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v2.4.0.6
Stock-based Compensation
3 Months Ended
Mar. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-based Compensation
Stock-based Compensation
Under the terms of our 2011 Incentive Plan (Plan), our Board of Directors may grant awards to employees, officers, directors, consultants, agents, advisors and independent contractors. Awards may consist of stock options, stock appreciation rights, stock awards, restricted stock, stock units, performance awards or other stock or cash-based awards. Stock options are granted at the closing price of our common stock on the date of grant, and generally have a ten-year term and vest over a period of 48 months with the first 25% vesting one year from the grant date and monthly thereafter. Effective January 1, 2012, the total number of shares of common stock authorized for issuance under the Plan increased to 3,888,407 shares. As of March 31, 2012, there were 3,704,088 shares of unissued common stock authorized and available for issuance under the Plan.
Equity awards outstanding under the 2002 Stock Options and Restricted Stock Plan, which was terminated in May 2011, will remain outstanding in accordance with their existing terms.
(a)
Stock options:
A summary of our stock option activity is as follows:
 
Outstanding Options
 
Number of Shares
 
Weighted Average Exercise Price
Balance at January 1, 2011
1,789,784

 
$
1.96

Options granted
792,000

 
1.13

Options exercised
(25,288
)
 
0.68

Options cancelled/expired
(402,384
)
 
2.91

Balance at January 1, 2012
2,154,112

 
$
1.49

Options granted
190,000

 
0.51

Options exercised

 

Options cancelled/expired
(55,250
)
 
16.89

Balance at March 31, 2012
2,288,862

 
$
1.04

Exercisable, March 31, 2012
1,242,466

 
$
1.13

Vested and expected to vest
2,235,337

 
$
1.04


(b)
Restricted stock awards:
A summary of our restricted stock activity is as follows:
 
Restricted Shares
 
Weighted-Average Grant Date Fair Value
 
Weighted-Average Contractual Life
Non-vested restricted stock at January 1, 2011
158,581

 
$
1.52

 
9.44 yrs
Granted
108,626

 
0.63

 
 
Vested
(178,114
)
 
1.19

 
 
Cancelled/expired
(48,486
)
 
1.44

 
 
Non-vested restricted stock at January 1, 2012
40,607

 
$
0.68

 
9.69 yrs
Granted

 

 
 
Vested

 

 
 
Cancelled/expired
(5,681
)
 
0.68

 
 
Non-vested restricted stock at March 31, 2012
34,926

 
$
0.68

 
9.44 yrs
We had no shares withheld for the three months ended March 31, 2012. We withheld a total of 47,352 shares as payment for withholding taxes due in connection with the vesting of restricted stock awards issued under the 2002 Stock Option and Restricted Stock Plan for the three months ended March 31, 2011 and the average price paid per share of $1.32 reflects the average market value per share of the shares withheld for tax purposes.
(c) Stock-based compensation expense:
We recognize stock-based compensation expense using the straight-line attribution method over the employees’ requisite service periods. We recognize compensation expense for only the portions of stock options or restricted stock that are expected to vest. In estimating the options and shares that are expected to vest, we apply estimated forfeiture rates that are derived from historical termination behavior. If the actual number of forfeitures differs from those estimated by management, additional adjustments to stock-based compensation expense may be required in future periods.
At March 31, 2012, we had unrecognized compensation expense related to stock options and non-vested restricted stock of $555,000 and $14,000, respectively, to be recognized over weighted-average periods of 2.5 years and 0.9 years, respectively.
The following table summarizes the stock-based compensation expense (in thousands):
 
Three Months Ended March 31,
Type of awards:
2012
 
2011
Stock options
$
87

 
$
85

Restricted stock
3

 
90

 
$
90

 
$
175

Income statement account:
 

 
 

Promotion and selling
$
24

 
$
58

General and administrative
66

 
117

 
$
90

 
$
175

We employ the following key weighted-average assumptions in determining the fair value of stock options, using the Black-Scholes option pricing model and the provisions of Staff Accounting Bulletins (SAB) 107 and 110, which allow the simplified method to estimate the expected term of "plain vanilla" options:
 
Three Months Ended March 31,
 
2012
 
2011
Expected dividend yield

 

Expected stock price volatility
102.0
%
 
98.7
%
Risk-free interest rate
1.2
%
 
2.6
%
Expected term (in years)
6.1 years

 
6.0 years

Weighted-average grant date fair-value
$
0.41

 
$
1.12

During the quarter ended March 31, 2012, no material modifications were made to outstanding stock options.
The aggregate intrinsic value of stock options outstanding at March 31, 2012 and 2011 was $2,800 and $253,000 and for options exercisable was $11,000 and $278,000, respectively. The intrinsic value of outstanding and exercisable stock options is calculated as the closing market price of the stock at the balance sheet date less the exercise price of the option. The total intrinsic value of options exercised during the three months ended March 31, 2012 and 2011 was $0 and $13,000.