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Stockholders' Deficit | 6 Months Ended
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Jul. 31, 2013
Stockholders' Equity Note [Abstract] |
Stockholders' Deficit |
6. Stockholders’ Deficit Common Stock Placement In March 2013, the Company initiated a private placement of up to 7,500,000 shares of its common stock at a price per share of $0.40 (the “Equity Offering”), and during the six months ended July 31, 2013 the Company issued 1,075,000 shares of common stock for proceeds of $430,000. Equity Incentive Plans The Company’s amended 2010 Equity Incentive Plan (the “2010 Plan”) allowed the Board to grant up to 12,000,000 shares of the Company’s common stock, and provided for awards including incentive stock options, non-qualified options, restricted common stock, and stock appreciation rights. As of July 31, 2013, there were no shares available for future grants under the 2010 Plan, and no further shares will be issued under the 2010 Plan. On April 29, 2013 the Company’s Board of Directors approved the Company’s 2013 Equity Incentive Plan (the “2013 Plan”), pursuant to which 5,000,000 shares of the Company’s common stock will be reserved for issuance thereunder. The Company received approval of the 2013 Plan from the Company’s stockholders on May 19, 2013. The Company issues new shares to satisfy stock option and warrant exercises under the 2013 Plan. As of July 31, 2013 there were approximately 2,530,000 shares available for future grants under the 2013 Plan. Stock options and restricted common stock issued to non-employees as compensation for services to be provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair value of the option or share, whichever can be more clearly determined. The Company recognizes this expense over the period in which the services are provided. Share Issuances On April 30, 2013, the Company’s Board of Directors authorized the issuance of 300,000 shares of common stock to Kanehoe Advisors for consulting services, 300,000 shares of common stock to Gary Augusta for consulting services, and 100,000 shares of common stock for other professional services during the three months ended April 30, 2013. The 700,000 shares authorized had an aggregate cost of $315,000 and were recorded as stock-based compensation expense based on the fair values of the shares at the commitment dates. During the three months ended July 31, 2013 the Company accrued 180,000 shares of common stock for professional services with an aggregate cost of $97,200 based on the fair value of the shares at their respective commitment dates. These shares were not issued as of July 31, 2013, and were recorded as a liability at July 31, 2013. Option Issuances During the three months ended April 30, 2013 the Company’s Board of Directors authorized the issuance of options for 150,000 shares of common stock with an exercise price of $0.21 per share to Mark Meyers pursuant to Mr. Meyers’ consulting agreement. The options vest immediately and expire on the tenth anniversary of issuance. The fair value of the 150,000 stock options of $55,774 was determined under the Black-Scholes option pricing model. The calculation was based on the Company’s closing stock price on the date of grant and the following weighted-average inputs:
Expected term (years) |  | 3.0 |
Volatility |  | 17.4 | %
Dividends |  | 0.0 | %
Interest rate |  | 0.82 | %
During the three months ended April 30, 2013, the Company issued awards of options for 382,000 shares of the Company’s common stock. The options generally vest on a monthly basis over a 36 month period, and expire on the tenth anniversary of issuance. The aggregate fair value of the stock options of $94,162 was determined using the Black-Scholes option pricing model. The calculation was based on the Company’s closing stock price on the date of grant and the following weighted-average inputs: The weighted-average inputs for the three months ended April 30, 2013 were as follows:
