Note 13 - Employee Equity Incentive Plans

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 13:              EMPLOYEE EQUITY INCENTIVE PLANS

Stock Option Plan

Description of 2009 Equity Incentive Plan

In 2009, the Company’s Board of Directors and shareholders approved the 2009 Equity Incentive Plan of OmniComm Systems, Inc. (the “2009 Plan”).  The 2009 Plan provides for granting Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share Units.  Pursuant to the 2009 Plan, 7,500,000 shares of the Company’s common stock are authorized for issuance.

The maximum term for any option grant under the 2009 Plan is ten years from the date of the grant; however, options granted under the 2009 Plan will generally expire five years from the date of grant for most employees, officers and directors of the Company.  Options granted to employees generally vest either upon grant or in two installments.  The first vesting, which is equal to 50% of the granted stock options, occurs upon completion of one full year of employment from the date of grant and the second vesting occurs on the second anniversary of the employee’s employment.  The vesting period typically begins on the date of hire for new employees and on the date of grant for existing employees.

As of December 31, 2015, there were 2,002,500 outstanding options and 3,533,330 restricted stock shares that have been granted under the 2009 Plan.  At December 31, 2015, there were 931,057 shares available for grant as options or other forms of share-based compensation under the 2009 Plan.

Description of 1998 Stock Incentive Plan

In 1998, the Company’s Board of Directors and shareholders approved the 1998 Stock Incentive Plan of OmniComm Systems, Inc. (the “1998 Plan”).  The 1998 Plan provides for granting Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Phantom Stock Unit Awards and Performance Share Units.  Pursuant to the 1998 Plan, 12,500,000 shares of the Company’s common stock were authorized for issuance.  The 1998 Plan expired as of December 31, 2008.  As of December 31, 2015, there were -0- outstanding options that have been granted under the 1998 Plan.

The following table summarizes the stock option activity for the Company’s equity incentive plans:

	Number of shares			Weighted average exercise price (per share)		Weighted average remaining contractual term (in years)		Aggregate intrinsic value
Outstanding at December 31, 2013		5,745,000		$	0.29		1.70	$	93,945
Granted		150,000			0.16
Exercised		(150,000	)		0.13
Forfeited/cancelled/expired		(2,615,000	)		0.40
Outstanding at December 31, 2014		3,130,000			0.20		1.59	$	364,900
Granted		225,000			0.25
Exercised		(292,500	)		0.12
Forfeited/cancelled/expired		(1,060,000	)		0.35
Outstanding at December 31, 2015		2,002,500		$	0.14		1.40	$	198,990
Vested and exercisable at December 31, 2015		1,752,500		$	0.13		1.02	$	190,200

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price at fiscal year-end and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2015.

The total number of shares vested and the fair value of shares vested for the years ended December 31, 2015 and December 31, 2014, respectively, was:

Fair value of options vesting for the year ended	Number of options vested		Fair value of options vested
December 31, 2015		200,000	$	34,665
December 31, 2014		695,834	$	84,450

Cash received from stock option exercises for the years ended December 31, 2015 and December 31, 2014 was $27,250 and $-0-, respectively. Due to the Company’s net loss position, no income tax benefit has been realized during the years ended December 31, 2015 and December 31, 2014.

The following table summarizes information concerning options outstanding at December 31, 2015:

Awards breakdown by price range at December 31, 2015
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		1,777,500		1.14	$	0.13		1,652,500		0.93	$	0.13
0.21	to	0.29		125,000		2.83		0.22		100,000		2.46		0.21
0.30	to	0.49		100,000		4.17		0.30		-0-		0.00		0.00
0.50	to	0.70		-0-		0.00		0.00		-0-		0.00		0.00
0.00	to	0.70		2,002,500		1.40	$	0.14		1,752,500		1.02	$	0.13

The following table summarizes information concerning options outstanding at December 31, 2014:

Awards breakdown by price range at December 31, 2014
			Outstanding						Vested
Strike price range ($)			Outstanding stock options		Weighted average remaining contractual life		Weighted average outstanding strike price		Vested stock options		Weighted average remaining vested contractual life		Weighted average vested strike price
0.00	to	0.20		2,080,000		1.98	$	0.13		1,855,000		1.72	$	0.12
0.21	to	0.29		600,000		0.92		0.24		550,000		0.69		0.25
0.30	to	0.49		-0-		0.00		0.00		-0-		0.00		0.00
0.50	to	0.70		450,000		0.68		0.50		450,000		0.68		0.50
0.00	to	0.70		3,130,000		1.59	$	0.20		2,855,000		1.35	$	0.21

The weighted average fair value (per share) of options granted during the years ended December 31, 2015 and December 31, 2014 using the Black Scholes option-pricing model was $0.24 and $0.16, respectively.

Basis for Fair Value Estimate of Share-Based Payments

Based on analysis of its historical volatility, the Company expects that the future volatility of its share price is likely to be similar to the historical volatility the Company experienced since the Company’s commercialization activities were initiated during the second half of 2000. The Company used a volatility calculation utilizing the Company’s own historical volatility to estimate its future volatility for purposes of valuing the share-based payments granted during fiscal 2015 and 2014. Actual volatility, and future changes in estimated volatility, may differ substantially from the Company’s current estimates.

The Company utilizes the historical data available regarding employee and director exercise activity to calculate an expected life of the options. The table below presents the weighted average expected life in years of options granted under the Plan as described above. The risk-free rate of the stock options is based on the U.S. Treasury yield curve in effect at the time of grant, which corresponds with the expected term of the option granted.

The fair value of share-based payments was estimated using the Black Scholes option pricing model with the following assumptions for grants made during the periods indicated.   

	Stock option assumptions for the year ended
Stock option assumptions	December 31, 2015			December 31, 2014
Risk-free interest rate		1.20	%		0.93	%
Expected dividend yield		0.0	%		0.0	%
Expected volatility		183.8	%		199.0	%
Expected life of options (in years)		5			5

The following table summarizes weighted average grant date fair value activity for the Company incentive stock plans:

	Weighted average grant date fair value
	for the year ended December 31,
	2015		2014
Stock options granted during the period	$	0.24	$	0.16
Stock options vested during the period	$	0.17	$	0.12
Stock options forfeited during the period	$	0.26	$	0.31

A summary of the status of the Company’s non-vested shares underlying stock options as of December 31, 2015, and changes during the year ended December 31, 2015 is as follows:

	Shares underlying stock options		Weighted average grant date fair value
Nonvested shares at January 1, 2015		275,000	$	0.17
Nonvested shares at December 31, 2015		250,000	$	0.23

As of December 31, 2015, approximately $32,057 of total unrecognized compensation cost related to unvested stock options is expected to be recognized over a weighted-average period of 1.18 years.