Annual report pursuant to Section 13 and 15(d)

Stock Based Compensation

v3.3.1.900
Stock Based Compensation
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 9 – Stock Based Compensation
 
Equity Incentive Plans
 
2013 Equity Incentive Plan
 
In December 2013 the Company’s board and stockholders approved the “2013 Equity Incentive Plan”, providing for the issuance of equity based instruments covering up to an initial total of 1,042,167 shares of common stock. Effective on March 27, 2014, the aggregate total shares which may be issued under the 2013 Equity Incentive Plan were increased to 2,335,967, as described below.
 
Effective on March 10, 2014, the Company’s board of directors and stockholders approved the First Amendment to the 2013 Equity Incentive Plan which provided for an increase in the aggregate number of shares of common stock that may be issued pursuant to the Plan to equal 18% of the total number of shares of common stock outstanding immediately following the completion of the IPO (assuming for this purpose the issuance of all shares issuable under the Company’s equity plans, the conversion into common stock of all outstanding securities that are convertible by their terms into common stock and the exercise of all options and warrants exercisable for shares of common stock and including shares and warrants issued to the underwriters for such IPO upon exercise of its over-allotment options).
 
As of December 31, 2015, 185,827 shares of common stock remain eligible to be issued through equity-based instruments under the 2013 Equity Incentive Plan.
 
2014 Non-Employee Equity Compensation Plan
 
On March 6, 2014, the Company’s board of directors and stockholders approved the 2014 Non-Employee Equity Compensation Plan for the issuance of equity-based instruments covering up to 250,000 shares of common stock to directors and other non-employees.
 
As of December 31, 2015, 136,808 shares of common stock remain eligible to be issued through equity-based instruments under the 2014 Non-Employee Equity Compensation Plan.
 
2015 Performance Share Unit Plan
 
On April 10, 2015, the Company’s board of directors approved the Energous Corporation 2015 Performance Share Unit Plan (the “Performance Share Plan”), under which 1,310,104 shares of common stock became available for issuance as PSUs to a select group of employees and directors, subject to approval by the stockholders. On May 21, 2015 the Company’s stockholders approved the Performance Share Plan.
 
As of December 31, 2015, 31,951 shares of common stock remain eligible to be issued through equity based instruments under the Performance Share Unit Plan.
 
Employee Stock Purchase Plan
 
On April 10, 2015, the Company’s board of directors approved the ESPP, under which 600,000 shares of common stock have been reserved for purchase by the Company’s employees, subject to approval by the stockholders. On May 21, 2015, the Company’s stockholders approved the ESPP. Employees may designate an amount not less than 1% but not more than 10% of their annual compensation, but for not more than 7,500 shares during an offering period. An offering period shall be six months in duration commencing on or about January 1 and July 1 of each year. The exercise price of the option will be the lesser of 85% of the fair market of the common stock on the first business day of the offering period and 85% of the fair market value of the common stock on the applicable exercise date.
 
As of December 31, 2015, 553,977 shares of common stock remain eligible to be issued through equity based instruments under the ESPP. As of December 31, 2015, eligible employees have contributed $289,787 through payroll withholdings to the ESPP. On December 31, 2015, a total of 46,023 shares were then delivered to the participating employees.
 
Stock Options
 
On January 7, 2014, the Company’s board of directors granted to various employees and consultants from the 2013 Equity Incentive Plan stock options to purchase an aggregate of 537,845 shares of the Company’s common stock at an exercise price of $2.49 per share and having a term of ten years. Included in these grants were 57,644 options to Michael Leabman, Chief Technical Officer, pursuant to his employment contract, 80,201 options to George Holmes, Vice President of Sales and Marketing, and 319,799 options to other employees and consultants. The option awards granted to Mr. Leabman vested 3/48ths on the date of grant, and will vest 1/48th monthly over the following 45 months. The option award granted to Mr. Holmes vested 25% on October 1, 2014 and then continues to vest 1/48th of the initial award monthly for the subsequent 36 months. Effective October 5, 2015, Mr. Holmes resigned from the Company and subsequently signed an agreement to continue as a consultant to the Company. Per the separation agreement of Mr. Holmes, the options will continue to vest and shall stay in full force and effect for at least six months. Option awards granted to all other employees and consultants cliff vest 25% of the award on the later of the first anniversary of the date they started working for the Company or October 1, 2014 and then will vest 1/48th of the initial award monthly for the following 36 months. The options had an aggregate grant date fair value of $762,699 utilizing the Black-Scholes option pricing model.
 
