Note 11 - Stock-Based Compensation

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

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

11.

Stock-Based Compensation 

Stock-Based Compensation Expense

. The following table sets forth the Company’s stock-based compensation expense (in thousands).

	Year Ended December 31,
	201 8		201 7		201 6
Stock options and ESPP awards
Research and development	$	21	$	37	$	62
Selling, general and administrative		48		122		321
Restricted stock awards
Research and development		-		12		116
Selling, general and administrative		-		17		143
Restricted stock units
Research and development		85		70		28
Selling, general and administrative		417		163		216
Stock appreciation rights
Research and Development		61		-		-
Selling, general and adminstrative		51		-		-
Total stock-based compensation	$	683	$	421	$	886

Determining Fair Value of Share-Based Payment Awards

.

The following table sets forth the Black-Scholes option pricing model assumptions and resulting grant date fair value for stock options granted. There were

no

stock options granted during the year ended

December 31, 2018.

	Year Ended December 31,
	201 8		201 7			201 6
Risk-free interest rate		–		2.01	%		1.49	%
Expected dividend yield		–		None			None
Expected volatility factor		–		119.00	%		106.70	%
Expected option life (in years)		–		5.77			5.77
Weighted average grant date fair value	$	–	$	0.86		$	5.66

Due to the Company’s limited history of grant activity, the expected life of options granted was estimated using the “simplified method” in accordance with SEC Staff Accounting Bulletin

110,

where the expected life equals the arithmetic average of the vesting term and the original contractual term of the options. The volatility factor was determined based upon management’s estimate using inputs from comparable public companies. The risk-free interest rate assumption is determined based upon observed interest rates appropriate for the expected term of the Company’s employee stock options. The dividend yield assumption is based on the Company’s history of dividend payouts.

An annual forfeiture rate is estimated at the time of grant for all share-based payment awards, and revised, if necessary, in subsequent periods if the actual forfeiture rate differs from the Company’s estimate. Forfeitures have been estimated by the Company based upon historical and expected forfeiture experience. Estimated forfeiture rates used for the periods presented were from

0%

to

5%.

Stock Option Award Activity

. Stock option activity under the Company’s option plans at

December 31, 2018

and changes during the year ended

December 31, 2018

were as follows.

						Weighted-
						Average
				Weighted-		Remaining
				Average		Contractual
	Number of			Exercise		Term		Aggregate
	Options			Price		(years)		Intrinsic Value
Options outstanding at December 31, 2017		2,346		$	2,103.20			$	-
Granted		–			–
Canceled or forfeited		(33	)		876
Exercised		-			-
Options outstanding at December 31, 2018		2,313		$	2,358.44		6.87	$	-
Options exercisable at December 31, 2018		1,922		$	2,545.98		6.61	$	-
Options vested and expected to vest at December 31, 2018		2,313		$	2,358.44		6.87	$	-

The aggregate intrinsic values in the table above represent the total pre-tax intrinsic values (the difference between the closing price of Gevo’s common stock on the last trading day of the

2018

 calendar year and the exercise price, multiplied by the number of in-the-money stock option shares) that would have been received by the option holders had all in-the-money outstanding stock options been exercised on

December 31, 2018.

The total intrinsic value of options exercised during the years ended

December 31, 2018,

2017,

and

2016

 was zero.  

The following table summarizes information associated with outstanding and exercisable stock options at

December 31, 2018.

			Options Outstanding						Options Exercisable
							Weighted-						Weighted-
					Weighted-		Average				Weighted-		Average
Range of					Average		Remaining				Average		Remaining
Exercise			Number of		Exercise		Contractual Life		Number of		Exercise		Contractual Life
Prices			Options		Price		in Years		Options		Price		in Years
$0.00	to	$11,484		2,246	$	475		7.06		1,855	$	569		6.82
$11,485	to	$22,968		18	$	17,869		1.14		18	$	17,869		1.14
$45,936	to	$57,420		13	$	56,460		0.21		13	$	56,460		0.21
$57,421	to	$68,904		18	$	60,457		0.18		18	$	60,457		0.18
$68,905	to	$80,348		7		76,020		1.66		7		76,020		1.66
$91,872	to	$103,356		8	$	98,442		0.91		8	$	98,442		0.91
$103,357	to	$114,840		3	$	106,001		<.01		3	$	106,001		<.01
				2.313	$	2,097		6.88		1,922	$	2,517.03		6.61

As of

December 31, 2018,

approximately

$0.01

 million of total unrecognized compensation cost related to stock options is expected to be recognized as an expense by the Company in the future over a weighted-average period of approximately

one

year.

There is a maximum contractual term of

10

years for the share options.  The Company settles stock option exercises with newly issued common shares.

No

tax benefits were realized by the Company in connection with these exercises as the Company maintains net operating loss carryforwards and has established a valuation allowance against the entire tax benefit.

Restricted Stock

. The Company periodically grants restricted stock awards to employees and directors. The vesting period for restricted stock awards granted

may

be based upon a service period or based upon the attainment of performance objectives. The Company recognizes stock-based compensation over the vesting period, generally

three

to

six

years, for awards that vest based upon a service period. For performance based restricted stock awards, the Company recognizes expense over the requisite service period.

Non-vested restricted stock awards at

December 31, 2018 

and changes during the year ended

December 31, 2018 

were as follows.

				Weighted-
				Average
	Number of			Grant-Date
	Shares			Fair Value
Non-vested at December 31, 2017		155		$	876.00
Granted		290,300			3.45
Vested		(155	)		876.00
Canceled or forfeited		-			-
Non-vested at December 31, 2018		290,300		$	3.45

The total fair value of restricted stock that vested during the years ended

December 31, 2018,

2017

 and

2016,

respectively, was

$0.5

 million,

$0.2

 million, and

$0.3

million, respectively. As of

December 31, 2018,

the total unrecgognized compensation expense, net of estimated forfeitures, relating to restricted stock awards was

$0.6

million, which is expected to be recognized over the remaining weighted-average period of approximately

seven

 months.

Stock Appreciation Rights. 

The Company granted

132,559

stock appreciation rights valued at an aggregate of

$0.6

million, on the respective dates of grant during the year ended

December 31, 2018.

The vesting period for stock appreciation rights granted are based upon a service period. The stock appreciation rights have the potential to be cash settled in the event there are insufficient shares available from the

2010

Plan and are therefore classified as a liability and remeasured at each reporting period.

The following table sets forth the Black-Scholes option pricing model assumptions and resulting grant date fair value for stock appreciation rights granted and at

December 31, 2018.

There were

no

stock appreciation rights granted during the years ended

December 31, 2017

and

2016.

 

	December 31, 2018			Grant Date(1)
Risk-free interest rate		2.54	%		2.84	%
Expected dividend yield		–			–
Expected volatility factor		134.17	%		125.03	%
Expected option life (in years)		5.75			5.75
Weighted average grant date fair value	$	1.65		$	4.53

(

1

) Stock appreciation rights were granted on

May 2, 2018

and

August 9, 2018.

The values reported above are the weighted-average grant date value. The weighted-average strike price was

$5.23

per share.