v3.3.1.900

Note 13 - Stock Option and Incentive Plan | 9 Months Ended | 12 Months Ended
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Sep. 30, 2015 | Dec. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |  |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 1 1. Stock Option Plan and Stock Incentive Plan On August 8, 2006, we adopted the Akeena Solar, Inc. 2006 Stock Incentive Plan (the “Stock Plan”) pursuant to which shares of common stock are available for issuance to employees, directors and consultants under the Stock Plan as restricted stock and/or options to purchase common stock. The Stock Plan allows for issuance of up to 125,000,000 shares and there were 120,586,033 shares available for issuance under the Stock Plan as of September 30, 2015. Restricted stock and options to purchase common stock may be issued under the Stock Plan. The restriction period on restricted stock grants generally expires at a rate of 25% per year over four years, unless decided otherwise by our Compensation Committee. Options to purchase common stock generally vest and become exercisable as to one-third of the total amount of shares subject to the option on each of the first, second and third anniversaries from the date of grant. Options to purchase common stock generally have a 5-year term. We use the Black-Scholes-Merton Options Pricing Model (“Black-Scholes”) to estimate fair value of our employee and our non-employee director stock-based awards. Black-Scholes requires various judgmental assumptions, including estimating stock price volatility, expected option life and forfeiture rates. If we had made different assumptions, the amount of our deferred stock-based compensation, stock-based compensation expense, gross margin, net loss and net loss per share amounts could have been significantly different. We believe that we have used reasonable methodologies, approaches and assumptions to determine the fair value of our common stock, and that our deferred stock-based compensation and related amortization were recorded properly for accounting purposes. If any of the assumptions we used change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period. We measure compensation expense for non-employee stock-based compensation under Accounting Standards Codification 505-50, “Equity-Based Payments to Non-Employees.” The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The estimated fair value is measured utilizing Black-Scholes using the value of our common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete (generally the vesting date). The fair value of the equity instrument is charged directly to expense and additional paid-in capital. We recognized stock-based compensation expense of approximately $38,000 and $50,000 during the three months ended September 30, 2015 and 2014, respectively, and approximately $147,000 and $321,000 during the nine months ended September 30, 2015 and 2014, respectively, relating to compensation expense calculated based on the fair value at the time of grant for restricted stock and based on Black-Scholes for stock options granted under the Stock Plan. Stock-based compensation expense for the nine months ended September 30, 2014, included $160,000, related to the issuance of convertible notes for our financial advisor. The following table sets forth a summary of restricted stock activity for the nine months ended September 30, 2015:
|  | Number of Restricted Shares |  |  | Weighted-Average Grant Date Fair Value |
Outstanding and not vested beginning balance as of January 1, 2015 |  |  | 7,186 |  |  | $ | 2.16 |
Granted |  |  | — |  |  | $ | — |
Forfeited/cancelled |  |  | — |  |  | $ | — |
Released/vested |  |  | (7,186 | ) |  | $ | 2.16 |
Outstanding and not vested as of September 30, 2015 |  |  | — |  |  | $ | — |