On February 27, 2014, the Company granted non-qualified stock options for the purchase of 25,979 shares of the Company’s common stock each to two new independent directors of the Company as part of their compensation for serving on the Company’s board of directors. The options have an exercise price of $3.63 per share and have a term of ten years. The Options vest 25% on March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014. The options had an aggregate grant date fair value of $100,000 utilizing the Black-Scholes option pricing model.
 
On March 15, 2014 and March 20, 2014, the Company granted non-qualified stock options from the 2014 Non-Employee Equity Compensation Plan for the purchase of an aggregate of 34,781 shares of the Company’s common stock to two new independent directors of the Company as part of their compensation for serving on the Company’s board of directors. The options have a weighted average exercise price of $5.45 per share and have a term of ten years. The Options vest 25% on March 31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014. The options had an aggregate grant date fair value of $100,000 utilizing the Black-Scholes option pricing model.
 
On March 15, 2014, the Company’s board of directors granted to a single employee an option under the 2013 Equity Incentive Plan to purchase 80,201 shares of the Company’s common stock at an exercise price of $4.99.  The option award granted to the employee has a ten year term and cliff vests 25% of the award on the anniversary of the employee’s date of hire and then will vest 1/48th of the initial award monthly during the following 36 months. The option had a grant date fair value of $229,365 utilizing the Black-Scholes option pricing model.
 
On March 26, 2014, the Company’s board of directors granted to Mr. Rizzone, the Company’s Chief Executive Officer, an option under the 2013 Equity Incentive Plan to purchase 496,546 shares of the Company’s common stock, at a price of $6.00 per share, with a term of ten years and which vests 6/48 of the award on the grant date and 1/48 of the award on the last day of each of the subsequent 42 months. The option had a grant date fair value of $1,667,784 utilizing the Black-Scholes option pricing model.
 
On March 26, 2014, the Company’s board of directors granted to Michael Leabman, Chief Technical Officer, pursuant to his employment contract a stock option under the 2013 Equity Incentive Plan to purchase 251,474 shares of the Company’s common stock at an exercise price of $6.00.  The option award granted to Mr. Leabman has a ten year term and vests 6/48th of the award on the grant date and 1/48th of the award on the last day of each of the subsequent 42 months. The option had a grant date fair value of $844,643 utilizing the Black-Scholes option pricing model.
 
On March 26, 2014, the Company’s board of directors granted to Mr. Holmes a stock option under the 2013 Equity Incentive Plan to purchase 89,672 shares of the Company’s common stock at an exercise price of $6.00.  The option award granted to the consultant has a ten year term and vested 25% of the award on September 30, 2014 and continues to vest 1/48th of the award on the last day of each of the subsequent 36 months. The option had a grant date fair value of $303,869 utilizing the Black-Scholes option pricing model. On October 5, 2015, Mr. Holmes resigned his position with the Company and entered into a consulting agreement in which he agreed to forfeit and surrender this option grant.
 
The Company estimated the fair value of stock options awarded during the year ended December 31, 2014 using the Black-Scholes option pricing model. The fair values of stock options granted were estimated using the following assumptions:
 
 
 
Option Grants Awarded During the Year Ended
 
 
 
December 31, 2014
 
Stock price
 
 
$2.49 to $6.00
 
Dividend yield
 
 
0
%
Expected volatility
 
 
60
%
Risk-free interest rate
 
 
1.30% to 2.03%
 
Expected life
 
 
3.75 to 6.25 years
 
 
For the year ended December 31, 2015, the Company did not issue any grants.
 
