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11. Stock Based Compensation

12 Months Ended

Dec. 31, 2013

Common Stock Reserved for Issuance

Aemetis authorized the issuance of 10,600,434 shares under its 2006 and 2007 Plans and 977,500 outside the plans, which includes both incentive and non-statutory stock options. These options generally expire five years from the date of grant with general vesting term of 1/12th every three months during 2013 and are exercisable at any time after vesting subject to continuation of employment.

The following is a summary of options granted under the employee stock plans:

	Shares Available			Number of			Weighted-Average
	for Grant			Shares Outstanding			Exercise Price
Balance as of December 31, 2011		1,656,148			6,803,701			0.94
Authorized		1,000,000			—			—
Granted		(2,555,000	)		2,555,000			0.55
Exercised		—			(321,965	)		0.23
Forfeited/Expired		1,511,902			(1,511,902	)		2.17
Balance as of December 31, 2012		1,611,134			7,524,834		$	0.59
Authorized		1,000,000			—			—
Granted		(2,876,000	)		2,876,000			0.58
Exercised		—			(264,005	)		0.33
Forfeited/Expired		1,009,332			(1,009,332	)		1.53
Balance as of December 31, 2013		744,466			9,127,497		$	0.49

During 2013 the net 264,005 shares of common stock exercised from the Company’s stock plans had an intrinsic value of $41,434 at time of exercise. The weighted average strike price for the shares exercised was $0.33 per share and the weighted average closing market price at time of exercise was $0.49. The exercised shares hold a restrictive legend.

For the year ended December 31, 2013 and 2012, the Company recorded option expense in the amount of $521,917 and $255,457, respectively. Included in the year ended December 31, 2013 and 2012, option expenses were $9,703 and $49,121, respectively, of outstanding consultant options subject to periodic fair value re-measurement under ASC 505-50-30 Equity Based Payments to Non Employees.

Vested and unvested options outstanding under the Aemetis Stock Option Plans as of December 31, 2013 and 2012 follow:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (In Years)		Average Intrinsic Value1
2013
Vested		5,163,175	$	0.44		1.77	$	523,112
Unvested		3,694,322		0.57		4.11		8,931
Total		9,127,497	$	0.49		2.79	$	532,043

2012
Vested		5,061,850	$	0.63		2.21	$	2,081,910
Unvested		2,462,984		0.52		4.69		435,197
Total		7,524,834	$	0.59		3.02	$	2,517,107

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(1) Intrinsic value calculation based on the $0.32 and $0.70 closing price of Aemetis stock on December 31, 2013 and 2012, as reported on the Over the Counter Bulletin Board.

In addition, for year ended December 31, 2013, the Company granted 2,150,000 common stock warrants at $0.40 per warrant to employees and board members and recognized $636,290 in stock compensation expense on these warrants. Please refer Note 8, “Outstanding Warrants” for more information.

The valuation using the Black-Scholes valuation pricing model is based upon the current market value of the Company’s common stock and other current assumptions, including the expected term (contractual term for consultant options). The Company records the expense related to consultant options using the accelerated expense pattern prescribed in ASC 505-50-30.

Valuation and Expense Information. The weighted-average fair value calculations for options granted within the period are based on the following weighted average assumptions:

	Fiscal Year Ended December 31
	2013			2012
Expected dividend yield		0	%		0	%
Risk-free interest rate		0.13% - 0.67	%		0.28% - 0.38	%
Expected volatility		60.39% - 79.70	%		79.08	%
Expected Life (years)		1.0 – 3.0			2.0 – 3.0
Weighted average fair value per share of common stock	$	0.28		$	0.26

As of December 31, 2013, the Company had $1,005,710 and $5,222 of total unrecognized compensation expense for employees and non-employees, respectively, which the Company will amortize over the 4.11 years of weighted remaining term.

Non-Plan Stock Options

In November 2012 the Company issued 977,500 stock options to board members and consultants outside of any Company stock option plan. None of the non-plan options have been exercised.

Outside Company Stock Plan

See following for summary of options granted outside the Company stock plans:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (In Years)		Average Intrinsic Value2
2013
Vested		690,000	$	0.55		3.85	$	-
Unvested		287,500		0.55		3.85		-
Total		977,500	$	0.55		3.85	$	-

2012
Vested		402,500	$	0.55		4.85	$	60,375
Unvested		575,000		0.55		4.85		86,250
Total		977,500	$	0.55		4.85	$	146,625

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(2) Intrinsic value based on the $0.32 and $0.70 closing price of Aemetis stock on December 31, 2013 and 2012 respectively, as reported on the Over the Counter Bulletin Board.