Restricted stock is valued at the grant date fair value of the common stock and expensed over the requisite service period or vesting period. We estimate forfeitures when recognizing stock-based compensation expense for restricted stock, and the estimate of forfeitures is adjusted over the requisite service period should actual forfeitures differ from such estimates. As of September 30, 2015, there was no remaining unrecognized stock-based compensation expense associated with the granting of unvested restricted stock. As of December 31, 2014, there was approximately $7,000 of unrecognized stock-based compensation expense associated with unvested restricted stock. The total fair value of shares vested during the nine months ended September 30, 2015 and 2014, was approximately $7,000 and $31,000, respectively. Tax benefits resulting from tax deductions in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows on our consolidated statements of cash flows. During the three and nine months ended September 30, 2015 and 2014, there were no excess tax benefits relating to restricted stock and therefore there is no impact on the accompanying condensed consolidated statements of cash flows. The following table sets forth a summary of stock option activity for the nine months ended September 30, 2015:
|  | Number of Shares Subject to Option |  |  | Weighted- Average Exercise Price |
Outstanding as of January 1, 2015 |  |  | 37,034,483 |  |  | $ | 0.03 |
Granted |  |  | — |  |  | $ | — |
Forfeited/cancelled/expired |  |  | 37,034,483 |  |  | $ | 0.03 |
Exercised |  |  | — |  |  | $ | — |
Outstanding as of September 30, 2015 |  |  | — |  |  | $ | — |
Exercisable as of September 30, 2015 |  |  | — |  |  | $ | — |
Stock options are valued at the estimated fair value grant date or the measurement date and expensed over the requisite service period or vesting period. The weighted-average volatility was based upon the historical volatility of our common stock price. There were no stock options granted during the three and nine months ended September 30, 2015 and 2014. On September 30, 2015, the Board of Directors cancelled all outstanding stock options. The 37,034,483 cancelled stock options include 15 million options issued to Steven Chan, our Chief Executive Officer. We have no plans to reissue stock options for at least the next six months to any of our officers, directors, employees or contractors. We are attempting to reduce cash compensation expenses with our officers, employees and contractors and are discussing both flexible and reduced workloads as well as offers to exchange restricted stock of Andalay Solar for reduced cash compensation. The weighted-average remaining contractual term for the stock options outstanding (vested and expected to vest) and exercisable as December 31, 2014, was 4.4 years. The total estimated fair value of stock options vested during the nine months ended September 30, 2014 was approximately $29,000. The aggregate intrinsic value of stock options outstanding as of September 30, 2015 was zero. We estimate forfeitures when recognizing stock-based compensation expense for stock options and the estimate of forfeitures is adjusted over the requisite service period should actual forfeitures differ from such estimates. As of December 31, 2014, there was approximately $514,000 of unrecognized stock-based compensation expense associated with stock options granted. Stock-based compensation expense relating to these stock options is being recognized over a weighted-average period of 3.1 years. Tax benefits resulting from tax deductions in excess of the compensation cost recognized (excess tax benefits) is classified as financing cash flows on our consolidated statements of cash flows. During the three and nine ended September 30, 2015, there were no excess tax benefits relating to stock options and therefore there is no impact on the accompanying consolidated statements of cash flows. | 13. Stock Option and Incentive Plan On August 8, 2006, we adopted the Andalay Solar, Inc. 2006 Stock Incentive Plan (the “Stock Plan”) pursuant to which shares of common stock are available for issuance to employees, directors and consultants under the Stock Plan as restricted stock and/or options to purchase common stock. At our Annual Meeting of Stockholders held on September 19, 2013, our stockholders approved and adopted an amendment to our 2006 Incentive Stock Plan, increasing the number of shares of our common stock reserved for issuance under the Plan from 3,000,000 to 50,000,000. Restricted stock and options to purchase common stock may be issued under the Stock Plan. The restriction period on restricted stock grants generally expire at a rate of 25% per quarter over one year or 25% per year over four years, unless decided otherwise by our Compensation Committee. Options to purchase common stock generally vest and become exercisable at a rate of 25% per quarter over one year or as to one-third of the total amount of shares subject to the option on each of the first, second and third