Stock Option Award Activity
 
The following is a summary of the Company’s stock option activity during the year ended December 31, 2015:
 
 
 
 
 
 
 
Weighted
 
 
 
 
 
 
 
Weighted
 
Average
 
 
 
 
 
 
 
Average
 
Remaining
 
 
 
 
 
Number of
 
Exercise
 
Life In
 
Intrinsic
 
 
 
Options
 
Price
 
Years
 
Value
 
Outstanding at January 1, 2015
 
 
1,607,075
 
$
4.41
 
 
9.0
 
$
10,467,374
 
Granted
 
 
-
 
 
-
 
 
-
 
 
-
 
Exercised
 
 
(21,786)
 
 
3.01
 
 
-
 
 
-
 
Forfeited
 
 
(97,504)
 
 
5.72
 
 
-
 
 
-
 
Outstanding at December 31, 2015
 
 
1,487,785
 
$
4.43
 
 
8.0
 
$
5,310,340
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at December 31, 2015
 
 
860,970
 
$
4.34
 
 
8.0
 
$
3,076,767
 
 
As of December 31, 2015, the unamortized value of options was $1,676,416. As of December 31, 2015, the unamortized portion will be expensed over a weighted average period of 1.8 years.
 
The aggregate intrinsic value of options exercised was $92,728 and $0 for the years ended December 31, 2015 and 2014, respectively.
 
No options were granted during the year ended December 31, 2015. The weighted average grant date fair value per share of options granted during the year ended December 31, 2014 was $2.60
 
Option Valuation
 
The Company has computed the fair value of options granted using the Black-Scholes option pricing model. Option forfeitures are estimated at the time of valuation and reduce expense ratably over the vesting period. This estimate will be adjusted periodically based on the extent to which actual option forfeitures differ, or are expected to differ, from the previous estimate, when it is material. The expected term used for options issued to non-employees is the contractual life and the expected term used for options issued to employees is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. Since the Company’s stock has not been publicly traded for a sufficiently long period of time, the Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.
 
Restricted Stock Units (“RSUs”)
 
On June 3, 2014, the compensation committee of the board of directors of the Company granted to a member of the Company’s advisory board, an RSU award under which the holder has the right to receive 4,035 shares of common stock. The award was granted under the 2014 Non-Employee Equity Compensation Plan. The RSU had a grant date fair value of $49,590 based upon the fair value of the Company’s common stock on the date of grant. This RSU had 1,513 shares vested as of December 31, 2014 and vests 504 shares on each of the next five succeeding three month anniversaries of the grant date.
 
On July 14, 2014, the compensation committee of the board of directors granted to George Holmes an RSU under which the holder has the right to receive 44,836 shares of the Company’s common stock. The award was granted under the 2013 Equity Incentive Plan. The RSU had a grant date fair value of $593,180 based upon the fair value of the Company’s common stock on the date of grant. The award granted to Mr. Holmes vests 25% on March 28, 2015 and then 25% annually until fully vested. On October 5, 2015, Mr. Holmes resigned from his position with the Company and entered into a consulting agreement. Pursuant to the employment release agreement, the RSUs shall stay in full force and effect for at least 6 months.
 
On July 14, 2014, the compensation committee of the board of directors granted to various employees and consultants, RSUs under which the holders have the right to receive 228,500 shares of the Company’s common stock. These awards were granted under the 2013 Equity Incentive Plan and the RSU’s had an aggregate grant date fair value of $3,023,055 based upon the fair value of the Company’s common stock on the date of grant. The awards granted vest 25% on March 28, 2015 and then 25% annually until fully vested on March 28, 2018. Pursuant to the terms of the awards, the shares not vested terminate upon separation from the Company.
 
On August 14, 2014, the compensation committee of the board of directors granted to various employees and consultants, RSUs under which the holders have the right to receive 86,823 shares of the Company’s common stock. These awards were granted under the 2013 Equity Incentive Plan and the RSU’s had an aggregate grant date fair value of $981,100 based upon the fair value of the Company’s common stock on the date of grant. The awards granted vest over four years beginning on the first anniversary of the employee’s date of hire. Pursuant to the terms of the awards, the shares not vested terminate upon separation from the Company.
 
