Share-based Compensation

3 Months Ended

Mar. 31, 2016

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

6. Share-based Compensation

Stock Options

The following is a summary of stock option activity for the three month period ended March 31, 2016, and the status of stock options outstanding at March 31, 2016:

	Three Month Period Ended
	March 31, 2016
				Wtd. Avg.
				Exercise
		Options		Price
Outstanding at beginning of year			2,555,263	$	1.80
Granted			265,000	$	1.84
Exercised			(9,985)	$	1.40
Forfeited			(358,708)	$	2.15
Outstanding at March 31, 2016			2,451,570	$	1.75

Stock options exercisable at March 31, 2016			1,185,030	$	1.43

As of March 31, 2016, there was $731,042 of aggregate intrinsic value of outstanding stock options, including $722,956 of aggregate intrinsic value of exercisable stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on March 31, 2016. This amount will change based on the fair market value of the Company’s stock. During the quarters ended March 31, 2016 and 2015 intrinsic value of awards exercised was $4,253 and $20,937, respectively.

The fair value of share-based payments made with stock options to employees and non-employee directors was estimated on the measurement date using the Black-Scholes model using the following weighted average assumptions (N/A for 2015 as no options were granted in that period).

	Three Month Period Ended
	March 31,
	2016			2015
Risk free interest rate		1.65	%		N/A
Dividend yield		0.0	%		N/A
Expected term (in years)		7			N/A
Volatility		75	%		N/A

The weighted average grant date fair value of options granted using these assumptions was $1.29 for the three months ended March 31, 2016.

Management applies an estimated forfeiture rate that is derived from historical employee termination data. The estimated forfeiture rate applied for the three month periods ended March 31, 2016 and 2015 was approximately 8.1% and 7.0%, respectively.

As of March 31, 2016, we had approximately $1,717,280 of unrecognized compensation expense related to unvested stock options. We expect to recognize this compensation expense over a weighted average period of approximately 3.05 years.

Restricted Stock

On March 15, 2016 the board granted 200,000 restricted stock awards under the Amended & Restated 2013 Performance Incentive Plan. The grants vested 25% immediately with the remainder vesting monthly for 36 months. The following is a summary of restricted stock activity for the three month period ended March 31, 2016, and the status of unvested restricted stock outstanding at March 31, 2016:

	Three Month Period Ended
	March 31, 2016
	Number of Restricted Shares		Grant-Date Fair Value
Outstanding at beginning of year		—	$	N/A
Granted		200,000	$	1.90
Vested		(50,000)	$	1.90
Outstanding at March 31, 2016		150,000	$	1.90

The aggregate fair value of the awards granted during the three months ended March 31, 2016 was $380,000 which represents the market value of BioLife common stock on the date that the restricted stock awards were granted. The aggregate fair value of the restricted stock awards that vested for the three months ended March 31, 2016 was $95,000.

We recognized stock compensation expense of $98,718 for the three months ended March 31, 2016. As of March 31, 2016, there was $248,399 in unrecognized compensation costs related to restricted stock awards. We expect to recognize those costs over 2.96 years.

We recorded stock compensation expense for the three month periods ended March 31, 2016 and 2015, as follows:

	Three Month Period Ended
	March 31,
	2016		2015
Research and development costs	$	37,469	$	6,944
Sales and marketing costs		63,499		5,755
General and administrative costs		77,510		7,773
Cost of product sales		(31,951)		13,037
Total	$	146,527	$	33,509

During the three month period ended March 31, 2016, we recorded forfeited unvested stock compensation expense in the amount of $40,317 to cost of product sales and $51,817 to general and administrative costs related to unvested stock options forfeited upon termination of certain employees.