anniversaries from the date of grant. Options to purchase common stock generally have a 5-year term. We use the Black-Scholes-Merton Option Pricing Model (Black-Scholes) to estimate fair value of our employee and our non-employee director stock-based awards. Black-Scholes requires various judgmental assumptions, including estimating stock price volatility, expected option life and forfeiture rates. If we had made different assumptions, the amount of our deferred stock-based compensation, stock-based compensation expense, gross margin, net loss and net loss per share amounts could have been significantly different. We believe that we have used reasonable methodologies, approaches and assumptions to determine the fair value of our common stock, and that our deferred stock-based compensation and related amortization were recorded properly for accounting purposes. If any of the assumptions we used change significantly, stock-based compensation expense may differ materially in the future from that recorded in the current period. We measure compensation expense for non-employee stock-based compensation under ASC 505-50, “Equity-Based Payments to Non-Employees.” The fair value of the option issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The estimated fair value is measured utilizing Black-Scholes using the value of our common stock on the date that the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete (generally the vesting date). The fair value of the equity instrument is charged directly to expense and additional paid-in capital. We recognized stock-based compensation expense of approximately $224,000 and $110,000 during the years ended December 31, 2014 and 2013, respectively, relating to compensation expense calculated based on the fair value at the time of grant for restricted stock and based on Black-Scholes for stock options granted under the Stock Plan. The following table sets forth a summary of restricted stock activity for the years ended December 31, 2014 and 2013:
|  | Number of Restricted Shares |  |  | Weighted-Average Grant Date Fair Value |
Outstanding and not vested beginning balance as of January 1, 2013 |  |  | 48,073 |  |  | $ | 2.50 |
Granted |  |  | 2,500,000 |  |  | $ | 0.03 |
Forfeited/cancelled |  |  | (21,798 | ) |  | $ | 2.46 |
Released/vested |  |  | (635,323 | ) |  | $ | 0.08 |
Outstanding and not vested beginning balance as of January 1, 2014 |  |  | 1,890,952 |  |  | $ | 0.05 |
Granted |  |  | — |  |  | $ | — |
Forfeited/cancelled |  |  | — |  |  | $ | — |
Released/vested |  |  | (1,883,766 | ) |  | $ | 0.04 |
Outstanding and not vested as of December 31, 2014 |  |  | 7,186 |  |  | $ | 2.16 |
Restricted stock is valued at the grant date fair value of the common stock and expensed over the requisite service period or vesting period. We estimate forfeitures when recognizing stock-based compensation expense for restricted stock, and the estimate of forfeitures is adjusted over the requisite service period should actual forfeitures differ from such estimates. As of December 31, 2014, there was approximately $1,000 of unrecognized stock-based compensation expense associated with the granted but unvested restricted stock. Stock-based compensation expense relating to these restricted shares is being recognized over a weighted-average period of 0.2 years. The total fair value of shares vested during the years ended December 31, 2014 and 2013, was approximately $64,000 and $19,000, respectively. Tax benefits resulting from tax deductions in excess of the compensation cost recognized (excess tax benefits) are classified as financing cash flows on our consolidated statements of cash flows. During the years ended December 31, 2014 and 2013, there were no excess tax benefits relating to restricted stock and therefore there is no impact on the accompanying consolidated statements of cash flows. The following table sets forth a summary of stock option activity for the years ended December 31, 2014 and 2013:
|  | Number of Shares Subject To Option 2014 |  |  | Weighted-Average Exercise Price |  |  | Number of Shares Subject To Option 20 13 |  |  | Weighted-Average Exercise Price |
Outstanding beginning balance |  |  | 6,618,233 |  |  | $ | 0.11 |  |  |  | 679,744 |  |  | $ | 2.82 |
Granted during the year |  |  | 30,456,250 |  |  |  | 0.02 |  |  |  | 6,400,000 |  |  |  | 0.03 |
Forfeited/cancelled/expired during the year |  |  | (40,000 | ) |  |  | 5.15 |  |  |  | (461,511 | ) |  |  | 3.29 |