In addition, on August 14, 2014, the compensation committee of the board of directors granted two inducement RSU awards to Cesar Johnston, the Company’s Senior Vice President of Engineering. Under the first award, Mr. Johnston has the right to receive 100,000 shares of the Company’s common stock and this award vests over four years beginning on the first anniversary of his employment start date of July 14, 2014. In addition, Mr. Johnston was granted 20,000 performance based RSU awards. On February 26, 2015, the compensation committee of the board of director determined that Mr. Johnston had successfully met all conditions provided for in the performance based RSU award. The RSU’s had an aggregate grant date fair value of $1,356,000 based upon the fair value of the Company’s common stock on the date of grant. The awards granted vest over four years beginning on the first anniversary of the employee’s date of hire. Pursuant to the terms of the awards, the shares not vested terminate upon separation from the Company.
 
On November 13, 2014, the compensation committee of the board of directors granted inducement RSU awards to various employees and consultants, under which the holders have the right to receive 261,686 shares of the Company’s common stock. These inducement awards were not granted under a plan. These RSUs had an aggregate grant date fair value of $2,266,201 based upon the fair value of the Company’s common stock on the date of grant. Pursuant to the terms of the awards, the shares are not vested upon separation from the Company.
 
In addition, on November 13, 2014, the compensation committee of the board of directors granted to various employees and consultants, RSUs under which the holders have the right to receive 5,100 shares of the Company’s common stock. These awards were granted under the 2013 Equity Incentive Plan as an incentive reward for being a named inventor on one or more of the Company’s patent applications, and the RSUs had an aggregate fair value of $44,166 based upon the fair value of the Company’s common stock on the date of grant. Pursuant to the terms of the awards, the shares vested immediately upon grant and common stock delivery is one year from the related patent application date.
 
On December 24, 2014, the compensation committee of the board of directors granted inducement RSU awards to various employees and consultants, under which the holders have the right to receive 77,856 shares of the Company’s common stock. These inducement awards were not granted under a plan. These RSUs had an aggregate grant date fair value of $620,512 based upon the fair value of the Company’s common stock on the date of grant. The awards granted vest over four years beginning on the first anniversary of the employee’s date of hire. Pursuant to the terms of the awards, the shares not vested terminate upon separation from the Company.
 
On December 24, 2014, the compensation committee of the board of directors granted an RSU award to a consultant, under which the holder has the right to receive 5,000 shares of the Company’s common stock. This award was granted under the 2013 Equity Incentive Plan and had a grant date fair value of $39,850 based upon the fair value of the Company’s common stock on the date of grant. The awards granted vest over four years beginning on the first anniversary of the employee’s date of hire. Pursuant to the terms of the awards, the shares not vested terminate upon separation from the Company.
 
On January 2, 2015, the compensation committee of the board of directors granted to various directors, RSUs under which the holders have the right to receive an aggregate of 17,576 shares of the Company’s common stock. The awards granted vest fully on the first anniversary of the grant date. On June 23, 2015, one of the Company’s directors resigned and upon approval by the compensation committee of the board of directors, his RSU award of 4,394 shares became fully vested.
 
On January 22, 2015, the compensation committee of the board of directors granted to various employees and consultants, RSUs under which the holders have the right to receive an aggregate of 54,500 shares of the Company’s common stock. The awards granted were vested on the date of grant.
 
On February 26, 2015, the compensation committee of the board of directors granted to two employees RSUs under which the holders have the right to receive an aggregate of 6,800 shares of the Company’s common stock. The awards granted were vested on the date of grant.
 
On February 26, 2015, the compensation committee of the board of directors granted to Mr. Rizzone, the Company’s Chief Executive Officer, RSUs under which Mr. Rizzone has the right to receive 246,226 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of grant.
 
On February 26, 2015, the compensation committee of the board of directors granted to a member of the advisory board RSUs under which the holder has the right to receive 5,071 shares. The award vested 12.5% on March 31, 2015 and 12.5% on June 30, 2015. The grant was then cancelled when the advisory board member became a regular board member and received a new grant on July 1, 2015.
 
