Share-based Compensation

6 Months Ended

Jun. 30, 2016

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

Share-based Compensation

6. Share-based Compensation

Stock Options

The following is a summary of stock option activity for the six month period ended June 30, 2016, and the status of stock options outstanding at June 30, 2016:

	Six Month Period Ended
	June 30, 2016
			Wtd. Avg.
			Exercise
	Options		Price
Outstanding at beginning of year		2,555,263	$	1.80
Granted		704,000	$	1.80
Exercised		(96,166)	$	1.24
Forfeited		(372,458)	$	2.14
Expired		(59,026)	$	1.95
Outstanding at June 30, 2016		2,731,613	$	1.77
Stock options exercisable at June 30, 2016		1,355,954	$	1.57

As of June 30, 2016, there was $423,326 of aggregate intrinsic value of outstanding stock options, including $422,326 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 June 30, 2016. This amount will change based on the fair market value of the Company’s stock. During the three and six months ended June 30, 2016 intrinsic value of awards exercised was $41,413 and $45,667, respectively. Weighted average grant date fair value for options granted during the three and six months ended June 30, 2016 was $1.24 and $1.25 per share, respectively and $1.75 for each of the three and six months ended June 30, 2015.

 

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.

	Three Month Period Ended						Six Month Period Ended
	June 30,						June 30,
	2016			2015			2016			2015
Risk free interest rate		1.45	%		1.77	%		1.52	%		1.77	%
Dividend yield		0.0	%		0.0	%		0.0	%		0.0	%
Expected term (in years)		7			7			7			7
Volatility		75	%		105	%		75	%		105	%

Management applies an estimated forfeiture rate that is derived from historical employee termination data. The estimated forfeiture rate applied for the three and six month periods ended June 30, 2016 and 2015 was approximately 8.1% and 7.0%, respectively.

As of June 30, 2016, we had $2,007,687 of unrecognized compensation expense related to unvested stock options. We expect to recognize this compensation expense over a weighted average period of approximately 3.1 years.

 

Restricted Stock

The following is a summary of restricted stock activity for the six month period ended June 30, 2016, and the status of unvested restricted stock outstanding at June 30, 2016:

	Six Month Period Ended
	June 30, 2016
	Number of Restricted Shares		Grant-Date Fair Value
Outstanding at beginning of year		—	$	N/A
Granted		200,000	$	1.90
Vested		(62,498)	$	1.90
Outstanding at June 30, 2016		137,502	$	1.90

The aggregate fair value of the awards granted during the three and six months ended June 30, 2016 was $0 and $380,000, respectively, 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 and six months ended June 30, 2016 was $21,704 and $116,704, respectively.

We recognized stock compensation expense of $23,633 and $122,351 related to restricted stock awards for the three and six months ended June 30, 2016. As of June 30, 2016, there was $257,649 in unrecognized compensation costs related to restricted stock awards. We expect to recognize those costs over 2.7 years.

 

We recorded stock compensation expense for the three and six month periods ended June 30, 2016 and 2015, as follows:

	Three Month Period Ended				Six Month Period Ended
	June 30,				June 30,
	2016		2015		2016		2015
Research and development costs	$	47,366	$	19,414	$	84,835	$	26,358
Sales and marketing costs		54,748		19,270		118,247		25,025
General and administrative costs		142,367		57,677		219,878		65,450
Cost of product sales		11,754		28,501		(20,197)		41,538
Total	$	256,235	$	124,862	$	402,763	$	158,371

During the three and six month periods ended June 30, 2016, we reversed stock compensation expense related to stock compensation expense previously recorded on unvested stock options that were forfeited upon termination of certain employees during the periods in the amount of $215 and $40,532 to cost of product sales, respectively and $213 and $52,029 to operating expenses, respectively.