| STOCK BASED COMPENSATION [Text Block] |
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6. |
STOCK BASED COMPENSATION
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Effective October 30, 2006 the Company adopted the following stock option and stock bonus plans which were replaced by the Incentive Stock Option Plan (the “2013 Plan”) that was issued in May, 2013.
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Incentive Stock Option Plan . The Company’s Incentive Stock Option Plan authorizes the issuance of shares of its Common Stock to persons that exercise options granted pursuant to the Plan. Only employees may be granted options pursuant to the Incentive Stock Option Plan. The option exercise price is determined by its directors but cannot be less than the market price of its common stock on the date the option is granted. The Company has reserved 1,000,000 common shares under this plan. No options have been issued under this plan as at August 31, 2013.
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Non-Qualified Stock Option Plan . SDI’s Non-Qualified Stock Option Plan authorizes the issuance of shares of its Common Stock to persons that exercise options granted pursuant to the Plans. SDI’s employees, directors, officers, consultants and advisors are eligible to be granted options pursuant to the Plans, provided however that bona fide services must be rendered by such consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. By a resolution of the Board of Directors, the Company amended this plan to increase the number of common shares available under this plan from 2,250,000 to 4,500,000 effective October 10, 2007. The Company further amended its Non-Qualified Stock Option Plan to increase the number of Common Shares available under this plan to 5,000,000 and filed an S-8 registration statement on April 10, 2008.
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Stock Bonus Plan . SDI’s Stock Bonus Plan allows for the issuance of shares of common stock to its employees, directors, officers, consultants and advisors. However bona fide services must be rendered by the consultants or advisors and such services must not be in connection with the offer or sale of securities in a capital-raising transaction. The Company has reserved 150,000 common shares under this plan. No options have been issued under this plan as at November 30, 2013.
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Effective May 31, 2013, the Company adopted an incentive stock option plan (the “2013 Plan”), which replaces the stock option and stock bonus plans that were in place prior to adoption of the 2013 Plan. All outstanding options to purchase Common Shares granted by the Company under the prior plans are now governed by the 2013 Plan and the prior plans (an Incentive Stock Option Plan, a Non-Qualified Stock Option Plan, and a Stock Bonus Plan) have been terminated.
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Year ended November 30, 2013
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The Company did not issue any options during the year ended November 30, 2013.
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As of November 30, 2013 there was $Nil of unrecognized expense related to non-vested stock-based compensation arrangements granted.
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Year ended November 30, 2012
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On January 4, 2012, the board of directors granted options to three directors to acquire a total of 775,000 common shares, one officer to acquire 20,000 common shares and two consultants to acquire a total of 110,000 common shares. The 905,000 options were issued at an exercise price of $0.13 per share and vest immediately with an expiry term of four years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black-Scholes option pricing model with the following assumptions:
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Risk free rate |
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2.00% |
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Expected dividends |
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0% |
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Forfeiture rate |
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0% |
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Volatility |
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206.87% |
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Market price of Company’s common stock on date of grant of options |
$ |
0.13 |
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Stock-based compensation cost |
$ |
113,292 |
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On September 19, 2012 the board of directors approved the exchange of the 905,000 stock options issued on January 4, 2012, to 905,000 warrants on terms identical to the terms of the existing stock options in the Company effective October 8, 2012. This exchange did not result in any additional impact on the statement of operations.
On March 9, 2012, all of the issued and outstanding stock options for common shares in the Company’s capital stock previously issued to Elad, Ilan Shalev and Haim Danon (being principals of Elad) were exchanged into warrants on terms identical to the terms of the existing stock options in the Company.
On October 3, 2012, the board of directors granted options to two consultants to acquire 100,000 common shares each for a total of 200,000 common shares. The 200,000 options were issued at an exercise price of $0.42 per share and vest immediately with an expiry term of three years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black-Scholes option pricing model with the following assumptions:
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Risk free rate |
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1.50% |
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Expected dividends |
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0% |
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Forfeiture rate |
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0% |
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Volatility |
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199.60% |
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Market price of Company’s common stock on date of grant of options |
$ |
0.42 |
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Stock-based compensation cost |
$ |
77,096 |
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On October 26, 2012, the board of directors granted options to one director to acquire a total of 1,000,000 common shares and to another director to acquire 100,000 common shares for a total of 1,100,000 options. These 1,100,000 options were issued at an exercise price of $0.45 per share and vest immediately with an expiry term of four years. The fair value of each option used for the purpose of estimating the stock compensation is calculated using the Black-Scholes option pricing model with the following assumptions:
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Risk free rate |
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1.65% |
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Expected dividends |
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0% |
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Forfeiture rate |
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0% |
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Volatility |
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217.15% |
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Market price of Company’s common stock on date of grant of options |
$ |
0.50 |
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Stock-based compensation cost |
$ |
534,905 |
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As of November 30, 2012 there was $Nil of unrecognized expense related to non-vested stock-based compensation arrangements granted.
The following table summarizes the options outstanding under the Stock Option Plan:
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Number of options |
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2013 |
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2012 |
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Outstanding, beginning of year |
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1,660,000 |
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1,450,000 |
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Granted |
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- |
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2,205,000 |
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Expired |
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(150,000 |
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(40,000 |
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Exercised |
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- |
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- |
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Forfeited |
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- |
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- |
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Cancelled/exchanged for warrants* |
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- |
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(1,955,000 |
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Outstanding, end of year |
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1,510,000 |
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1,660,000 |
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Exercisable, end of year |
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1,510,000 |
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1,660,000 |
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* Includes 1,755,000 options exchanged for 1,755,000 warrants on terms identical to the terms of the existing stock options in the Company. Includes 200,000 options cancelled on the resignation of two directors.
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Option price |
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Number of options |
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Expiry date
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per share |
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2013 |
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June 30, 2014 |
$ |
0.25 |
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175,000 |
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June 15, 2015 |
$ |
0.20 |
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35,000 |
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October 2, 2015 |
$ |
0.42 |
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200,000 |
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October 25, 2016 |
$ |
0.45 |
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1,100,000 |
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TOTAL |
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1,510,000 |
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Weighted average exercise price: |
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Options outstanding at end of year |
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$ |
0.42 |
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Options granted during the year |
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- |
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Options exercised during the year |
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- |
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Options expired during the year |
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0.50 |
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Options cancelled during the year |
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- |
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Option price |
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Number of options |
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Expiry date
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per share |
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2012 |
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April 11, 2013 |
$ |
0.50 |
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150,000 |
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June 30, 2014 |
$ |
0.25 |
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175,000 |
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June 15, 2015 |
$ |
0.20 |
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35,000 |
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October 2, 2015 |
$ |
0.42 |
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200,000 |
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October 25, 2016 |
$ |
0.45 |
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1,100,000 |
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TOTAL |
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1,660,000 |
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Weighted average exercise price: |
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Options outstanding at end of year |
$ |
0.42 |
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Options granted during the year |
$ |
0.32 |
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Options exercised during the year |
$ |
- |
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Options expired during the year |
$ |
0.50 |
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Options cancelled during the year |
$ |
0.19 |
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The share options outstanding at the end of the year had a weighted average remaining contractual life as follows:
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2013 |
2012 |
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(Years) |
(Years) |
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Total outstanding options |
2.6 |
3.2 |
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Total exercisable options |
2.6 |
3.2 |
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