Note 9. STOCK OPTIONS
Greystone has a stock option plan that provides for the granting of options to key employees and non-employee directors. The options are to purchase common stock at not less than fair market value at the date of the grant. Effective May 5, 2012, Greystone's board of directors approved the renewal and extension of Greystone's stock option plan through May 11, 2021 and increased the maximum number of shares of common stock for which options may be granted to 2,500,000 of which 25,000 were available for grant at May 31, 2013. Stock options generally expire in ten years from date of grant or upon termination of employment and are generally exercisable one year from date of grant in cumulative annual installments of 25%. Following is a summary of option activity for the two years ended May 31, 2013:
|
|
| Number |
| Weighted Average Exercise Price |
| Remaining Contractual Life (years) |
| Intrinsic Value |
| Total outstanding, May 31, 2012 |
| 1,400,000 |
| $0.53 |
|
|
|
|
| Awarded during fiscal 2013 |
| 2,100,000 |
| $0.12 |
|
|
|
|
| Expired during fiscal year 2013 |
| (1,050,000) |
| $0.61 |
|
|
|
|
| Total outstanding May 31, 2013 |
| 2,450,000 |
| $0.16 |
| 7.8 |
|
|
| Exercisable as of May 31, 2013 |
| 875,000 |
| $0.23 |
| 5.7 |
| $ 99,750 |
| Non-vested as of May 31, 2013 |
| 1,575,000 |
| $0.12 |
| 9.0 |
| $299,250 |
Effective June 1, 2012, Greystone's board of directors authorized the issuance of stock options to employees and members of the board of directors to purchase 2,100,000 shares of common stock at $0.12 per share with the options exercisable at the rate of 25% per year for the first four years and an expiration date of May 31, 2022. The value of Greystone's common stock on June 1, 2012 was $0.105 per share. In addition effective June 1, 2012, the board of directors with the concurrence of awardees cancelled stock options to purchase 500,000 shares of common stock which had an expiration date of February 28, 2014 and an option price of $0.40 per share.
The estimated fair value at the date of the grant for stock options utilizing the Black-Scholes option valuation model and the assumptions that were used in the Black-Scholes option model for fiscal year 2013 are as follows:
| Estimated fair value of options at date of grant | $213,696 |
| Black-Scholes model assumptions |
|
| Average expected life (years) | 5 |
| Average expected volatility factor | 353.3% |
| Average risk-free interest rate | 3.0% |
| Average expected dividend yields | $-0- |
Share-based compensation cost was $53,424 and $-0- for fiscal years 2013 and 2012, respectively. As of May 31, 2013, the unrecognized compensation expense related to non-vested share-based options was $160,272. This unrecognized compensation expense as of May 31, 2013 will be amortized equally over the remaining vesting period of 3 years.