XML 38 R18.htm IDEA: XBRL DOCUMENT
v3.7.0.1

12. STOCK OPTIONS AND WARRANTS | 12 Months Ended
--- | ---
Dec. 31, 2016
Equity [Abstract] |
STOCK OPTIONS AND WARRANTS | Blast 2003 Stock Option Plan and 2009 Stock Incentive Plan Under Blast’s 2003 Stock Option Plan and 2009 Stock Incentive Plan, options to acquire 3,424 shares of common stock were granted and remained outstanding and exercisable as of December 31, 2016 and 2015. No new options were issued under these plans in 2015 or 2016. 2012 Incentive Plan On July 27, 2012, the shareholders of the Company approved the 2012 Equity Incentive Plan (the “2012 Incentive Plan”), which was previously approved by the Board of Directors on June 27, 2012, and authorizes the issuance of various forms of stock-based awards, including incentive or non-qualified options, restricted stock awards, performance shares and other securities as described in greater detail in the 2012 Incentive Plan, to the Company’s employees, officers, directors and consultants. The 2012 Incentive Plan was amended on June 27, 2014, October 7, 2015 and December 28, 2016 to increase by 5,000,000, 3,000,000 and 5,000,000, respectively, the number of shares of common stock reserved for issuance under the Plan. A total of 15,000,000 shares of common stock are eligible to be issued under the 2012 Incentive Plan as of December 31, 2016, of which 11,020,990 shares have been issued as restricted stock, 3,967,000 shares are subject to issuance upon exercise of issued and outstanding options, and 12,010 remain available for future issuance as of December 31, 2016. PEDCO 2012 Equity Incentive Plan As a result of the July 27, 2012 merger by and between the Company, Blast Acquisition Corp., a wholly-owned Nevada subsidiary of the Company (“MergerCo”), and Pacific Energy Development Corp., a privately-held Nevada corporation (“PEDCO”) pursuant to which MergerCo was merged with and into PEDCO, with PEDCO continuing as the surviving entity and becoming a wholly-owned subsidiary of the Company, in a transaction structured to qualify as a tax-free reorganization (the “Merger”), the Company assumed the PEDCO 2012 Equity Incentive Plan (the “PEDCO Incentive Plan”), which was adopted by PEDCO on February 9, 2012. The PEDCO Incentive Plan authorized PEDCO to issue an aggregate of 1,000,000 shares of common stock in the form of restricted shares, incentive stock options, non-qualified stock options, share appreciation rights, performance shares, and performance units under the PEDCO Incentive Plan. As of December 31, 2016, options to purchase an aggregate of 310,136 shares of the Company’s common stock and 665,829 shares of the Company’s restricted common stock have been granted under this plan (all of which were granted by PEDCO prior to the closing of the merger with the Company, with such grants being assumed by the Company and remaining subject to the PEDCO Incentive Plan following the consummation of the merger). The Company does not plan to grant any additional awards under the PEDCO Incentive Plan. Options On January 7, 2015, the Company granted options to purchase an aggregate of 1,265,000 shares of common stock to certain of its consultants and employees at an exercise and market price of $0.37 per share, including an option to purchase 370,000 shares to Chairman and then Chief Executive Officer, Frank C. Ingriselli, an option to purchase 325,000 shares to President and then Chief Financial Officer, Michael L. Peterson, and an option to purchase 270,000 shares to Executive Vice President and General Counsel, Clark R. Moore, all pursuant to the Company’s 2012 Amended and Restated Equity Incentive Plan and in connection with the Company’s 2014 annual equity incentive compensation review process. The options have terms of five years and fully vest in January 2017. 50% vest six months from the date of grant, 20% vest one year from the date of grant, 20% vest eighteen months from the date of grant and 10% vest 2 years from the date of grant, all contingent upon the recipient’s continued service with the Company, subject in all cases to the terms of the Vesting Agreements. