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GTF » Topics » Stock-Based Compensation

These excerpts taken from the GTF 10-K filed Mar 31, 2009.

Stock-Based Compensation

Under the Company’s Long Term Incentive Plan (the “LTIP”), it grants share-based awards to eligible employees, directors, and service providers to purchase shares of common stock. The fair values of these awards are determined on the dates of grant or issuance and are recognized as expense over the service periods.

For the years ended December 31, 2008 and 2007, the Company recognized $592,000 and $350,000, respectively, of compensation expense for stock issued and stock options granted under the LTIP. At December 31,

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2008, there was $486,000 remaining in unrecognized compensation cost related to stock options under the LTIP, which is expected to be recognized over a weighted average period of one year.

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing method (Black-Scholes method). The determination of fair value using this model requires the use of certain estimates and assumptions that affect the reported amount of compensation cost recognized in the Company’s Statements of Operations. These include estimates of the expected term of the option, expected volatility of the Company’s stock price, expected dividends and the risk-free interest rate. These estimates and assumptions are highly subjective and may result in materially different amounts should circumstances change and the Company employ different assumptions in future periods. The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.

For share-based awards issued during the year ended December 31, 2008 and 2007, the expected term was estimated by using peer company information as Cytomedix’s history is limited. Estimated volatility was derived using the Company’s historical stock price volatility. No cash dividends have ever been declared or paid on the Company’s Common stock and currently none is anticipated. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.

In certain select cases, the Company has issued warrants, outside the LTIP, to service providers in exchange for the performance of consulting or other services. These warrants have generally been immediately vesting and expense was recognized equal to the fair value of the warrant on the date of grant using the Black-Scholes model. The same assumptions (and related risks) as discussed above apply, with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term. For the years ended December 31, 2008 and 2007, the Company recognized $135,000 and $1,014,000, respectively, of compensation expense for warrants issued to service providers. At December 31, 2008, there was no remaining unrecognized compensation cost related to warrants.

Stock-Based Compensation

Under the Company’s Long Term Incentive Plan (the “LTIP”), it grants share-based awards to eligible employees, directors, and service providers to purchase shares of common stock. The fair values of these awards are determined on the dates of grant or issuance and are recognized as expense over the service periods.

For the years ended December 31, 2008 and 2007, the Company recognized $592,000 and $350,000, respectively, of compensation expense for stock issued and stock options granted under the LTIP. At December 31,

28

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2008, there was $486,000 remaining in unrecognized compensation cost related to stock options under the LTIP, which is expected to be recognized over a weighted average period of one year.

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing method (Black-Scholes method). The determination of fair value using this model requires the use of certain estimates and assumptions that affect the reported amount of compensation cost recognized in the Company’s Statements of Operations. These include estimates of the expected term of the option, expected volatility of the Company’s stock price, expected dividends and the risk-free interest rate. These estimates and assumptions are highly subjective and may result in materially different amounts should circumstances change and the Company employ different assumptions in future periods. The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.

For share-based awards issued during the year ended December 31, 2008 and 2007, the expected term was estimated by using peer company information as Cytomedix’s history is limited. Estimated volatility was derived using the Company’s historical stock price volatility. No cash dividends have ever been declared or paid on the Company’s Common stock and currently none is anticipated. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.

In certain select cases, the Company has issued warrants, outside the LTIP, to service providers in exchange for the performance of consulting or other services. These warrants have generally been immediately vesting and expense was recognized equal to the fair value of the warrant on the date of grant using the Black-Scholes model. The same assumptions (and related risks) as discussed above apply, with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term. For the years ended December 31, 2008 and 2007, the Company recognized $135,000 and $1,014,000, respectively, of compensation expense for warrants issued to service providers. At December 31, 2008, there was no remaining unrecognized compensation cost related to warrants.

Stock-Based Compensation

Under the Company’s Long Term Incentive Plan (the “LTIP”), it grants share-based awards to eligible employees, directors, and service providers to purchase shares of common stock. The fair values of these awards are determined on the dates of grant or issuance and are recognized as expense over the service periods.

For the years ended December 31, 2008 and 2007, the Company recognized $592,000 and $350,000, respectively, of compensation expense for stock issued and stock options granted under the LTIP. At December 31,

28

TABLE OF CONTENTS

2008, there was $486,000 remaining in unrecognized compensation cost related to stock options under the LTIP, which is expected to be recognized over a weighted average period of one year.

