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SEC Filings

10-K/A
BIOTIME INC filed this Form 10-K/A on 03/29/2017
Entire Document
 

As of December 31, 2016, there were 2,318,821 shares reserved for future awards. Restricted stock and RSUs are counted against the available for grant pool two to one.

Stock-Based Compensation Expense

The weighted-average estimated fair value of stock options granted during the years ended December 31, 2016, 2015 and 2014 was $3.53, $2.92, and $1.50 per share respectively, using the Black-Scholes-Merton model with the following weighted-average assumptions:

   
Years Ended December 31,
 
   
2016
   
2015
   
2014
 
Expected life (in years)
 
$
5.81
   
$
6.10
   
$
3.98
 
Risk-free interest rates
   
1.37
%
   
1.74
%
   
1.31
%
Volatility
   
74.89
%
   
77.78
%
   
83.49
%
Dividend yield
   
0
%
   
0
%
   
0
%

The risk-free rate is based on the rates in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to each grant’s expected life. A dividend yield of zero is applied since Asterias has not historically paid dividends and does not expect to pay dividends in the foreseeable future. The expected volatility is based upon the volatility of Asterias’ own trading stock and of a group of publicly traded industry peer companies. The expected term of options granted is derived from a combination of Asterias historical experience, to the extent available, and using the simplified method under SEC Staff Accounting Bulletin Topic 14.

Stock-based compensation expense is recognized based on awards that are ultimately expected to vest, and as a result, the amount has been reduced by estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures are estimated based on Asterias’ historical experience and future expectations.

The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If Asterias had made different assumptions, its stock-based compensation expense, and net loss for years ended December 31, 2016, 2015 and 2014, may have been significantly different.

Asterias does not recognize deferred income taxes for incentive stock option compensation expense, and records a tax deduction only when a disqualified disposition has occurred.

Operating expenses include stock-based compensation expense as follows (in thousands):

   
Year Ended December 31,
 
   
2016
   
2015
   
2014
 
Research and development
 
$
2,655
   
$
1,604
   
$
478
 
General and administrative
   
2,142
     
2,021
     
1,336
 
Total stock-based compensation expense
 
$
4,797
   
$
3,625
   
$
1,814
 

At December 31, 2016 and 2015, Asterias had $7.3 million and $6.7 million, respectively, of total unrecognized compensation expense, net of estimated forfeitures, related to the Plan that will be recognized over a weighted-average period of approximately 3.4 and 2.4 years, respectively.

8. Commitments and Contingencies

Development and Manufacturing Services Agreement

On August 3, 2016, Asterias entered into a Development and Manufacturing Services Agreement (the “Services Agreement”) with Cognate BioServices, Inc. (“Cognate”), a fully-integrated contract bioservices organization providing development and cGMP manufacturing services to companies and institutions engaged in the development of cell-based products.
 
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