Exercise Price |  | $ | 0.41 |
Expected Term (in years) |  |  | 4.59 |
Volatility |  |  | 26.0 | %
Dividend rate |  |  | 0.0 | %
Interest rate |  |  | 0.5 | %
During the three months ended July 31, 2013 the Company’s Board of Directors authorized the issuance of options for 150,000 shares of common stock with an exercise price of $0.21 per share to Mark Meyers pursuant to Mr. Meyers’ consulting agreement. The options vest immediately and expire on the tenth anniversary of issuance. The fair value of the 150,000 stock options of $65,678 was determined under the Black-Scholes option pricing model. The calculation was based on the Company’s closing stock price on the date of grant and the following weighted-average inputs:
Expected term (years) |  | 3.0 |
Volatility |  | 29.7 | %
Dividends |  | 0.0 | %
Interest rate |  | 0.5 | %
On May 21, 2013, the Company’s Board of Directors authorized the issuance of 400,000 common stock options to David Schmidt pursuant to the Director’s Agreement between Mr. Schmidt and the Company in connection with his appointment to the Company’s Board of Directors. The options vest evenly over 36 months. The fair value of the 400,000 stock options of $69,464 was determined under the Black-Scholes option pricing model using the Company’s closing stock price on the date of grant and the following inputs: exercise price $0.50, expected term (years) 3.0, volatility 29.7%, interest rate 0.64%, and no dividends. During the three months ended July 31, 2013, the Company’s Board of Directors authorized the issuance or modification of common stock option awards for 1,733,000 shares to certain employees. The options generally vested upon grant. The aggregate fair value of the options was $678,000, determined using the Black-Scholes option pricing model. The calculation was based on the Company’s closing stock price on the date of grant and the following weighted-average inputs: The weighted-average inputs were as follows:
Exercise Price |  | $ | 0.004 |
Expected Term (in years) |  |  | 3.00 |
Volatility |  |  | 29.7 | %
Dividend rate |  |  | 0.0 | %
Interest rate |  |  | 0.6 | %
Stock option activity for the six months ended July 31, 2013 is summarized below:
|  |  |  |  | Weighted |  | Weighted |  |  |  |
|  |  |  |  | Average |  | Average |  |  |  |
|  |  |  |  | Per Share |  | Remaining |  | Aggregate |
|  |  |  |  | Exercise |  | Life |  | Intrinsic |
|  | Shares |  | Price |  | (Years) |  | Value |
Balance, January 31, 2013 |  |  | 5,300,000 |  | $ | 0.18 |  |  | 9.1 |  | $ | - |
Granted |  |  | 2,815,000 |  |  | 0.13 |  |  | 9.8 |  |  | - |
Cancelled |  |  | (1,000,000) |  |  | 0.21 |  |  | 9.1 |  |  |  |
Exercised |  |  | - |  |  | - |  |  | - |  |  | - |
Expired |  |  | - |  |  | - |  |  | - |  |  | - |
Forfeited |  |  | - |  |  | - |  |  | - |  |  | - |
Balance, July 31, 2013 |  |  | 7,115,000 |  | $ | 0.16 |  |  | 9.3 |  | $ | - |
Vested and exercisable - July 31, 2013 |  |  | 5,255,390 |  | $ | 0.16 |  |  | 9.5 |  | $ | - |
ApolloMed ACO 2012 Equity Incentive Plan On October 18, 2012 ApolloMed ACO’s Board of Directors adopted the ApolloMed Accountable Care Organization, Inc. 2012 Equity Incentive Plan (the “ACO Plan”) and reserved 9,000,000 shares of ApolloMed ACO’s common stock for issuance thereunder. The purpose of the ACO Plan is to encourage selected employees, directors, consultants and advisers to improve operations and increase the profitability of ApolloMed ACO and encourage selected employees, directors, consultants and advisers to accept or continue employment or association with ApolloMed ACO.