The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing method (Black-Scholes method). The determination of fair value using this model requires the use of certain estimates and assumptions that affect the reported amount of compensation cost recognized in the Company’s Statements of Operations. These include estimates of the expected term of the option, expected volatility of the Company’s stock price, expected dividends and the risk-free interest rate. These estimates and assumptions are highly subjective and may result in materially different amounts should circumstances change and the Company employ different assumptions in future periods. The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.

For share-based awards issued during the year ended December 31, 2008 and 2007, the expected term was estimated by using peer company information as Cytomedix’s history is limited. Estimated volatility was derived using the Company’s historical stock price volatility. No cash dividends have ever been declared or paid on the Company’s Common stock and currently none is anticipated. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.

In certain select cases, the Company has issued warrants, outside the LTIP, to service providers in exchange for the performance of consulting or other services. These warrants have generally been immediately vesting and expense was recognized equal to the fair value of the warrant on the date of grant using the Black-Scholes model. The same assumptions (and related risks) as discussed above apply, with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term. For the years ended December 31, 2008 and 2007, the Company recognized $135,000 and $1,014,000, respectively, of compensation expense for warrants issued to service providers. At December 31, 2008, there was no remaining unrecognized compensation cost related to warrants.

Stock-Based Compensation



Under the Company’s Long Term Incentive Plan (the “LTIP”), it grants share-based awards to eligible employees, directors, and service providers to purchase shares of common stock. The fair values of these awards are determined on the dates of grant or issuance and are recognized as expense over the service periods.



For the years ended December 31, 2008 and 2007, the Company recognized $592,000 and $350,000, respectively, of compensation expense for stock issued and stock options granted under the LTIP. At December 31,





28











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2008, there was $486,000 remaining in unrecognized compensation cost related to stock options under the LTIP, which is expected to be recognized over a weighted average period of one year.



The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing method (Black-Scholes method). The determination of fair value using this model requires the use of certain estimates and assumptions that affect the reported amount of compensation cost recognized in the Company’s Statements of Operations. These include estimates of the expected term of the option, expected volatility of the Company’s stock price, expected dividends and the risk-free interest rate. These estimates and assumptions are highly subjective and may result in materially different amounts should circumstances change and
the Company employ different assumptions in future periods. The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.



For share-based awards issued during the year ended December 31, 2008 and 2007, the expected term was estimated by using peer company information as Cytomedix’s history is limited. Estimated volatility was derived using the Company’s historical stock price volatility. No cash dividends have ever been declared or paid on the Company’s Common stock and currently none is anticipated. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.



In certain select cases, the Company has issued warrants, outside the LTIP, to service providers in exchange for the performance of consulting or other services. These warrants have generally been immediately vesting and expense was recognized equal to the fair value of the warrant on the date of grant using the Black-Scholes model. The same assumptions (and related risks) as discussed above apply, with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term. For the years ended December 31, 2008 and 2007, the Company recognized $135,000 and $1,014,000,
respectively, of compensation expense for warrants issued to service providers. At December 31, 2008, there was no remaining unrecognized compensation cost related to warrants.



Stock-Based Compensation



Under the Company’s Long Term Incentive Plan (the “LTIP”), it grants share-based awards to eligible employees, directors, and service providers to purchase shares of common stock. The fair values of these awards are determined on the dates of grant or issuance and are recognized as expense over the service periods.



For the years ended December 31, 2008 and 2007, the Company recognized $592,000 and $350,000, respectively, of compensation expense for stock issued and stock options granted under the LTIP. At December 31,





28











TABLE OF CONTENTS



2008, there was $486,000 remaining in unrecognized compensation cost related to stock options under the LTIP, which is expected to be recognized over a weighted average period of one year.



The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing method (Black-Scholes method). The determination of fair value using this model requires the use of certain estimates and assumptions that affect the reported amount of compensation cost recognized in the Company’s Statements of Operations. These include estimates of the expected term of the option, expected volatility of the Company’s stock price, expected dividends and the risk-free interest rate. These estimates and assumptions are highly subjective and may result in materially different amounts should circumstances change and
the Company employ different assumptions in future periods. The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.



For share-based awards issued during the year ended December 31, 2008 and 2007, the expected term was estimated by using peer company information as Cytomedix’s history is limited. Estimated volatility was derived using the Company’s historical stock price volatility. No cash dividends have ever been declared or paid on the Company’s Common stock and currently none is anticipated. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.