Exercised during the year |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Outstanding at end of year |  |  | 37,034,483 |  |  | $ | 0.03 |  |  |  | 6,618,233 |  |  | $ | 0.11 |
Exercisable at end of year |  |  | 5,934,303 |  |  | $ | 0.09 |  |  |  | 2,330,650 |  |  | $ | 0.28 |
Outstanding and expected to vest |  |  | 36,916,502 |  |  | $ | 0.03 |  |  |  | 6 191,212 |  |  | $ | 0.11 |
Stock options are valued at the estimated fair value on the grant date or the measurement date and expensed over the requisite service period or vesting period. The weighted-average volatility was based upon the historical volatility of our common stock price. The fair value of stock option grants during the years ended December 31, 2014 and 2013 was estimated using the Black-Scholes option-pricing model with the following assumptions:
|  | Years Ended December 31, |
|  | 201 4 |  |  | 201 3 |
Weighted-average volatility |  |  | 185.0 | % |  |  | 105.5 | %
Expected dividends |  |  | 0.0 | % |  |  | 0.0 | %
Expected life (in years) |  | 3.5 |  |  | 2.0 |
Weighted-average risk-free interest rate |  |  | 1.1 | % |  |  | 0.30 | %
The weighted-average fair value per share of the stock options as determined on the date of grant was $0.02 for the stock options to purchase 30,456,250 shares of common stock granted during the years ended December 31, 2014 and $0.02 for the stock options to purchase 6,400,000 share of common stock granted during the years ended December 31, 2013. The weighted-average remaining contractual term for the stock options outstanding (vested and expected to vest) and exercisable as of December 31, 2014 and 2013, was 4.4 and 4.7 years, respectively. The total estimated fair value of stock options vested during the years ended December 31, 2014 and 2013 was approximately $91,000 and $81,000, respectively. The aggregate intrinsic value of stock options outstanding as of December 31, 2014 and 2013 was zero. We estimate forfeitures when recognizing stock-based compensation expense for stock options and the estimate of forfeitures is adjusted over the requisite service period should actual forfeitures differ from such estimates. As of December 31, 2014 there was approximately $514,000 of unrecognized stock-based compensation expense associated with stock options granted. Stock-based compensation expense relating to these stock options is being recognized over a weighted-average period of 0.7 years and 1.0, respectively. Tax benefits resulting from tax deductions in excess of the compensation cost recognized (excess tax benefits) is classified as financing cash flows on our consolidated statements of cash flows. During the years ended December 31, 2014 and 2013, there were no excess tax benefits relating to stock options and therefore there is no impact on the accompanying consolidated statements of cash flows. Non-vested stock option activity for the year ended December 31, 2014 is as follows:
|  | Non-Vested Stock Options |  |  | Weighted-Average Grant Date Fair Value |
Outstanding as of January 1, 2014 |  |  | 4,287,583 |  |  | $ | 0.02 |
Granted |  |  | 30,456,250 |  |  | $ | 0.02 |
Forfeited/cancelled |  |  | (40,000 | ) |  | $ | 3.04 |
Released/vested |  |  | (3,637,403 | ) |  | $ | 0.02 |
Outstanding as of December 31, 2014 |  |  | 31,066,430 |  |  | $ | 0.02 |
Options outstanding as of December 31, 2014 are summarized as follows:
|  |  |  |  |  | Options Outstanding |  |  | Vested Options |
|  |  |  |  |  | Number Outstanding |  |  | Weighted- Average Remaining Contractual Life (in years) |  |  | Weighted- Average Exercise Price |  |  | Number Outstanding |  |  | Weighted- Average Exercise Price |
|  |  | $0.0192 |  |  |  | 12,450,000 |  |  |  | 4.6 |  |  | $ | 0.02 |  |  |  | 358,320 |  |  | $ | 0.02 |
| $0.020 | - | $0.023 |  |  |  | 18,000,000 |  |  |  | 4.6 |  |  | $ | 0.02 |  |  |  | 1,125,000 |  |  | $ | 0.02 |
|  |  | $0.0296 |  |  |  | 6,400,000 |  |  |  | 3.8 |  |  | $ | 0.0296 |  |  |  | 4,266,500 |  |  | $ | 0.0296 |
| $0.11 | - | $5.32 |  |  |  | 184,483 |  |  |  | 1.3 |  |  | $ | 1.95 |  |  |  | 184,483 |  |  | $ | 1.95 |
| $0.0192 | - | $5.32 |  |  |  | 37,034,483 |  |  |  | 4.4 |  |  | $ | 0.03 |  |  |  | 5,934,303 |  |  | $ | 0.09 |

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51659978&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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