|  | Shares |  | Weighted Average Remaining Life (Years) |  | Aggregate Intrinsic Value |  | Weighted Average Fair Value |
Balance, January 31, 2013 |  |  | 3,690,000 |  |  | - |  | $ | 36,900 |  | $ | 0.01 |
Granted |  |  | 60,000 |  |  |  |  |  | 600 |  |  | 0.01 |
Released |  |  | - |  |  |  |  |  |  |  |  |  |
Balance, July 31, 2013 |  |  | 3,750,000 |  |  | - |  | $ | 37,500 |  | $ | 0.01 |
Awards of restricted stock under the Plan vest (i) one-third on the date of grant; (ii) one-third on the first anniversary of the date of grant, if the grantee has remained in service continuously until that date; and (iii) one-third on the second anniversary of the date of grant if the grantee has remained in service continuously until that date. As of July 31, 2013, total unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under our 2010 and 2013 Equity Plans, and the ACO Plan’s and the weighted-average period of years expected to recognize those costs are as follows:
|  |  |  |  | Weighted |
|  |  |  |  | Average |
|  |  |  |  | Remaining |
|  |  |  |  | Life |
|  |  |  |  | (Years) |
Common stock options |  | $ | 310,959 |  |  | 1.1 |
ACO Plan restricted stock |  | $ | 18,850 |  |  | 1.5 |
Stock-based compensation expense related to common stock and common stock option awards is recognized over their respective vesting periods and was included in the accompany condensed consolidated statement of operations as follows:
|  | Three months ended July 31, |  | Six months ended July 31, |
|  | 2013 |  | 2012 |  | 2013 |  | 2012 |
Stock-based compensation expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of services |  | $ | 329,263 |  | $ | (93,565) |  | $ | 477,158 |  | $ | 12,509 |
General and administrative |  |  | 716,224 |  |  | 174,495 |  |  | 1,191,555 |  |  | 172,555 |
|  | $ | 1,045,487 |  | $ | 80,930 |  | $ | 1,668,713 |  | $ | 185,064 |
Warrants Warrants consisted of the following as of and for the six months ended July 31, 2013:
|  | Aggregate |  |  |  |
|  | Intrinsic Value |  | Number of warrants |
Outstanding at January 31, 2013 |  | $ | - |  |  | 2,936,000 |
Granted |  |  | - |  |  | 209,000 |
Exercised |  |  | - |  |  | - |
Cancelled |  |  | - |  |  | - |
Outstanding at July 31, 2013 |  | $ | - |  |  | 3,145,000 |
|  |  |  |  |  | Weighted |  |  |  |  |  |  |
|  |  |  |  |  | average |  |  |  |  | Weighted |
|  |  | Warrants |  | remaining |  | Warrants |  | average |
Exercise Price |  | outstanding |  | contractual life |  | exercisable |  | exercise price |
$ | 0.11485 |  |  | 1,250,000 |  |  | 3.00 |  |  | 1,250,000 |  | $ | 0.1149 |
$ | 0.11485 |  |  | 250,000 |  |  | 3.00 |  |  | 250,000 |  | $ | 0.1149 |
$ | 0.45000 |  |  | 500,000 |  |  | 3.00 |  |  | 500,000 |  | $ | 0.4500 |
$ | 0.50000 |  |  | 100,000 |  |  | 4.25 |  |  | 100,000 |  | $ | 0.5000 |
$ | 0.45000 |  |  | 825,000 |  |  | 4.50 |  |  | 825,000 |  | $ | 0.4500 |
$ | 0.40000 |  |  | 220,000 |  |  | 4.51 |  |  | 220,000 |  | $ | 0.4000 |
|  |  |  | 3,145,000 |  |  | 3.54 |  |  | 3,145,000 |  | $ | 0.2882 |
Authorized stock At July 31, 2013 the Company was authorized to issue up to 100,000,000 shares of common stock. The Company is required to reserve and keep available out of the authorized but unissued shares of common stock such number of shares sufficient to effect the conversion of all outstanding shares of the 10% Senior Subordinated Callable Convertible Notes, the 8% Senior Subordinated Convertible Promissory Notes, the 9% Senior Subordinated Callable Notes, the exercise of all outstanding warrants exercisable into shares of common stock, and shares granted and available for grant under the Company’s 2013 Plan. The amount of shares of common stock reserved for these purposes is as follows at July 31, 2013:
Common stock issued and outstanding |  |  | 35,918,441 |
Conversion of 10% Notes |  |  | 10,883,761 |
Conversion of 8% Notes |  |  | 600,000 |
Conversion of 9% Notes |  |  | 2,282,880 |
Warrants outstanding |  |  | 3,145,000 |
Stock options outstanding |  |  | 7,115,000 |
Remaining shares issuable under 2013 Equity Incentive Plan |  |  | 2,530,000 |
|  |  | 62,475,082 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.29-31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Article 4 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(d),(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph d -Article 4 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 + Details
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