Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2015 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION |
|
Stock Incentive Plan |
|
In December 2014, the Company shareholders approved the adoption of the 2014 Long Term Incentive Plan ("the 2014 Plan") which authorized 2,000,000 shares to be available for issuance to officers, directors, employees, and affiliates of the Company. Options are issued at an exercise price equal to the fair market value of the Company’s common stock at the grant date. Generally, the options vest 25 percent after 1 year, and thereafter ratably each month over the following 36 months, and may be exercised for a period of 10 years subject to vesting. |
|
The Company has computed the fair value of all options granted during the year ended December 31, 2014 and three months ended March 31, 2015, using the Black-Scholes option pricing model using the following assumptions: |
|
| | | | | | | |
| | | | | | | | | | | | |
| Year ended | | Three months ended March 31, | | | | | | | |
December 31, | | | | | | | |
| 2014 | | 2015 | | | | | | | |
| | | (Unaudited) | | | | | | | |
| | | | | | | | | | |
Risk-free interest rate | 2.23 | % | | 1.72 | % | | | | | | | |
Expected volatility | 55 | % | | 73 | % | | | | | | | |
Expected dividend yield | — | | | — | | | | | | | | |
| | | | | | |
Expected life (in years) | 7.09 | | | 10 | | | | | | | | |
| | | | | | |
Expected forfeiture rate | — | | | — | | | | | | | | |
| | | | | | |
|
The following table summarizes the activity of the Company’s plan related to stock options: |
|
|
| | | | | | | | | | | | |
| Number | | Weighted | | Weighted | | Aggregate intrinsic value |
of options | average | average |
| exercise | remaining |
| price per share | contractual |
| | term (years) |
Outstanding as of December 31, 2014 | 2,300,050 | | | $ | 0.82 | | | 6.72 | | $ | 7,725,000 | |
|
Awarded (unaudited) | 318,234 | | | 3.1 | | | | | |
|
Exercised (unaudited) | (203,515 | ) | | 0.64 | | | | | |
|
Forfeited or Expired (unaudited) (1) | (806 | ) | | 1.16 | | | | | |
|
Outstanding as of March 31, 2015 (unaudited) | 2,413,963 | | | $ | 1.14 | | | 6.92 | | $ | 2,706,000 | |
|
Exercisable as of December 31, 2014 (2) | 2,099,345 | | | $ | 0.79 | | | 6.6 | | $ | 7,119,000 | |
|
Exercisable as of March 31, 2015 (unaudited) (2) | 1,936,424 | | | $ | 0.81 | | | 6.38 | | $ | 2,552,000 | |
|
|
| | | | | | | | | | | | |
-1 | Management considers the circumstances generating these forfeitures to be unusual and nonrecurring in nature; accordingly, no allowance for forfeitures of options to purchase shares has been considered in determining future vesting or expense. | | | | | | | | | | | |
| | | | | | | | | | | | |
-2 | The employee options shown as exercisable are subject to a one year lock up agreement pursuant to the terms of the Merger whereby these options, although fully vested, cannot be exercised until April 15, 2015, the day after the first anniversary of the Merger. | | | | | | | | | | | |
|
The weighted-average grant date fair value for equity options granted during the three months ended March 31, 2014 and 2015 was $0.66 and $2.40, respectively. The total fair value of options vested during the three months ended March 31, 2014 and March 31, 2015 was $79,000 and $60,000. |
|
In addition to stock options issued on January 28, 2015, the Company issued 100,806 restricted stock awards to directors and 579,548 restricted stock awards to executives. The directors' awards vest entirely on April 14, 2015. The executives' awards vest over a four year period with 25% of the vesting occurring annually over a four year period beginning on the issuance date. |
|
Stock-based compensation expense is included primarily in selling, general and administrative expense and was $77,000 and $432,000 for the three months ended March 31, 2014 and March 31, 2015, respectively. The Company has future unrecognized compensation expense for nonvested shares at March 31, 2015 of $3,036,000 with a weighted average vesting period of 3.5 years. |