On May 21, 2015, the compensation committee of the board of directors granted to various employees and consultants inducement RSU awards under which the holders have the right to receive an aggregate of 205,081 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of hire.
 
On May 21, 2015, the compensation committee of the board of directors granted to Cesar Johnston, the Company’s Senior Vice President of Engineering, RSUs under which Mr. Johnston has the right to receive 1,500 shares of the Company’s common stock. This award was granted under the 2013 Equity Incentive Plan. The award granted vested fully on May 31, 2015.
 
On May 21, 2015, the compensation committee of the board of directors granted to two consultants RSUs under which the holders have the right to receive an aggregate of 7,042 shares of the Company’s common stock. These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted were fully vested on the date of grant.
 
On May 21, 2015, in connection with patent applications, the compensation committee of the board of directors granted to various employees RSUs under which the holders have the right to receive an aggregate of 6,300 shares of the Company’s common stock. These awards were granted under the 2013 Equity Incentive Plan. Of the awards granted, 2,100 RSUs became fully vested on December 29, 2015, 3,500 became fully vested on December 30, 2015 and 700 became fully vested on December 31, 2015.
 
On May 21, 2015, the compensation committee of the board of directors granted to John Gaulding, director and chairman of the board, RSUs under the 2014 Non-Employee Equity Compensation Plan for which Mr. Gaulding has the right to receive 25,000 shares of the Company’s common stock. These shares were issued to Mr. Gaulding in connection with his role as an independent director and chairman of the Board of Directors. The award granted vests fully on January 1, 2016.
 
On May 21, 2015, the compensation committee of the board of directors accelerated the vesting of 13,074 previously issued RSUs, held by certain employees and consultants, to vest on April 30, 2015.
 
On July 1, 2015, the Company appointed Martin Cooper to the Board of Directors with a term expiring at the Company’s 2016 annual stockholders meeting. In connection with Mr. Cooper’s appointment to the Board, Mr. Cooper was issued RSUs under the Company’s 2014 Non-Employee Equity Compensation Plan covering a total of 5,061 shares of Company common stock that will vest in full on January 4, 2016.
 
On July 13, 2015, the Company appointed Brian Sereda Vice President and Chief Financial Officer. As an inducement to join the Company, Mr. Sereda received an inducement restricted stock unit award covering a total of 120,000 shares of common stock. The restricted stock unit award vests in four equal annual installments on July 13 of each of 2016, 2017, 2018 and 2019, subject to Mr. Sereda’s continued employment with the Company through each vesting date.
 
On August 20, 2015, the compensation committee of the board of directors granted to three consultants RSUs under which the holders have the right to receive an aggregate of 8,854 shares of the Company’s common stock (of which 1,416 were granted to Martin Cooper). These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted were fully vested on the date of grant.
 
During August 2015, the compensation committee of the board of directors granted to various employees inducement RSU awards under which the holders have the right to receive an aggregate of 74,992 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of hire.
 
On October 22, 2015, the compensation committee of the board of directors granted to various employees 35,000 RSU awards under the 2013 Equity Incentive Plan for achievement of a customer milestone. The awards granted vested 50% on November 16, 2015 with the remaining 50% vesting on the one year anniversary of the grant date.
 
On December 17, 2015, the compensation committee of the board of directors granted Cesar Johnston and Michael Leabman each 12,500 RSU awards under the 2013 Equity Incentive Plan for achievement of a customer milestone. The awards granted will vest 50% on February 16, 2016 with the remaining 50% vesting on October 22, 2016.
 
On December 17, 2015, the compensation committee of the board of directors granted to various employees inducement RSU awards under which the holders have the right to receive an aggregate of 180,098 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of hire.
 
On December 17, 2015, the compensation committee of the board of directors granted to various employees RSU awards under the 2013 Equity Incentive Plan for promotions and merit increases under which the holders have the right to receive an aggregate of 121,032 shares of the Company’s common stock, of which 120,500 vest over four years and 532 vest immediately.
 
