Quarterly report pursuant to Section 13 or 15(d)

5. Stock-based compensation

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5. Stock-based compensation
9 Months Ended
Sep. 30, 2016
Stock-based Compensation  
5. Stock-based compensation

Fusion's stock-based compensation plan provides for the issuance of stock options to the Company’s employees, officers, and directors. The Compensation Committee of Fusion’s Board of Directors (the "Compensation Committee") approves all awards under Fusion's stock-based compensation plan.

 

The following weighted average assumptions were used to determine the fair value of the stock options granted under Fusion’s stock-based compensation plan using the Black-Scholes option-pricing model:

 

    Nine months ended September 30,  
    2016     2015  
Dividend yield (%)*     0.0       0.0  
Expected volatility (%)     92.4       125.4  
Average Risk-free interest rate (%)     1.56       1.70  
Expected life of stock option term (years)     8.0       7.6  

 

*The dividend yield is zero as the Company has never paid and does not expect to pay dividends on its common stock.

 

The Company recognized compensation expense of approximately $194,000 and $154,000 for the three months ended September 30, 2016 and 2015, respectively, and $573,000 and $393,000 for the nine months ended September 30, 2016 and 2015, respectively. These amounts are included in selling, general and administrative expenses in the condensed consolidated interim statements of operations.

 

The following table summarizes the stock option activity for the nine months ended September 30, 2016:

 

    Number of Options     Weighted Average Exercise Price  
Balance at December 31, 2015     1,158,251     $ 4.96  
Shares granted during the period     86,050       1.79  
Shares exercised during the period     -       -  
Shares forfeited during the period     (67,235 )     2.50  
Shares expired during the period     (19,554 )     72.11  
Shares outstanding at September 30, 2016     1,157,512       3.73  
Shares exercisable at September 30, 2016     421,673     $ 5.77  

 

As of September 30, 2016, the Company had approximately $1.0 million of unrecognized compensation expense, net of estimated forfeitures, related to stock options granted under the Company’s stock-based compensation plan, which is expected to be recognized over a weighted-average period of 1.56 years.

 

Restricted Stock

 

During the nine months ended September 30, 2016, Fusion awarded 55,000 shares of its restricted common stock to its Chief Financial Officer. The restricted stock granted was valued at the closing stock price on the day employment commenced and vests in three equal installments on the first, second and third anniversary of employment. For the three and nine months ended September 30, 2016, the Company recognized compensation expense of approximately $8,300 and $17,000, respectively, and has unamortized compensation of $82,960.