Quarterly report pursuant to Section 13 or 15(d)

Stock-based Compensation

v3.5.0.2
Stock-based Compensation
9 Months Ended
Aug. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
STOCK-BASED COMPENSATION STOCK-BASED COMPENSATION

On June 15, 2005, the shareholders approved an amended and Restated Stock Option Plan amending the 2003 Stock Option Plan (the “Plan”). The Plan authorizes the issuance of up to one million shares of common stock (subject to customary adjustments set forth in the plan) pursuant to equity awards, which may take the form of incentive stock options, nonqualified stock options restricted shares, stock appreciation rights and/or performance shares. The plan expired in April, 2015. On August 13, 2015, the shareholders approved the 2015 CCA Industries, Inc. Incentive Plan (the "2015 Plan"). The 2015 Plan authorizes the issuance of up to 700,000 shares of common stock (subject to customary adjustments set forth in the plan) pursuant to equity awards, which may take the form of incentive stock options, nonqualified stock options, stock appreciation rights and/or restricted stock.
On January 1, 2006, the Company adopted ASC Topic 718, "Stock Compensation" which requires an entity to recognize the grant-date fair value of stock options and other equity-based compensation issued to employees in the financial statements.
On December 1, 2015, the Company granted non-qualifed stock options under the Plan for 75,000 shares each to four directors: Sardar Biglari, Philip Cooley, Christopher Hogg and S. David Fineman. All options were granted at $3.16 per share. The closing price of the Company's stock on the date of grant was $3.16 per share. The options vest one year from the date of grant. The options expire on November 30, 2020. The Company has estimated the fair value of the options granted to be $263,550 as of the grant date, which amount shall be amortized as an expense over a one year period beginning December 1, 2015. The fair value of the stock option grants were estimated on the date of the grant using a Black-Scholes valuation model and the assumptions in the following table:
Option Grant Date
December 1, 2015
Assumptions:
 
Risk-free interest rate
1.19
%
Dividend yield

Stock volatility
39.39
%
Option Term (years)
5.0


On June 22, 2016, The Company granted a non-qualified stock option under the Plan for 75,000 shares to director Linda Shein. The option was granted at $3.35 per share. The option vests one year from the date of grant. The option expires on June 21, 2021. The Company has estimated the fair value of the option granted to be $90,075 as of the grant date, which amount shall be amortized as an expense over a one year period beginning June 2016. The Company also granted a total of 130,000 incentive stock options to seven of its employees on the same date at $3.35 per share. The incentive stock options vest in equal 20% increments commencing June 22, 2017 and for the four subsequent anniversaries of such date. The incentive stock options expire on June 21, 2026. The Company has estimated the fair value of the incentive stock options granted to be $202,904 as of the grant date, which amount shall be amortized over a five year period beginning June 2016. The fair value of the stock option granted to the director were estimated on the date of the grant using a Black-Scholes valuation model and the assumptions in the following table:
Option Grant Date
June 22, 2016
Assumptions:
 
Risk-free interest rate
1.20
%
Dividend yield

Stock volatility
36.43
%
Option Term (years)
5.0




The fair value of the stock options granted to the employees were estimated on the date of the grant using a Black-Scholes valuation model and the assumptions in the following table:
Option Grant Date
June 22, 2016
Assumptions:
 
Risk-free interest rate
1.20
%
Dividend yield

Stock volatility
36.43
%
Option Term (years)
10.0


The Company recorded a charge against earnings in the amount of $97,707 for the three months ended August 31 , 2016 and $23,897 for the three months ended August 31,$2,015.00 for all outstanding stock options granted. The Company recorded a charge against earnings in the amount of $238,684 and 82,536, respectively, for the nine months ended August 31, 2016 and August 31, 2015 for all stock options granted.
A summary of stock option activity for the Company is as follows:
 
Number of Options
Weighted-Average Exercise Price
Weighted-Average Remaining Term (years)
Aggregate Intrinsic Value
Outstanding at November 30, 2014
137,000

$
3.40

5.4


Granted
185,000

$
3.46


 
Exercised




Canceled or Forfeited
218,000

$
3.45



Outstanding at November 30, 2015
104,000

$
3.42

7.6


Granted
300,000

$
3.16



Exercised




Canceled or Forfeited




Outstanding at February 29, 2016
404,000

$
3.23

9.2


Granted

 
 
 
Exercised

 
 
 
Canceled or Forfeited

 
 
 
Outstanding at May 31, 2016
404,000

$
3.23

9.0

 
Granted
205,000

$
3.35

 
 
Exercised

 
 
 
Canceled or Forfeited
49,000

$
3.48

 
 
Outstanding at August 31, 2016
560,000

$
3.26

9.4