163 0.53 500,000 265 0.75 100,000 75 0.79 565,512 447 0.85 282,720 240 8,696,162 1,193 c. Options Granted to Consultants and Service Providers 1) On April 3, 2014, the Company entered into a consulting agreement with Aspen Agency Limited, a Hong Kong corporation (“Aspen”), pursuant to which Aspen has agreed to provide investment banking, investor relations and business development services to the Company. In consideration for Aspen’s services, the Company agreed to issue to Aspen 3,000,000 stock options in two separate tranches of 1,000,000 and 2,000,000, with the second tranche vesting if they exercise the first tranche, to acquire shares of the Company’s common stock at an exercise price of $0.52 per share, for a period of three years. The fair value of the options was $744 thousand and was recorded as additional paid in capital in the balance sheet with a corresponding expense in general and administrative expenses. On October 23, 2014, the Company entered into a termination agreement with Aspen in which both parties agreed to terminate the consulting agreement and to cancel the first tranche of options. By way of cancellation of the first tranche of options, the second tranche was cancelled as well. The fair value of each option grant is estimated on the date of grant using a hybrid model combining a Monte Carlo simulation and Black-Scholes option pricing model with the following assumptions: Year Ended November 30, 2014 Value of one common share $0.51 Dividend yield 0% Expected stock price volatility 100% Risk free interest rate 0.11 - 0.95% Expected term (years) 1 - 3 2) On August 1, 2014, the Company granted an aggregate of 1,080,000 stock options to a consultant that are exercisable at $0.50, with 216,000 vesting immediately and 216,000 for each of the next four years. The options expire on August 1, 2018. The fair value of these options as of the date of grant was $403 thousand using the Black-Scholes option valuation model. The fair value of each stock option grant is estimated at the date of grant using the Black-Scholes valuation model. The volatility is based on historical volatilities of companies in comparable stages as well as the historical volatility of companies in the industry and, by statistical analysis of the daily share-pricing model. The volatility of stock-based compensation granted after November 30, 2013 is based on historical volatility of the Company for the last two years. The expected term is equal to the contractual life, based on management estimation for the expected dates of exercising of the options. The fair value of each option grant is based on the following assumptions: Year Ended November 30, 2015 2014 Value of one common share $0.65, 0.53 $0.53 Dividend yield 0% 0% Expected stock price volatility 86%, 89% 101% Risk free interest rate 1.34%, 1.42% 1.31% Expected term (years) 5 4 A summary of the status of the stock options granted to consultants and service providers as of November 30, 2015, and 2014 and changes for the years then ended is presented below: 2015 2014 Weighted Weighted Average Average Exercise Exercise Number of Price Number of Price Options $ Options $ Options outstanding at the beginning of the year 2,458,104 0.75 1,378,104 0.95 Changes during the year: Granted 200,000 0.51 2,080,000 0.51 Expired (1,000,000 ) 0.52 Options outstanding at end of the year 2,658,104 0.75 2,458,104 0.75 Options exercisable at end of the year 1,521,624 0.65 1,171,384 0.77 The following table presents summary information concerning the options granted to consultants and service providers outstanding as of November 30, 2015 (in thousands, except per share data): Weighted Weighted Average Average Aggregate Exercise Number of Remaining Exercise Instrinsic Prices Outstanding Contractual Price Value* $ Options Life $ $ 0.50 1,080,000 2.67 0.50 0.52 100,000 4.55 0.52 0.61 100,000 6.98 0.61 0.65 100,000 4.2 0.65 0.69 706,904 6.17 0.69 0.96 100,000 7.35 0.96 1.40 471,200 6.38 1.40 2,658,104 4.72 0.75 - * There is no instrinsic value, as all options are “out of the money” The following table presents summary of information concerning the options exercisable as of November 30, 2015 (in thousands, except per share data): Exercise Number of Total Prices Exercisable Exercise $ Options Value $ 0.50 432,000 216 0.61 60,000 37 0.69 706,904 488 0.96 40,000 38 1.40 282,720 396 1,521,624 1,175 Costs incurred with respect to stock-based compensation for consultants and service providers for the year ended November 30, 2015 and 2014 was $90 and $923, respectively. As of November 30, 2015, there was $260 thousand of unrecognized compensation costs related to non-vested consultants and service providers, to be recorded over the next 4.55 years. |