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $213,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.47%, (2) expected term of 3.8 years, (3) expected volatility of 60%, and (4) zero expected dividends. On January 7, 2016, the Company granted options to purchase an aggregate of 1,660,000 shares of common stock to certain of its consultants and employees at an exercise price of $0.22 per share, including an option to purchase 280,000 shares to its Chairman and then Chief Executive Officer (prior to his retirement) Frank C. Ingriselli, an option to purchase 300,000 shares to its President and then Chief Financial Officer Michael L. Peterson, and an option to purchase 280,000 shares to its Executive Vice President and General Counsel Clark R. Moore, all pursuant to the Company’s 2012 Amended and Restated Equity Incentive Plan and in connection with the Company’s 2014 annual equity incentive compensation review process. The options have terms of five years and fully vest in January 2018. 50% vest six months from the date of grant, 30% vest one year from the date of grant and 20% vest eighteen months from the date of grant, all contingent upon the recipient’s continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $183,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 1.61%, (2) expected term of 3.5 years, (3) expected volatility of 69%, and (4) zero expected dividends. On December 28, 2016, the Company granted options to purchase an aggregate of 900,000 shares of common stock to certain of its employees at an exercise price of $0.11 per share, including an option to purchase 600,000 shares to its Chief Financial Officer Gregory L. Overholtzer, all pursuant to the Company’s 2012 Amended and Restated Equity Incentive Plan and in connection with the Company’s 2016 annual equity incentive compensation review process. The options have terms of five years and fully vest in June 2018. 50% vest six months from the date of grant, 30% vest one year from the date of grant and 20% vest eighteen months from the date of grant, all contingent upon the recipient’s continued service with the Company. The aggregate fair value of the options on the date of grant, using the Black-Scholes model, was $60,000. Variables used in the Black-Scholes option-pricing model for the options issued include: (1) a discount rate of 2.02%, (2) expected term of 3.5 years, (3) expected volatility of 89%, and (4) zero expected dividends. During the year ended December 31, 2016, the Company recognized option stock-based compensation expense related to options of $298,000. The remaining amount of unamortized stock options expense at December 31, 2016 was $73,000. The Black-Scholes option-pricing model was used to determine fair value. Variables used in the Black-Scholes option-pricing model for the options issued in 2016 included: (1) a discount rate of 1.61% to 2.02%, (2) expected term of 3.5 years, (3) expected volatility of 69% to 89%, and (4) zero expected dividends. The intrinsic value of outstanding and exercisable options at December 31, 2016 was $-0- and $-0-, respectively. Option activity during the year ended December 31, 2016 was:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contract Term (years) |
Outstanding at January 1, 2016 |  |  | 3,058,890 |  |  | $ | 0.80 |  |  |  | 4.8 |
Granted |  |  | 2,560,000 |  |  |  | 0.18 |  |  |  |  |
Exercised |  |  | (81,290 | ) |  |  | 0.22 |  |  |  |  |
Forfeited and cancelled |  |  | (350,377 | ) |  |  | 0.89 |  |  |  |  |
Outstanding at December 31, 2016 |  |  | 5,187,223 |  |  | $ | 0.50 |  |  |  | 4.3 |
Exercisable at December 31, 2016 |  |  | 3,672,473 |  |  | $ | 0.61 |  |  |  | 4.2 |
Option activity during the year ended December 31, 2015 was:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contract Term (years) |
Outstanding at January 1, 2015 |  |  | 1,827,224 |  |  | $ | $1.08 |  |  |  | 6.5 |
Granted |  |  | 1,265,000 |  |  |  | 0.37 |  |  |  |  |
Exercised |  |  | (19,445 | ) |  |  | 0.30 |  |  |  |  |
Forfeited and cancelled |  |  | (13,889 | ) |  |  | 0.30 |  |  |  |  |
|  |  |  |  |  | $ | - |  |  |  | - |
Outstanding at December 31, 2015 |  |  | 3,058,890 |  |  |  | 0.80 |  |  |  | 4.8 |
Exercisable at December 31, 2015 |  |  | 2,177,540 |  |  |  | 0.76 |  |  |  | 5.1 |
