SCON » Topics » Stock-based Compensation

These excerpts taken from the SCON 10-K filed Mar 27, 2008.
Stock-based Compensation
 
Effective January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”). Under this provision, the share-based compensation cost recognized beginning January 1, 2006 includes compensation cost for (i) all share-based payments granted prior to, but not vested as of January 1, 2006, based on the grant date fair value originally estimated in accordance with the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” (“SFAS No. 123”) and (ii) all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123(R). Compensation cost under SFAS No. 123(R) is recognized ratably using the straight-line attribution method over the expected vesting period. Prior periods are not restated under this transition method.
 
As a result of adopting SFAS 123R, the impact to the Consolidated Statement of Operations for the years ended December 31, 2007 and 2006 on net income, for stock options and awards, was an expense of $339,000 and $280,000 and $0.03 and $0.02, respectively, on basic and diluted earnings per share. No stock compensation cost was capitalized during the period.
 
In the years prior to 2006, as permitted under Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation”, we elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” in accounting for our stock options and other stock-based employee awards. Pro forma information regarding net loss and loss per share, as calculated under the provisions of SFAS 123, are disclosed in the notes to the financial statements. We accounted for equity securities issued to non-employees in accordance with the provision of SFAS 123 and Emerging Issues Task Force 96-18. If we had elected to recognize compensation expense for employee awards based upon the fair value at the grant date


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SUPERCONDUCTOR TECHNOLOGIES INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
consistent with the methodology prescribed by SFAS 123, our net loss and net loss per share in 2005 would have been increased to the pro forma amounts indicated below:
 
         
    For the Year Ended
 
    December 31,
 
    2005  
 
Net loss:
       
As reported
  $ (14,213,000 )
Stock-based employee compensation included in net loss
     
Stock-based compensation expense determined under fair value method
    (6,459,000 )
         
Pro forma
  $ (20,672,000 )
         
Basic and diluted loss per share
       
As reported
  $ (1.24 )
Stock-based compensation expense determined under fair value method
    (0.57 )
         
Pro forma
  $ (1.81 )
         
 
Stock-based
Compensation



 



Effective January 1, 2006, we adopted the provisions of
Statement of Financial Accounting Standards (“SFAS”)
No. 123(revised 2004), “Share-Based Payment”
(“SFAS No. 123(R)”). Under this provision,
the share-based compensation cost recognized beginning
January 1, 2006 includes compensation cost for (i) all
share-based payments granted prior to, but not vested as of
January 1, 2006, based on the grant date fair value
originally estimated in accordance with the provisions of
SFAS No. 123, “Accounting for Stock-Based
Compensation,” (“SFAS No. 123”) and
(ii) all share-based payments granted subsequent to
January 1, 2006, based on the grant date fair value
estimated in accordance with the provisions of
SFAS No. 123(R). Compensation cost under
SFAS No. 123(R) is recognized ratably using the
straight-line attribution method over the expected vesting
period. Prior periods are not restated under this transition
method.


 



As a result of adopting SFAS 123R, the impact to the
Consolidated Statement of Operations for the years ended
December 31, 2007 and 2006 on net income, for stock options
and awards, was an expense of $339,000 and $280,000 and $0.03
and $0.02, respectively, on basic and diluted earnings per
share. No stock compensation cost was capitalized during the
period.


 



In the years prior to 2006, as permitted under Statement of
Financial Accounting Standards No. 123
(“SFAS 123”), “Accounting for Stock-Based
Compensation”, we elected to follow Accounting Principles
Board Opinion No. 25, “Accounting for Stock Issued to
Employees” in accounting for our stock options and other
stock-based employee awards. Pro forma information regarding net
loss and loss per share, as calculated under the provisions of
SFAS 123, are disclosed in the notes to the financial
statements. We accounted for equity securities issued to
non-employees in accordance with the provision of SFAS 123
and Emerging Issues Task Force
96-18. If we
had elected to recognize compensation expense for employee
awards based upon the fair value at the grant date





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Table of Contents





 




SUPERCONDUCTOR
TECHNOLOGIES INC.




 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



consistent with the methodology prescribed by SFAS 123, our
net loss and net loss per share in 2005 would have been
increased to the pro forma amounts indicated below:


 




























































































































         

 

 

For the Year Ended



 

 

 

December 31,



 

 

 

2005

 
 


Net loss:


 

 

 

 


As reported


 

$

(14,213,000

)


Stock-based employee compensation included in net loss


 

 



 


Stock-based compensation expense determined under fair value
method


 

 

(6,459,000

)

 

 

 

 

 


Pro forma


 

$

(20,672,000

)

 

 

 

 

 


Basic and diluted loss per share


 

 

 

 


As reported


 

$

(1.24

)


Stock-based compensation expense determined under fair value
method


 

 

(0.57

)

 

 

 

 

 


Pro forma


 

$

(1.81

)

 

 

 

 

 






 




This excerpt taken from the SCON 10-K filed Apr 2, 2007.
Stock-based Compensation
 
Effective January 1, 2006, we adopted the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123(revised 2004), “Share-Based Payment” (“SFAS No. 123(R)”). Under this provision, the share-based compensation cost recognized beginning January 1, 2006 includes compensation cost for (i) all share-based payments granted prior to, but not vested as of January 1, 2006, based on the grant date fair value originally estimated in accordance with the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” (“SFAS No. 123”) and (ii) all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123(R). Compensation cost under SFAS No. 123(R) is recognized ratably using the straight-line attribution method over the expected vesting period. Prior periods are not restated under this transition method.
 
As a result of adopting SFAS 123R, the impact to the Consolidated Statement of Operations for the year ended December 31, 2006 on net income, for stock options and awards, was an expense of $280,000 and $0.02 on basic and diluted earnings per share. No stock compensation cost was capitalized during the period.
 
In the years prior to 2006, as permitted under Statement of Financial Accounting Standards No. 123 (“SFAS 123”), “Accounting for Stock-Based Compensation”, the Company elected to follow Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” in accounting for its stock options and other stock-based employee awards. Pro forma information regarding net loss and loss per share, as calculated under the provisions of SFAS 123, are disclosed in the notes to the financial statements. The Company accounted for equity securities issued to non-employees in accordance with the provision of SFAS 123 and Emerging Issues Task Force 96-18.
 
In 2004 and 2005 the Company did not recognize compensation expense for its employee awards. If the Company had elected to recognize compensation expense for employee awards based upon the fair value at the


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SUPERCONDUCTOR TECHNOLOGIES INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

grant date consistent with the methodology prescribed by SFAS 123, the Company’s net loss and net loss per share would have been increased to the pro forma amounts indicated below:
 
                 
    For the Years Ended December 31,  
    2004     2005  
 
Net loss:
               
As reported
  $ (31,217,000 )   $ (14,213,000 )
Stock-based employee compensation included in net loss
    48,000        
Stock-based compensation expense determined under fair value method
    (5,543,000 )     (6,459,000 )
                 
Pro forma
  $ (36,712,000 )   $ (20,672,000 )
                 
Basic and diluted loss per share
               
As reported
  $ (3.71 )   $ (1.24 )
Stock-based compensation expense determined under fair value method
    (0.66 )     (0.57 )
                 
Pro forma
  $ (4.37 )   $ (1.81 )
                 
 

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