Note 10 - Share-based Payments

6 Months Ended

Jun. 30, 2019

Disclosure of share-based payment arrangements [text block]

10.	SHARE-BASED PAYMENTS

December 2017,

the Company amended its stock option plan (the

“2017

Plan”). The

2017

Plan was established to provide an incentive to management (officers), employees, directors and consultants of the Company and its subsidiaries. The maximum number of shares which

may

be reserved for issuance under the

2017

Plan is limited to

7,105,838

shares less the number of shares reserved for issuance pursuant to options granted under the

1996

Plan, the

2000

Plan, the

2005

Plan, the

2009

Plan and the

2011

Plan, provided that the Board of Directors of the Company has the right, from time to time, to increase such number subject to the approval of the relevant exchange on which the shares are listed and the approval of the shareholders of the Company.

The maximum number of common shares that

may

be reserved for issuance to any

one

person under the

2017

Plan is

of the common shares outstanding at the time of the grant (calculated on a non-diluted basis) less the number of shares reserved for issuance to such person under any option to purchase common shares of the Company granted as a compensation or incentive mechanism.

The exercise price of each option cannot be less than the market price of the shares on the day immediately preceding the day of the grant less any permitted discount. The exercise period of the options granted cannot exceed

years. Options granted under the

2017

Plan do

not

have any required vesting provisions. However, the Board of Directors of the Company

may,

from time to time, amend or revise the terms of the

2017

Plan or

may

terminate it at any time.

The following summarizes the options outstanding:

	Number of Options			Weighted Average Exercise Price		Warrant Remaining Contract Life (Yrs)
Outstanding as at January 1, 201 8		3,999,000		$	0.21		2.77
Forfeited		(18,000	)		0.23
Outstanding as at June 30 , 201 8		3,981,000		$	0.21		2.51
Granted		2,920,000			0.07
Expired		(25,000	)		0.23
Forfeited		(72,000	)		0.23
Outstanding as at December 31, 201 9		6,804,000		$	0.18		2.26
Granted		1,050,000			0.08
Forfeited		(1,092,000	)		0.22
Outstanding as at June 30 , 201 9		6,762,000		$	0.13		2.03


Options exercisable as at June 30 , 201 8	3,321,000	$	0.21
Options exercisable as at December 31, 201 8	4,566,000	$	0.19
Options exercisable as at June 30 , 201 9	5,162,002	$	0.14

The weighted average remaining contractual life for the stock options outstanding as at

June 30, 2019

was

2.03

years (

2018

–

2.51

years). The range of exercise prices for the stock options outstanding as at

June 30, 2019

was

$0.07

$0.23

(

2018

$0.20

$0.23

). The weighted average grant-date fair value of options granted to management, employees, directors and consultants during period has been estimated at

$0.05

(

2018

$0.12

) using the Black-Scholes option-pricing model. The estimated fair value of the options granted is expensed immediately.

The vesting period on the options granted on

February 4, 2019

will be vested

three

months after grant date and will be vested quarterly.

The vesting period on the options granted on

May 13, 2019

will be vested

three

months after grant date and will be vested quarterly.

The vesting periods on the options granted on

December 20, 2018

are as follows,

25%

vest on

November 20, 2018,

the remaining vest quarterly over

months, commencing

three

months after grant date.

The pricing model assumes the weighted average risk free interest rates of

1.62%

(

2018

–

1.39

) weighted average expected dividend yields of

Nil

(

2018

–

Nil

), the weighted average expected common stock price volatility (based on historical trading) of

111%

(

2018

–

97%

) a forfeiture rate of zero, a weighted average stock price of

$0.29,

a weighted average exercise price of

$0.08,

and a weighted average expected life of

years (

2018

–

years), which were estimated based on past experience with options and option contract specifics.

LINGO MEDIA CORP 6-K