In certain select cases, the Company has issued warrants, outside the LTIP, to service providers in exchange for the performance of consulting or other services. These warrants have generally been immediately vesting and expense was recognized equal to the fair value of the warrant on the date of grant using the Black-Scholes model. The same assumptions (and related risks) as discussed above apply, with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term. For the years ended December 31, 2008 and 2007, the Company recognized $135,000 and $1,014,000,
respectively, of compensation expense for warrants issued to service providers. At December 31, 2008, there was no remaining unrecognized compensation cost related to warrants.



Stock-Based Compensation



Under the Company’s Long Term Incentive Plan (the “LTIP”), it grants share-based awards to eligible employees, directors, and service providers to purchase shares of common stock. The fair values of these awards are determined on the dates of grant or issuance and are recognized as expense over the service periods.



For the years ended December 31, 2008 and 2007, the Company recognized $592,000 and $350,000, respectively, of compensation expense for stock issued and stock options granted under the LTIP. At December 31,





28











TABLE OF CONTENTS



2008, there was $486,000 remaining in unrecognized compensation cost related to stock options under the LTIP, which is expected to be recognized over a weighted average period of one year.



The Company estimates the fair value of stock options on the date of grant using the Black-Scholes option-pricing method (Black-Scholes method). The determination of fair value using this model requires the use of certain estimates and assumptions that affect the reported amount of compensation cost recognized in the Company’s Statements of Operations. These include estimates of the expected term of the option, expected volatility of the Company’s stock price, expected dividends and the risk-free interest rate. These estimates and assumptions are highly subjective and may result in materially different amounts should circumstances change and
the Company employ different assumptions in future periods. The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.



For share-based awards issued during the year ended December 31, 2008 and 2007, the expected term was estimated by using peer company information as Cytomedix’s history is limited. Estimated volatility was derived using the Company’s historical stock price volatility. No cash dividends have ever been declared or paid on the Company’s Common stock and currently none is anticipated. The risk-free interest rate is based upon U.S. Treasury securities with remaining terms similar to the expected term of the share-based awards.



In certain select cases, the Company has issued warrants, outside the LTIP, to service providers in exchange for the performance of consulting or other services. These warrants have generally been immediately vesting and expense was recognized equal to the fair value of the warrant on the date of grant using the Black-Scholes model. The same assumptions (and related risks) as discussed above apply, with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term. For the years ended December 31, 2008 and 2007, the Company recognized $135,000 and $1,014,000,
respectively, of compensation expense for warrants issued to service providers. At December 31, 2008, there was no remaining unrecognized compensation cost related to warrants.



Stock-Based Compensation

The Company from time to time, may issue compensatory stock options or shares to employees, consultants, and other service providers under its Long-Term Incentive Plan (“LTIP”) (see Note 13). In some cases, it has issued warrants to service providers outside the LTIP (see Note 12). The Company issues new shares of its Common stock when employees or service providers exercise options or warrants.

The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), as of January 1, 2006, using the modified prospective application. Under this method, all equity-based compensation awarded after the adoption date has been determined under the fair value provisions of SFAS 123R. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered.

The Company recorded approximately $726,000 and $2,346,000 in expense associated with stock-based payments for the years ended December 31, 2008 and 2007, respectively. Of these amounts, $580,000 and $350,000, related to employee and director stock-based compensation for the same periods, respectively.

The fair value of each option award to employees and directors is estimated on the date of grant using the Black-Scholes option valuation model. The weighted-average assumptions used in the model are summarized in the following table:

   
  2008   2007
Risk free rate     2.96 %      4.86 % 
Expected years until exercise     6.0       8.6  
Expected stock volatility     125 %      111 % 
Dividend yield     —       —  

40

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CYTOMEDIX, INC.
  
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies  – (continued)

For employee and director options, expected volatilities are based on historical volatility of the Company’s stock. Due to the Company’s short operating history, it uses peer company data to estimate option exercise and employee termination within the valuation model. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using peer company information as Cytomedix’s history is limited. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated that the dividend rate on its Common stock will be zero. The fair value of warrants issued to service providers utilizes the same methodology with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term.

The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.