On December 17, 2015, the compensation committee of the board of directors granted to three consultants RSUs under which the holders have the right to receive an aggregate of 9,575 shares of the Company’s common stock (of which 1,330 were granted to Martin Cooper). These awards were granted under the 2014 Non-Employee Equity Compensation Plan. The awards granted were fully vested on the date of grant.
 
On December 28, 2015, the compensation committee of the board of directors granted a new employee an inducement RSU award under which the holder has the right to receive an aggregate 120,000 shares of the Company’s common stock. The awards granted vest over four years beginning on the first anniversary of the date of hire.
 
The Company accounts for RSUs granted to consultants using the accounting guidance included in ASC 505-50 “Equity-Based Payments to Non-Employees” (“ASC 505-50”). In accordance with ASC 505-50, the Company estimates the fair value of the unvested portion of the RSU award each reporting period using the closing price of the Company’s common stock.
 
At December 31, 2015, the unamortized value of the RSUs was $11,513,825. The unamortized amount will be expensed over a weighted average period of 3.2 years. A summary of the activity related to RSUs for the year ended December 31, 2015 is presented below:
 
 
 
 
 
Weighted
 
 
 
 
 
Average Grant
 
 
 
Total
 
Date Fair Value
 
Outstanding at January 1, 2014
 
 
-
 
$
-
 
RSUs granted
 
 
837,672
 
$
10.75
 
RSUs forfeited
 
 
(104,044)
 
$
12.57
 
RSUs vested
 
 
(6,349)
 
$
9.94
 
Outstanding at December 31, 2014
 
 
727,279
 
$
10.49
 
RSUs granted
 
 
1,274,707
 
$
8.23
 
RSUs forfeited
 
 
(135,199)
 
$
9.73
 
RSUs vested
 
 
(305,791)
 
$
9.89
 
Outstanding at December 31, 2015
 
 
1,560,996
 
$
8.83
 
 
 
 
 
 
 
 
 
Vested at January 1, 2014
 
 
-
 
 
-
 
RSUs vested
 
 
6,349
 
$
9.94
 
Shares of common stock issued in exchange for RSUs
 
 
-
 
$
-
 
Vested at December 31, 2014
 
 
6,349
 
$
9.94
 
RSUs vested
 
 
305,791
 
$
9.89
 
Shares of common stock issued in exchange for RSUs
 
 
(304,340)
 
$
 
 
Vested at December 31, 2015
 
 
7,800
 
$
7.94
 
 
Performance Share Units (“PSUs”)
 
Effective on May 21, 2015, the compensation committee of the board of directors granted to Stephan Rizzone PSUs under which Mr. Rizzone had the right to receive up to 639,075 shares of the Company’s common stock. The PSUs shall be earned based on the Company’s market capitalization growth (See Note 7).
 
On May 21, 2015, the compensation committee of the board of directors granted to its independent directors and executives, PSUs under which the holders have the right to receive up to 543,216 shares of the Company’s common stock. The PSUs shall be earned based on the Company’s achievement of market capitalization growth between the effective date of the Employment Agreement and the end of the Initial Employment Period. If the Company’s market capitalization is $100 million or less, no PSUs will be earned. If the Company reaches a market capitalization of $1.1 billion or more, 100% of the PSUs will be earned. For market capitalization between $100 million and $1.1 billion, the percentage of PSUs earned will be determined on a quarterly basis based on straight line interpolation.
 
On July 1, 2015, the Company appointed Martin Cooper to the Board of Directors with a term expiring at the Company’s 2016 annual stockholders meeting. In connection with Mr. Cooper’s appointment, he was granted PSUs under the Company’s 2015 Performance Share Unit Plan for which he is eligible to receive 31,954 shares of the Company’s common stock.
 
On December 17, 2015, the compensation committee of the board of directors granted to Brian Sereda PSUs under the Company’s 2015 Performance Share Unit Plan for which he is eligible to receive 63,908 shares of the Company’s common stock.
 
The Company determined that the PSUs were equity awards with both market and service conditions. The Company utilized a Monte Carlo simulation to determine the fair value of the market condition, as described below. Grantees of PSUs are required to be employed through December 31, 2018 in order to earn the entire award, if and when vested.
 