Summary of options outstanding and exercisable as of December 31, 2016 was as follows:
Exercise Price |  | Weighted Average Remaining Life (Years) |  | Options Outstanding |  |  | Options Exercisable
$ | 0.11 |  |  |  | 0.9 |  |  |  | 900,000 |  |  |  | - |
| 0.22 |  |  |  | 1.1 |  |  |  | 1,380,000 |  |  |  | 890,000 |
| 0.24 |  |  |  | 0.1 |  |  |  | 100,000 |  |  |  | 100,000 |
| 0.30 |  |  |  | 0.1 |  |  |  | 26,001 |  |  |  | 26,001 |
| 0.37 |  |  |  | 0.8 |  |  |  | 1,225,000 |  |  |  | 1,150,500 |
| 0.51 |  |  |  | 1.1 |  |  |  | 1,090,800 |  |  |  | 1,090,800 |
| 1.41 |  |  |  | 0.1 |  |  |  | 100,000 |  |  |  | 100,000 |
| 1.94 |  |  |  | 0.1 |  |  |  | 217,500 |  |  |  | 167,250 |
| 2.50 |  |  |  | - |  |  |  | 80,000 |  |  |  | 80,000 |
| 3.75 |  |  |  | - |  |  |  | 64,500 |  |  |  | 64,500 |
| 30.24 |  |  |  | - |  |  |  | 2,976 |  |  |  | 2,976 |
| 67.20 |  |  |  | - |  |  |  | 446 |  |  |  | 446 |
$ | 0.11 to $67.20 |  |  |  | 4.3 |  |  |  | 5,187,223 |  |  |  | 3,672,473 |
Summary of options outstanding and exercisable as of December 31, 2015 was as follows:
Exercise Price |  | Weighted Average Remaining Life (Years) |  | Options Outstanding |  |  | Options Exercisable
$ | 0.24 |  |  |  | 0.2 |  |  |  | 121,667 |  |  |  | 121,667 |
| 0.30 |  |  |  | 0.1 |  |  |  | 26,001 |  |  |  | 26,001 |
| 0.37 |  |  |  | 1.6 |  |  |  | 1,265,000 |  |  |  | 647,500 |
| 0.51 |  |  |  | 2.3 |  |  |  | 1,090,800 |  |  |  | 1,090,800 |
| 1.41 |  |  |  | 0.1 |  |  |  | 100,000 |  |  |  | 40,000 |
| 1.94 |  |  |  | 0.3 |  |  |  | 267,500 |  |  |  | 131,000 |
| 2.50 |  |  |  | 0.1 |  |  |  | 80,000 |  |  |  | 32,000 |
| 3.75 |  |  |  | 0.1 |  |  |  | 104,500 |  |  |  | 85,150 |
| 30.24 |  |  |  | - |  |  |  | 2,976 |  |  |  | 2,976 |
| 67.20 |  |  |  | - |  |  |  | 446 |  |  |  | 446 |
$ | 0.24 to $67.20 |  |  |  | 4.8 |  |  |  | 3,058,890 |  |  |  | 2,177,540 |
Warrants Issuance of Warrants On April 24, 2015, the Company granted warrants exercisable for an aggregate of 349,111 shares of common stock to certain of the Senior Notes lenders related to the deferral of approximately $524,000 of principal and interest under the Senior Notes and subordinated note held by RJC. Each warrant has a 3-year term and is exercisable on a cashless basis at an exercise price of $1.50 per share. The fair value of these warrants of $40,000 was recorded as additional deferred financing costs. On July 1, 2015, the Company granted a warrant exercisable for an aggregate of 100,000 shares of common stock valued at $18,000, recorded as stock-based compensation, to an investor relations firm as sole consideration for its future services. The warrant has a 3-year term and is exercisable on a cashless basis at an exercise price of $0.44 per share with respect to 50% of the shares issuable thereunder following the date of grant and with respect to the balance of 50% of the shares issuable thereunder on or after October 1, 2015. On August 28, 2015, the Company granted warrants exercisable for an aggregate of 1,201,004 shares of common stock to certain of the Senior Notes lenders related to the current and future deferral of principal and interest under the Senior Notes and subordinated note held by RJC. Each warrant has a 3-year term and will be exercisable on a cashless basis at an exercise price of $0.75 per share. The fair value of these 1,201,004 warrants of $120,000 was recorded as additional deferred financing costs. On May 12, 2016, as consideration for the entry into the Amended NPA, the Company granted to BHLN and BBLN warrants exercisable for an aggregate of 5,962,800 shares of common stock of the Company (the “Investor Warrants”). The warrants have a 3-year term, are transferrable, and are exercisable on a cashless basis at any time at $0.25 per share, subject to receipt of additional listing approval of such underlying shares of common stock from the NYSE MKT (which additional listing approval was received from the NYSE MKT on June 1, 2016). The Investor Warrants include a beneficial ownership limitation that prohibits the exercise of the Investor Warrants to the extent such exercise would result in the holder, together with its affiliates, holding more than 9.99% of the Company’s outstanding voting stock (the “Blocker