Stock-Based Compensation

The Company from time to time, may issue compensatory stock options or shares to employees, consultants, and other service providers under its Long-Term Incentive Plan (“LTIP”) (see Note 13). In some cases, it has issued warrants to service providers outside the LTIP (see Note 12). The Company issues new shares of its Common stock when employees or service providers exercise options or warrants.

The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), as of January 1, 2006, using the modified prospective application. Under this method, all equity-based compensation awarded after the adoption date has been determined under the fair value provisions of SFAS 123R. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered.

The Company recorded approximately $726,000 and $2,346,000 in expense associated with stock-based payments for the years ended December 31, 2008 and 2007, respectively. Of these amounts, $580,000 and $350,000, related to employee and director stock-based compensation for the same periods, respectively.

The fair value of each option award to employees and directors is estimated on the date of grant using the Black-Scholes option valuation model. The weighted-average assumptions used in the model are summarized in the following table:

   
  2008   2007
Risk free rate     2.96 %      4.86 % 
Expected years until exercise     6.0       8.6  
Expected stock volatility     125 %      111 % 
Dividend yield     —       —  

40

TABLE OF CONTENTS

CYTOMEDIX, INC.
  
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies  – (continued)

For employee and director options, expected volatilities are based on historical volatility of the Company’s stock. Due to the Company’s short operating history, it uses peer company data to estimate option exercise and employee termination within the valuation model. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using peer company information as Cytomedix’s history is limited. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated that the dividend rate on its Common stock will be zero. The fair value of warrants issued to service providers utilizes the same methodology with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term.

The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.

Stock-Based Compensation

The Company from time to time, may issue compensatory stock options or shares to employees, consultants, and other service providers under its Long-Term Incentive Plan (“LTIP”) (see Note 13). In some cases, it has issued warrants to service providers outside the LTIP (see Note 12). The Company issues new shares of its Common stock when employees or service providers exercise options or warrants.

The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), as of January 1, 2006, using the modified prospective application. Under this method, all equity-based compensation awarded after the adoption date has been determined under the fair value provisions of SFAS 123R. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered.

The Company recorded approximately $726,000 and $2,346,000 in expense associated with stock-based payments for the years ended December 31, 2008 and 2007, respectively. Of these amounts, $580,000 and $350,000, related to employee and director stock-based compensation for the same periods, respectively.

The fair value of each option award to employees and directors is estimated on the date of grant using the Black-Scholes option valuation model. The weighted-average assumptions used in the model are summarized in the following table:

   
  2008   2007
Risk free rate     2.96 %      4.86 % 
Expected years until exercise     6.0       8.6  
Expected stock volatility     125 %      111 % 
Dividend yield     —       —  

40

TABLE OF CONTENTS

CYTOMEDIX, INC.
  
NOTES TO FINANCIAL STATEMENTS

Note 3 — Summary of Significant Accounting Policies  – (continued)

For employee and director options, expected volatilities are based on historical volatility of the Company’s stock. Due to the Company’s short operating history, it uses peer company data to estimate option exercise and employee termination within the valuation model. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using peer company information as Cytomedix’s history is limited. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated that the dividend rate on its Common stock will be zero. The fair value of warrants issued to service providers utilizes the same methodology with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term.

The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.

Stock-Based Compensation



The Company from time to time, may issue compensatory stock options or shares to employees, consultants, and other service providers under its Long-Term Incentive Plan (“LTIP”) (see Note 13). In some cases, it has issued warrants to service providers outside the LTIP (see Note 12). The Company issues new shares of its Common stock when employees or service providers exercise options or warrants.



The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), as of January 1, 2006, using the modified prospective application. Under this method, all equity-based compensation awarded after the adoption date has been determined under the fair value provisions of SFAS 123R. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered.



The Company recorded approximately $726,000 and $2,346,000 in expense associated with stock-based payments for the years ended December 31, 2008 and 2007, respectively. Of these amounts, $580,000 and $350,000, related to employee and director stock-based compensation for the same periods, respectively.



The fair value of each option award to employees and directors is estimated on the date of grant using the Black-Scholes option valuation model. The weighted-average assumptions used in the model are summarized in the following table:



























































































































   
  2008   2007
Risk free rate     2.96 %      4.86 % 
Expected years until exercise     6.0       8.6  
Expected stock volatility     125 %      111 % 
Dividend yield     —       —  




40











TABLE OF CONTENTS



CYTOMEDIX, INC.
  