 
 
Performance Share
Units (PSUs) Granted
During the Year Ended
December 31, 2015
 
Market capitalization
 
$
106,270,000
 
Dividend yield
 
 
0
%
Expected volatility
 
 
60
%
Risk-free interest rate
 
 
0.95
%
 
The fair value of the grant of PSUs to purchase a total of 1,278,153 shares of common stock was determined to be approximately $3,351,353, and is to be amortized over the service period through December 31, 2018, on a straight-line basis. Amortization was $489,239, for the year ended December 31, 2015.
 
At December 31, 2015, the unamortized value of the PSUs was approximately $2,527,095. The unamortized amount will be expensed over a weighted average period of 3.0 years. A summary of the activity related to PSUs for the year ended December 31, 2015 is presented below:
 
 
 
 
 
Weighted
 
 
 
 
 
Average Grant
 
 
 
Total
 
Date Fair Value
 
Outstanding at January 1, 2015
 
 
-
 
$
-
 
PSUs granted
 
 
1,278,153
 
$
2.62
 
PSUs forfeited
 
 
(127,699)
 
$
2.62
 
PSUs vested
 
 
(14,840)
 
$
2.62
 
Outstanding at December 31, 2015
 
 
1,135,614
 
$
2.62
 
 
 
 
 
 
 
 
 
Vested at January 1, 2015
 
 
-
 
$
-
 
PSUs vested
 
 
14,840
 
$
2.62
 
Shares of common stock issued in exchange for PSUs
 
 
(1,072)
 
$
2.62
 
Vested at December 31, 2015
 
 
13,768
 
$
2.62
 
 
Employee Stock Purchase Plan (“ESPP”)
 
The initial offering period for the ESPP is July 1, 2015 through December 31, 2015. Through December 31, 2015, employees have contributed an aggregate of $289,787. As of December 31, 2015, 46,023 shares have been issued under this plan, with 553,977 shares reserved for future issuance.
 
The weighted-average grant-date fair value of the purchase option for each designated share purchased under this plan was approximately $2.46, which represents the fair value of the option, consisting of three main components: (i) the value of the discount on the enrollment date, (ii) the proportionate value of the call option for 85% of the stock and (iii) the proportionate value of the put option for 15% of the stock. The Company recognized compensation expense for the plan of $113,217 for the year ended December 31, 2015.
 
The Company estimated the fair value of the purchase options granted during the year ended December 31, 2015 using the Black-Scholes option pricing model. The fair values of the purchase options granted were estimated using the following assumptions:
 
 
 
Purchase Options Granted
 
 
 
July 1, 2015
 
Stock price
 
$
7.41
 
Dividend yield
 
 
0
%
Expected volatility
 
 
65
%
Risk-free interest rate
 
 
0.13
%
Expected life
 
 
6 months
 
 
Stock-Based Compensation Expense
 
The following tables summarize total stock-based compensation costs recognized for years ended December 31, 2015, 2014 and 2013:
 
 
 
For the Years Ended December 31,
 
 
 
2015
 
2014
 
2013
 
Stock options
 
$
1,037,399
 
$
1,333,943
 
$
16,148
 
RSUs
 
 
4,225,728
 
 
900,063
 
 
-
 
IR warrants
 
 
85,831
 
 
263,972
 
 
-
 
PSUs
 
 
489,239
 
 
-
 
 
-
 
ESPP
 
 
113,217
 
 
-
 
 
-
 
Shares issued to consultant for services rendered
 
 
-
 
 
50,000
 
 
-
 
Total
 
$
5,951,414
 
$
2,547,978
 
$
16,148
 
 
The total amount of stock-based compensation was reflected within the statements of operations as:
 
 
 
For the Years Ended December 31,
 
 
 
2015
 
2014
 
2013
 
Research and development
 
$
2,816,707
 
$
924,702
 
$
-
 
Sales and marketing
 
 
729,329
 
 
583,238
 
 
-
 
General and administrative
 
 
2,405,378
 
 
1,040,038
 
 
16,148
 
Total
 
$
5,951,414
 
$
2,547,978
 
$
16,148