Share-Based Payments

9 Months Ended

Sep. 30, 2015

Share-Based Payments [Text Block]

11. Share-Based Payments

As of September 30, 2015, the Company had 1,721,096 options and 2,191,487 warrants outstanding to purchase shares of our common stock.

The Company awards common stock and stock options to employees and directors as compensation for their services, and accounts for its stock option awards to employees and directors pursuant to the provisions of ASC 718, Stock Compensation . The fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period.

Total share-based payments expense recorded by the Company during the three and nine months ended September 30, 2015 and 2014 is as follows:

		Three Months Ended				Nine Months Ended
		September 30		September 30		September 30		September 30
		2015		2014		2015		2014
Employees and directors share-based payments	$	287,000	$	912,000	$	968,000	$	1,133,000

(a) Stock Options

Effective as of December 3, 2010, our Board of Directors approved the YOU On Demand Holdings, Inc. 2010 Stock Incentive Plan (“the Plan”) pursuant to which options or other similar securities may be granted. The maximum aggregate number of shares of our common stock that may be issued under the Plan is 4,000,000 shares. As of September 30, 2015, options available for issuance are 2,011,297 shares.

Stock option activity for the nine months ended September 30, 2015 is summarized as follows:

					Weighted Average
					Remaining		Aggregated
	Options			Weighted Average	Contractual Life		Intrinsic
	Outstanding			Exercise Price	(Years)		Value
Outstanding at January 1, 2015	1,800,226		$	2.73
Granted	16,565			2.12
Exercised	(19,042	)		1.79
Expired	(30,689	)		1.89
Forfeited	(45,964	)		1.68
Outstanding at September 30, 2015	1,721,096		$	2.77	5.89	$	60,625
Vested and expected to vest as of September 30, 2015	1,721,096			2.77	5.89		60,625
Options exercisable at September 30, 2015 (vested)	1,674,156		$	2.80	5.83	$	52,188

The weighted average grant-date fair value of options granted during the nine months ended September 30, 2015 and 2014 was $1.28 and $1.70. The total intrinsic value of options exercised during the nine months ended September 30, 2015 and 2014 was $6,192 and $8,553.

As of September 30, 2015, approximately $78,000 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.44 years. The total fair value of shares vested during the nine months ended September 30, 2015 and 2014 was approximately $301,000 and $719,000 respectively.

(b) Warrants

In connection with the Company’s financings, the Warner Brother Agreement and the service agreements, the Company issued warrants to investors and service providers to purchase common stock of the Company.

As of September 30, 2015, the weighted average exercise price of the warrants was $2.20 and the weighted average remaining life was 2.64 years. The following table outlines the warrants outstanding and exercisable as of September 30, 2015 and December 31, 2014:

	September 30,	December 31,
	2015	2014
	Number of	Number of
	Warrants	Warrants		Exercise	Expiration
Warrants Outstanding	Outstanding	Outstanding		Price	Date
	and Exercisable	and Exercisable
May 2011 Warner Brothers Warrants	200,000	200,000	$	6.60	05/11/16
2011 Service Agreement Warrants	26,667	26,667	$	7.20	06/15/16
2012 August Financing Warrants (i)	536,250	536,250	$	1.50	08/30/17
2013 Broker Warrants (Series D Financing)	228,571	228,571	$	1.75	07/05/18
2013 Broker Warrants (Convertible Note)	114,285	114,285	$	1.75	11/04/18
2014 Broker Warrants (Series E Financing)	1,085,714	1,085,714	$	1.75	01/31/19
	2,191,487	2,191,487

(i) The warrants are classified as derivate liabilities in Note 10