Note 3 - Stock-based Compensation Plans and Warrants

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

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

NOTE

3

– STOCK-BASED COMPENSATION PLANS AND WARRANTS

The Company has issued options and has granted stock awards pursuant to its

2009

Equity Incentive Plan and

2014

Equity Incentive Plan, as described below.

2009

Equity Incentive Plan

The

2009

Equity Incentive Plan was approved by stockholders at the

2009

Annual Meeting. The plan provides for the grant and issuance of up to

850,000

shares and options to the Company’s employees and consultants. The plan became effective when the Company filed a registration statement on Form S-

8

on

December

18,

2009.

All options issued under the

2009

Equity Incentive Plan have a

ten

-year term with vesting periods ranging from issuance date to

24

months. 

2014

Equity Incentive Plan

The

2014

Equity Incentive Plan was approved by stockholders at the

June

10,

2014

Annual Meeting. The plan provides for the grant and issuance of up to

675,000

shares and options to the Company’s employees, directors and consultants. Upon approval of the

2014

Equity Incentive Plan, all shares of common stock that remained available for award under the

2009

Equity Incentive Plan were cancelled. Following registration of the

2014

Plan on Form S-

8,

the Company entered into revised employment agreements with certain senior management that provide for the issuance of up to

162,500

Restricted Stock Units (“RSU’s”) during the period

July

1,

2014

through

December

31,

2016

and the issuance of up to

200,000

RSU’s in connection with obtaining construction financing for the Water Project (“Milestone RSUs”). We concluded the performance condition related to the Milestone RSUs, which required us to obtain construction financing, was probable as of

March

31,

2017,

and we recorded stock compensation of

$1.7

million to reflect the issuance of these shares.

Under the

2014

Equity Incentive Plan, each outside director receives

$30,000

of cash compensation and receives a deferred stock award consisting of shares of the Company’s common stock with a value equal to

$20,000

on

June

30

of each year. The award accrues on a quarterly basis, with

$7,500

of cash compensation and

$5,000

of stock earned for each fiscal quarter in which a director serves. The deferred stock award vests automatically on

January

31

in the year following the award date.

All options that have been issued under the above plans have been issued to officers, employees and consultants of the Company. In total, options to purchase

507,500

shares were unexercised and outstanding on

March

31,

2017,

under the

two

equity incentive plans.

The Company recognized no stock option related compensation costs in each of the

three

months ended

March

31,

2017

and

2016.

Additionally, no options were exercised during the

three

months ended

March

31,

2017.

Stock Awards to Directors, Officers, and Consultants

The Company has granted stock awards pursuant to its

2009

Equity Incentive Plan and

2014

Equity Incentive Plan.

Of the total

850,000

shares reserved under the

2009

Equity Incentive Plan,

115,000

restricted shares of common stock were granted on

January

14,

2010,

and

140,000

restricted shares of common stock were granted on

January

10,

2011.

Of the remaining

595,000

shares reserved under the

2009

Equity Incentive Plan,

42,265

shares of common stock were awarded to directors and

507,500

were issued as options as described above as of

March

31,

2017.

Upon approval of the

2014

Equity Incentive Plan in

June

2014,

45,235

shares remaining available for award under the

2009

Equity Incentive Plan were cancelled.

               

Under the

2014

Equity Incentive Plan,

580,460

shares have been awarded to the Company directors, consultants and employees as of

March

31,

2017.

Of the

580,460

shares awarded,

17,365

shares were awarded to the Company’s directors for services performed during the plan year ended

June

30,

2016.

These shares became effective on that date and vested on

January

31,

2017.

The Company recognized stock-based compensation costs of

$1,816,000

and

$165,000

for the

three

months ended

March

31,

2017

and

2016,

respectively.