XML 33 R17.htm IDEA: XBRL DOCUMENT

11. Stock-Based Compensation

12 Months Ended

Dec. 31, 2015

Common Stock Reserved for Issuance

Aemetis authorized the issuance of 1.2 million shares of common stock under its Zymetis 2006 Stock Plan and Amended and Restated 2007 Stock Plan (together, the “Company Stock Plans”), which includes both incentive and non-statutory stock options and restricted stock awards. The options generally expire five to ten years from the date of grant. The options have a general vesting term of 1/12th every three months and are exercisable at any time after vesting subject to continuation of employment.

The Company granted 98 thousand stock options on May 21, 2015 with an expiration term for the options seven years from the grant date. In addition, 50 thousand restricted stock awards were granted on May 21, 2015 with immediate vesting. The fair value of the restricted stock awards is determined to be equal to the market price of the stock on the grant date.

The Company granted 62 thousand stock options on December 10, 2015 with expiration term for options 10 years from the grant date. The valuation of these options is described below with fair value assumption obtained on the grant date.

Non-Plan Stock Options

In November 2012, the Company issued 98 thousand stock options to board members and consultants outside of any Company stock option plan. As of December 31, 2015, all options are vested, and 89 thousand options are outstanding.

Inducement Equity Plan Options

In March 2015, the Board of Directors of the Company approved an Inducement Equity Plan authorizing the issuance of 100,000 non-statutory options to purchase common stock. The Company issued 25 thousand options during March 2015 with a three year vesting period and five year term at a weighted average exercise price of $3.88. As of December 31, 2015, all 25 thousand options were outstanding.

The following is a summary of awards granted under the above Plans:

	Shares Available for Grant			Number of Shares Outstanding			Weighted-Average Exercise Price

Balance as of December 31, 2014		5			1,015		$	5.52
Authorized		200			—			—
Granted		(235	)		235			3.83
Exercised		-			(145	)		2.72
Forfeited/expired		125			(125	)		3.64
Balance as of December 31, 2015		95			980		$	5.76

During 2015, 145 thousand shares of common stock issued upon exercise of options under from the Company’s stock plans had an intrinsic value of $246 thousand at time of exercise. The weighted average strike price for the shares exercised was $2.72 per share and the weighted average closing market price at time of exercise was $4.42.

Vested and unvested awards outstanding as of December 31, 2015 and 2014 follow:

	Number of Shares		Weighted Average Exercise Price		Remaining Contractual Term (In Years)		Average Intrinsic Value1
2015
Vested and Exercisable		687	$	6.49		2.32	$	-
Unvested		293		4.06		5.59		-
Total Outstanding		980	$	5.76		3.30	$	-

2014
Vested and Exercisable		648	$	5.84		2.47	$	670
Unvested		367		4.95		3.87		356
Total Outstanding		1,015	$	5.52		2.98	$	1,026

———————

(1) Intrinsic value based on the $2.90 and $5.79 closing price of Aemetis stock on December 31, 2015 and 2014 respectively, as reported on the NASDAQ Exchange and Over the Counter Bulletin Board respectively.

Stock-based compensation for employees

Stock-based compensation is accounted for in accordance with the provisions of ASC 718, Compensation-Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees and directors based on estimated fair values on the grant date. We estimate the fair value of stock-based awards on the date of grant using the Black-Scholes option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods using the straight-line method.

For the years ended December 31, 2015 and 2014, the Company recorded option expense in the amount of $0.9 million and $0.6 million, respectively.

Valuation and Expense Information

All issuances of stock options or other issuances of equity instruments to employees as the consideration for services received by us are accounted for based on the fair value of the equity instrument issued. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock based compensation expense requires us to make assumptions and judgments about the variables used in the calculation, including the fair value of our common stock, the expected term (the period of time that the options granted are expected to be outstanding), the volatility of our common stock, a risk-free interest rate, and expected dividends. We also estimate forfeitures of unvested stock options. To the extent actual forfeitures differ from the estimates, the difference will be recorded as a cumulative adjustment in the period estimates are revised. No compensation cost is recorded for options that do not vest. We use the simplified calculation of expected life described in the SEC’s Staff Accounting Bulletin No. 107, Share-Based Payment, and volatility is based on an average of the historical volatilities of the common stock of four entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. We use an expected dividend yield of zero, as we do not anticipate paying any dividends in the foreseeable future. Expected forfeitures are assumed to be zero due to the small number of plan participants and the plan.

The weighted average fair value calculations for options granted are based on the following weighted average assumptions:

Description	For the years ended December 31
	2015			2014
Dividend-yield		0	%		0	%
Risk-free interest rate		1.61	%		0.88	%
Expected volatility		76.55	%		77.86	%
Expected life (years)		5.40			3
Market value per share on grant date	$	3.69		$	4.38
Fair value per share on grant date	$	2.27		$	2.22

As of December 31, 2015, the Company had $630 thousand of total unrecognized compensation expense for employees which the Company will amortize over the 2.00 years of weighted remaining term.

In addition, Company issued 50 thousand shares in the Company’s restricted common stock for services provided by outside consulting firms at an exercise price of $4.26. The fair value of the stock granted to the consultants was recorded to expense over the six months term of the consulting contract. We determine the fair value of the these awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Stock-based compensation awards issued to non-employees are recorded in expense and additional paid-in capital in stockholders’ deficit over the applicable service periods based on the fair value of the awards or consideration received at the vesting date.