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 12. Stock Based Compensation

In connection with the approval of the Business Combination, the 2015 Omnibus Incentive Plan (the Plan) was approved by stockholders to provide incentives to key employees, directors, and consultants of the Company and its subsidiaries. Awards under the Plan are generally not restricted for any specific form or structure and could include, without limitation, stock options, stock appreciation rights, dividend equivalent rights, restricted stock awards, cash-based awards, or other right or benefit under the Plan. The Plan allowed for the lesser of (i) 1.60 million shares of common stock, or (ii) 8% of the outstanding common shares immediately following the consummation of the Business Combination as reserved and authorized for issuance under the Plan. At December 31, 2015, there were 1.57 million shares of common stock authorized and available for issuance under the Plan.

Upon completion of the Business Combination, the Company approved initial grants of non-qualified stock option awards under the Plan to the current independent members of the Board of Directors. The stock option awards expire in ten years from the date of grant and vest over a period of one year – 20% of the options will vest 30 days following the grant date, 40% of the options will vest six months following the grant date subject to the Director’s continued service and the remaining 40% of the options will vest 12 months following the grant date subject to the director’s continued service. The exercise price is required to be set at not less than 100% of the fair market value of the Company’s common stock. The total compensation expense related to the Plan was $0.03 million for the period from November 24, 2015 through December 31, 2015. The income tax benefit related to share-based compensation expense was nominal for the period from November 24, 2015 through December 31, 2015. As of December 31, 2015, $0.09 million of total unrecognized compensation expense related to the share-based compensation Plan is expected to be recognized over a weighted-average period of 0.92 years. The total unrecognized share-based compensation expense to be recognized in future periods as of December 31, 2015 does not consider the effect of share-based awards that may be issued in future periods.

 

The fair value of each option is estimated on the date of grant using the Black-Scholes model that uses the following assumptions:

Expected dividend yield		0	%
Risk-free interest rate		1.7	%
Expected option term		5.5 years
Volatility		75.4	%
Weighted-average fair value	$	3.46

The Company calculated the expected term of the stock option awards using the “simplified method” in accordance with the Securities and Exchange Commission Staff Accounting Bulletins No. 107 and 110 because the Company lacks historical data and is unable to make reasonable assumptions regarding the future. The Company also estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original projections. The Company’s assumptions with respect to stock price volatility are based on the average historical volatility of peers with similar attributes. The Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity rate.

Stock option awards as of December 31, 2015, and changes during the period from November 24, 2015 through December 31, 2015 were as follows:

					Weighted Average
			Weighted		Remaining
			Average		Contractual Term		Aggregate
	Options		Exercise Price		(Years)		Intrinsic Value
Outstanding, beginning of period		-	$	-
Granted		33,336		5.40
Exercised		-		-
Forfeited		-		-
Outstanding, end of period		33,336	$	5.40		9.92	$	-
Exercisable, end of period		-	$	-		-	$	-

There was no aggregate intrinsic value for the options outstanding and exercisable at December 31, 2015 because the exercise price exceeds the underlying share price as of December 31, 2015.