NOTES TO FINANCIAL STATEMENTS



Note 3 — Summary of Significant Accounting Policies  – (continued)



For employee and director options, expected volatilities are based on historical volatility of the Company’s stock. Due to the Company’s short operating history, it uses peer company data to estimate option exercise and employee termination within the valuation model. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using peer company information as Cytomedix’s history is limited. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated that the
dividend rate on its Common stock will be zero. The fair value of warrants issued to service providers utilizes the same methodology with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term.



The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.



Stock-Based Compensation



The Company from time to time, may issue compensatory stock options or shares to employees, consultants, and other service providers under its Long-Term Incentive Plan (“LTIP”) (see Note 13). In some cases, it has issued warrants to service providers outside the LTIP (see Note 12). The Company issues new shares of its Common stock when employees or service providers exercise options or warrants.



The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), as of January 1, 2006, using the modified prospective application. Under this method, all equity-based compensation awarded after the adoption date has been determined under the fair value provisions of SFAS 123R. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered.



The Company recorded approximately $726,000 and $2,346,000 in expense associated with stock-based payments for the years ended December 31, 2008 and 2007, respectively. Of these amounts, $580,000 and $350,000, related to employee and director stock-based compensation for the same periods, respectively.



The fair value of each option award to employees and directors is estimated on the date of grant using the Black-Scholes option valuation model. The weighted-average assumptions used in the model are summarized in the following table:



























































































































   
  2008   2007
Risk free rate     2.96 %      4.86 % 
Expected years until exercise     6.0       8.6  
Expected stock volatility     125 %      111 % 
Dividend yield     —       —  




40











TABLE OF CONTENTS



CYTOMEDIX, INC.
  
NOTES TO FINANCIAL STATEMENTS



Note 3 — Summary of Significant Accounting Policies  – (continued)



For employee and director options, expected volatilities are based on historical volatility of the Company’s stock. Due to the Company’s short operating history, it uses peer company data to estimate option exercise and employee termination within the valuation model. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using peer company information as Cytomedix’s history is limited. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated that the
dividend rate on its Common stock will be zero. The fair value of warrants issued to service providers utilizes the same methodology with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term.



The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.



Stock-Based Compensation



The Company from time to time, may issue compensatory stock options or shares to employees, consultants, and other service providers under its Long-Term Incentive Plan (“LTIP”) (see Note 13). In some cases, it has issued warrants to service providers outside the LTIP (see Note 12). The Company issues new shares of its Common stock when employees or service providers exercise options or warrants.



The Company adopted SFAS No. 123R, Share-Based Payment (“SFAS 123R”), as of January 1, 2006, using the modified prospective application. Under this method, all equity-based compensation awarded after the adoption date has been determined under the fair value provisions of SFAS 123R. Additionally, for all equity-based compensation awarded prior to the adoption date, compensation for the portion of awards for which the requisite service is performed after the adoption date is recognized as service is rendered.



The Company recorded approximately $726,000 and $2,346,000 in expense associated with stock-based payments for the years ended December 31, 2008 and 2007, respectively. Of these amounts, $580,000 and $350,000, related to employee and director stock-based compensation for the same periods, respectively.



The fair value of each option award to employees and directors is estimated on the date of grant using the Black-Scholes option valuation model. The weighted-average assumptions used in the model are summarized in the following table:



























































































































   
  2008   2007
Risk free rate     2.96 %      4.86 % 
Expected years until exercise     6.0       8.6  
Expected stock volatility     125 %      111 % 
Dividend yield     —       —  




40











TABLE OF CONTENTS



CYTOMEDIX, INC.
  
NOTES TO FINANCIAL STATEMENTS



Note 3 — Summary of Significant Accounting Policies  – (continued)



For employee and director options, expected volatilities are based on historical volatility of the Company’s stock. Due to the Company’s short operating history, it uses peer company data to estimate option exercise and employee termination within the valuation model. The expected years until exercise represents the period of time that options are expected to be outstanding and was estimated by using peer company information as Cytomedix’s history is limited. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated that the
dividend rate on its Common stock will be zero. The fair value of warrants issued to service providers utilizes the same methodology with the exception of the expected term. For these warrants issued to service providers, the Company estimates that the warrant will be held for the full term.



The Company estimates the fair value of stock issuances based on the closing market value of the Company’s stock on the date of grant.



EXCERPTS ON THIS PAGE:

10-K (12 sections)
Mar 31, 2009

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