Provision”). The estimated fair value of the Investor Warrants issued is approximately $707,000 based on the Black-Scholes option pricing model. The relative fair value allocated to the Tranche A Notes and recorded as debt discount was $636,000. Other than the Investor Warrants, no additional warrants exercisable for common stock of the Company are due, owing, or shall be granted to the Lenders pursuant to the Senior Notes. In addition, warrants exercisable for an aggregate of 349,111 shares of the Company’s common stock at an exercise price of $1.50 per share and warrants exercisable for an aggregate of 1,201,004 shares of the Company’s common stock at an exercise price of $0.75 per share previously granted by the Company to certain of the Lenders on September 10, 2015 in connection with prior interest payment deferrals have been amended and restated to provide that all of such warrants are exercisable on a cashless basis and include a Blocker Provision. During the years ended December 31, 2016 and 2015, the Company recognized warrant stock-based compensation expense of $-0- and $702,000, respectively. The intrinsic value of outstanding and exercisable warrants at December 31, 2016 and December 31, 2015 was $-0- and $-0-, respectively. Warrant activity during the year ended December 31, 2016 was:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contract Term (# years) |
Outstanding at January 1, 2016 |  |  | 7,803,282 |  |  | $ | 1.78 |  |  |  | 3.0 |
Granted |  |  | 5,962,800 |  |  |  | 0.25 |  |  |  |  |
Forfeited and cancelled |  |  | (1,200,003 | ) |  |  | 4.50 |  |  |  |  |
Outstanding at December 31, 2016 |  |  | 12,566,079 |  |  | $ | 0.80 |  |  |  | 2.4 |
Exercisable at December 31, 2016 |  |  | 12,566,079 |  |  | $ | 0.80 |  |  |  | 2.4 |
Warrant activity during the year ended December 31, 2015 was:
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contract Term (# years) |
Outstanding at January 1, 2015 |  |  | 6,594,129 |  |  | $ | 2.13 |  |  |  | 3.9 |
Granted |  |  | 1,650,115 |  |  |  | 0.89 |  |  |  |  |
Forfeited and cancelled |  |  | (440,962 | ) |  |  | 3.67 |  |  |  |  |
Outstanding at December 31, 2015 |  |  | 7,803,282 |  |  | $ | 1.78 |  |  |  | 3.0 |
Exercisable at December 31, 2015 |  |  | 7,803,282 |  |  | $ | 1.78 |  |  |  | 3.0 |
Summary of warrants outstanding and exercisable as of December 31, 2016 was as follows:
| Exercise Price |  |  | Weighted Average Remaining Life (years) |  |  | Warrants Outstanding |  |  | Warrants Exercisable |
| $ | 0.25 |  |  |  | 1.1 |  |  |  | 5,962,800 |  |  |  | 5,962,800 |
|  | 0.44 |  |  |  | - |  |  |  | 100,000 |  |  |  | 100,000 |
|  | 0.75 |  |  |  | 0.2 |  |  |  | 1,201,004 |  |  |  | 1,201,004 |
|  | 1.00 |  |  |  | 0.8 |  |  |  | 3,700,758 |  |  |  | 3,700,758 |
|  | 1.50 |  |  |  | 0.1 |  |  |  | 349,111 |  |  |  | 349,111 |
|  | 2.34 |  |  |  | - |  |  |  | 166,684 |  |  |  | 166,684 |
|  | 2.50 |  |  |  | 0.2 |  |  |  | 1,000,000 |  |  |  | 1,000,000 |
|  | 5.25 |  |  |  | - |  |  |  | 85,722 |  |  |  | 85,722 |
| $ | 0.25 to $5.25 |  |  |  | 2.4 |  |  |  | 12,566,079 |  |  |  | 12,566,079 |
Summary of warrants outstanding and exercisable as of December 31, 2015 was as follows:
| Exercise Price |  |  | Weighted Average Remaining Life (years) |  |  | Warrants Outstanding |  |  | Warrants Exercisable |
| $ | 0.44 |  |  |  | - |  |  |  | 100,000 |  |  |  | 100,000 |
|  | 0.75 |  |  |  | 0.4 |  |  |  | 1,201,004 |  |  |  | 1,201,004 |
|  | 1.00 |  |  |  | 1.9 |  |  |  | 3,700,758 |  |  |  | 3,700,758 |
|  | 1.50 |  |  |  | 0.1 |  |  |  | 349,111 |  |  |  | 349,111 |
|  | 2.34 |  |  |  | - |  |  |  | 166,684 |  |  |  | 166,684 |
|  | 2.50 |  |  |  | 0.4 |  |  |  | 1,000,000 |  |  |  | 1,000,000 |
|  | 3.75 |  |  |  | 0.1 |  |  |  | 400,001 |  |  |  | 400,001 |
|  | 4.50 |  |  |  | - |  |  |  | 400,001 |  |  |  | 400,001 |
|  | 5.25 |  |  |  | 0.1 |  |  |  | 485,723 |  |  |  | 485,723 |
| $ | 0.44 to $5.25 |  |  |  | 3.0 |  |  |  | 7,803,282 |  |  |  | 7,803,282 |

X
- References No definition available. + Details
Name: | us-gaap_EquityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References No definition available. + Details
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration