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Employee Share-Based Compensation
 3 Months Ended
Apr. 01, 2017
Share-based Compensation  
Employee Share-Based Compensation

Share-Based Compensation for Robert Fried

 

On March 12, 2017, the Board appointed Robert Fried, as President and Chief Strategy Officer. In connection with his appointment as President and Chief Strategy Officer, the Company granted an option to purchase up to 500,000 shares of ChromaDex common stock under the ChromaDex Second Amended and Restated 2007 Equity Incentive Plan or any subsequent equity plan, subject to monthly vesting over a three-year period. The Company also granted 166,667 shares of restricted stock, subject to annual vesting over a three-year period. The fair value measured for the granted restricted stock was approximately $453,000 and the expense will be amortized over the vesting period of three years.

  

Service Period Based Stock Options

 

The following table summarizes activity of service period based stock options granted to employees at April 1, 2017 and changes during the three months then ended:

 

          Weighted Average        
                Remaining           Aggregate  
    Number of     Exercise     Contractual     Fair     Intrinsic  
    Shares     Price     Term     Value     Value  
Outstanding at December 31, 2016     4,281,151     $ 3.52       6.36              
                                     
Options Granted     553,334       2.78       10.00     $ 1.80        
Options Exercised     (3,202 )     2.07                     $ 3,000  
Options Forfeited     (3,271 )     3.57                          
Outstanding at April 1, 2017     4,828,012     $ 3.44       6.55             $ 375,000  
                                         
Exercisable at April 1, 2017     3,246,220     $ 3.41       5.21             $ 361,000  

 

The aggregate intrinsic values in the table above are based on the Company’s stock price of $2.69, which is the closing price of the Company’s stock on the last day of business for the period ended April 1, 2017.

 

The fair value of the Company’s stock options was estimated at the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for options granted to employees during the three months ended April 1, 2017.

 

Three Months Ended April 1, 2017      
Expected term     5.8 years  
Expected volatility     73 %
Expected dividends     0.00 %
Risk-free rate     2.20 %

 

As of April 1, 2017, there was approximately $3,154,000 of total unrecognized compensation expected to be recognized over a weighted average period of 2.7 years.

 

Employee Share-Based Compensation

 

The Company recognized compensation expense of approximately $306,000 and $307,000 in general and administrative expenses in the statement of operations for the three months ended April 1, 2017 and April 2, 2016, respectively.