Share-Based Payments

12 Months Ended

Dec. 31, 2015

Share-Based Payments [Text Block]

11. Share-Based Payments

As of December 31, 2015, the Company has 1,734,429 options and 2,191,487 warrants outstanding to purchase shares of our common stock.

The following table provides the details of the approximate total share-based payments expense during the years ended December 31, 2015 and 2014:

		December 31,		December 31,
		2015		2014
Employees and directors share-based payments	$	1,091,000	$	1,340,000
Non-employee awards	$	150,000	$	-

The Company awards common stock and stock options to employees, non-employees and directors compensation for their services. The stock option awards to employees and directors are accounted for pursuant to the provisions of ASC 718, Compensation – 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.

(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 December 31, 2015, options available for issuance are 1,997,964 shares.

Stock option activity for the year ended December 31, 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	6.68	$	156,572
Granted	16,565			2.12
Exercised	(19,042	)		1.79
Expired	(17,356	)		1.80
Forfeited	(45,964	)		1.68
Outstanding at December 31, 2015	1,734,429		$	2.77	5.59	$	58,200
Vested and expected to be vested as of December 31, 2015	1,734,429		$	2.77	5.59	$	58,200
Options exercisable at December 31, 2015 (vested)	1,703,517		$	2.79	5.55	$	51,113

The weighted average grant-date fair value of options granted during the years ended December 31, 2015, and 2014, was $1.28 and $1.70. The total intrinsic value of options exercised during the years ended December 31, 2015, and 2014, was $6,192 and $27,820.

As of December 31, 2015, approximately $39,000 of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of approximately 1.6 years. The total fair value of shares vested during the years ended December 31, 2015 and 2014 was approximately $341,000 and $619,000, respectively.

The following table summarizes the assumptions used to estimate the fair values of the share options granted in the years presented:

	December 31,	December 31,
	2015	2014
Exercise multiple	2.12	2.52 ~ 2.91
Expected term	5.5 years	10 years
Expected volatility	70%	70%
Expected dividend yield	0%	0%
Risk free interest rate	1.56%	1.43%~ 2.66%
Fair value	1.28	1.33 ~ 2.23

(b) Warrants

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

As of December 31, 2015, the weighted average exercise price was $2.20 and the weighted average remaining life was 2.39 years. The following table outlines the warrants outstanding and exercisable as of December 31, 2015 and December 31, 2014:

	2015	2014
	Number of	Number of
	Warrants	Warrants		Exercise	Expiration
	Outstanding and	Outstanding and
Warrants Outstanding	Exercisable	Exercisable		Price	Date
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 derivative liabilities as disclosed in Note 10.