D. STOCK AWARDS AND THEIR TREATMENT

9 Months Ended

Sep. 30, 2014

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

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

Restricted stock awards were granted in the form of restricted shares of common stock (“RSAs”) subject to a “Liquidity Event” and time-based vesting. The merger with Pyramid Oil Company that closed on September 10, 2014 was a “Liquidity Event” within the Company’s stock award agreements. This event removed that requirement for vesting, and now each award will vest in accordance with its time-based vesting schedule, typically in equal amounts per year over three years, subject to continued service as an employee or director of the Company.

A summary of the status of the RSAs and changes for the year to date ended September 30, 2014 is presented below.

	Number of	Weighted
	Unvested	Average
	RSA	Grant-Date
	Shares	Fair Value
Unvested shares as of January 1, 2014	1,895,602	$3.42 per share
Granted on March 6, 2014	196,148	$3.89 per share
Granted on April 1, 2014	33,322	$3.89 per share
Granted on May 20, 2014	341,554	$3.96 per share
Vested	(107,291)	$3.08 per share
Forfeited	-
Unvested shares as of September 30, 2014	2,359,335	$3.56 per share

Pyramid Oil Company issued stock options as compensation for non-employee members of its board of directors under the Pyramid Oil Company 2006 Equity Incentive Plan. The options vested immediately, are exercisable for a five-year period from the date of the grant.

The following is a summary of the Company’s stock option activity.

			Weighted-
		Weighted-	Average
		Average	Remaining	Aggregate
		Exercise	Contractual	Intrinsic
	Options	Price	Life (Years)	Value
Outstanding at December 31, 2013	105,000	$ 5.17	4.66	$ -
Granted	-	-	-	-
Exercised	-	-	-	-
Forfeited	-	-	-	-
Outstanding at September 30, 2014	105,000	$ 5.17	3.91	$ -
Vested and expected to vest at
September 30, 2014	105,000	$ 5.17	3.91	$ -
Exercisable at September 30, 2014	105,000	$ 5.17	3.91	$ -

As of September 30, 2014, there were no unvested stock options or unrecognized stock option expenses.

The following table summarizes the information about stock options outstanding and exercisable at September 30, 2014.

	Options Outstanding			Options Exercisable
		Weighted-	Weighted		Weighted
		Average	Average		Average
Exercise	Number of	Remaining	Exercise	Number of	Exercise
Price	Shares	Life (Years)	Price	Shares	Price
$ 5.40	5,000	1.67	$ 5.40	5,000	$ 5.40
$ 5.16	100,000	4.02	$ 5.16	100,000	$ 5.16
	105,000			105,000

On April 1, 2013, the Company granted 163 Restricted Stock Units or “RSUs” to employees. Based on the exchange ratio of the merger, the RSUs converted into 123,446 RSUs. Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting.  In order to vest, an employee must have continuous service with the Company from time of the grant through April 1, 2016, the vesting date. The RSUs may be settled in cash and do not require the eventual issuance of common stock (although it is an election available to the Company); consequently, the awards are liability-based and the booked valuation will change as the market value for common stock changes. The Company utilized a Monte Carlo simulation option pricing model prepared by an outside consulting firm to value the RSUs from inception through June 30, 2014, and utilized a Black Scholes option pricing model prepared by an outside consulting firm at September 30, 2014. Compensation expense is recognized over the three-year vesting period.

A summary of the status of the unvested RSUs and changes during the nine months ended September 30, 2014 is presented below.

		Weighted
	Number of	average
	Unvested	grant-date
	RSUs	fair value
Unvested shares as of January 1, 2014	119,659	$2.72 per share
Forfeited	(24,235)	$2.72 per share
Unvested shares as of September 30, 2014	95,424	$2.72 per share