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Stockholders' Equity | 3 Months Ended
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Jun. 30, 2015
Stockholders' Equity Note [Abstract] |
Stockholders’ Equity | 9. Stockholders’ Equity Common Stock Placement On March 28, 2014, the Company entered into an equity and debt investment for up to $12.0 million with NNA. As part of the investment, the Company entered into the Investment Agreement with NNA, pursuant to which the Company sold NNA 200,000 shares of the Company’s common stock (the “Purchased Shares”) at a purchase price of $10.00 per share. In addition with the issuance of common shares, the Company issued to NNA 100,000 warrants to purchase the Company’s common stock for $10.00 per share. The Company used the Monte Carlo Method to value the warrants, which used the following inputs: term of 7 years, risk free rate of 2.31%, no dividends, volatility of 71.4%, share price of $4.50 per share and a 50% probability of down-round financing. The Company determined that the fair value of the shares issued was approximately $900,000, or $868,236 after the relative fair value adjustment, which approximates $4.50 per share. The Company also entered into a registration rights agreement (“RRA”) with NNA, which the Company and NNA amended on February 6, 2015, which requires the Company to file a registration statement to register its shares with the SEC no later than June 26, 2015. Effective July 7, 2015, the Company amended the First Amendment to extend the previous registration statement deadline to October 24, 2015. The RRA requires the Company to use commercially reasonable best efforts to cause the RRA to be declared effective by the SEC. If the Initial Registration Statement is not filed with the SEC on or prior to the filing deadline, the Company must pay to NNA an amount in common stock based upon its then fair market value, as liquidated damages equal to 1.50% of the aggregate purchase price paid by NNA. Equity Incentive Plans The Company’s amended 2010 Equity Incentive Plan (the “2010 Plan”) allowed the Board to grant up to 1,200,000 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 June 30, 2015, there were no shares available for grant. On April 29, 2013 the Company’s Board of Directors approved the Company’s 2013 Equity Incentive Plan (the “2013 Plan”), pursuant to which 500,000 shares of the Company’s common stock were 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 June 30, 2015 there were approximately 48,600 shares available for future grants under the 2013 Plan. Share Issuances A summary of the Company’s restricted stock sold to employees, directors and consultants with a right of repurchase of unlapsed or unvested shares is as follows:
|  |  |  |  | Weighted Average Remaining Vesting |  | Weighted Average Per Share |  | Weighted- average Per Share |
|  |  |  |  | Life |  | Intrinsic |  | Grant Date |
|  | Shares |  | (In years) |  | Value |  | Fair Value |
Unvested or unlapsed shares at March 31, 2015 |  |  | 12,222 |  |  | 0.3 |  | $ | 0.50 |  | $ | 4.10 |
Granted |  |  | - |  |  |  |  |  |  |  |  |  |
Vested / lapsed |  |  | (6,111) |  |  | - |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  |  |  |  |  |  |  |
Unvested or unlapsed shares at June 30, 2015 |  |  | 6,111 |  |  | 0.3 |  |  | 0.81 |  |  | 4.10 |
Options Stock option activity for the three months ended June 30, 2015 is summarized below:
|  | Shares |  | Weighted Average Per Share Exercise Price |  | Weighted Average Remaining Life (Years) |  | Weighted Average Per Share Intrinsic Value |
Balance, March 31, 2015 |  |  | 776,500 |  | $ | 4.69 |  |  | 7.4 |  | $ | 1.50 |
Granted |  |  | - |  |  |  |  |  |  |  |  |  |
Cancelled |  |  | - |  |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  |  |  |  |  |  |  |  |
Expired |  |  | - |  |  |  |  |  |  |  |  |  |
Forfeited |  |  | - |  |  |  |  |  |  |  |  |  |
Balance, June 30, 2015 |  |  | 776,500 |  | $ | 4.69 |  |  | 7.2 |  |  | 1.93 |
Vested and exercisable, June 30, 2015 |  |  | 675,431 |  | $ | 2.39 |  |  | 5.0 |  |  | 4.24 |
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. The following table summarizes the restricted stock award in the ACO Plan during the three months ended June 30, 2015:
|  | Shares |  | Weighted Average Remaining Vesting Life (Years) |  | Weighted Average Per Share Intrinsic Value |  | Weighted Average Per Share Fair Value |
Balance, March 31, 2015 |  |  | 3,752,004 |  |  | 0.1 |  | $ | 0.70 |  | $ | 0.07 |
Granted |  |  | - |  |  | - |  |  | - |  |  | - |
Released |  |  | - |  |  | - |  |  | - |  |  | - |
Balance, June 30, 2015 |  |  | 3,752,004 |  |  | - |  | $ | 0.70 |  | $ | 0.07 |
Vested and exercisable, end of period |  |  | 3,651,675 |  |  |  |  |  |  |  |  |  |
Awards of restricted stock under the ACO 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 June 30, 2015, total unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under the Company’s 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:
|  | Unrecognized Stock Compensation Cost |  | Weighted Average Remaining Vesting Period (Years) |
Common stock options |  | $ | 214,977 |  | 1.5 |
Restricted stock |  | $ | 40,940 |  | 0.02 |
ACO Plan restricted stock |  | $ | 7,275 |  | 0.01 |
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 accompanying condensed consolidated statement of operations as follows:
|  | Three Months Ended June 30, |
|  | 2015 |  | 2014 |
Stock-based compensation expense: |  |  |  |  |  |  |
Cost of services |  | $ | 1,227 |  | $ | 28,743 |
General and administrative |  |  | 82,621 |  |  | 90,396 |
|  | $ | 83,848 |  | $ | 119,139 |
Warrants Warrants consisted of the following for the three months ended June 30, 2015:
|  | Weighted Average Per Share |  |  |  |
|  | Intrinsic |  | Number of |
|  | Value |  | Warrants |
Outstanding at March 31, 2015 |  | $ | 0.46 |  |  | 914,500 |
Granted |  |  | - |  |  | - |
Exercised |  |  | - |  |  | - |
Cancelled |  |  | - |  |  | - |
Outstanding at June 30, 2015 |  | $ | 0.31 |  |  | 914,500 |
|  |  |  |  |  |  |  |  |  |  |  | Weighted |
|  |  |  |  |  | Weighted |  |  |  |  | Average |
Exercise Price Per Share |  | Warrants Outstanding |  | Average Remaining Contractual Life |  | Warrants Exercisable |  | Exercise Price Per Share |
$ | 1.15 |  |  | 125,000 |  |  | 1.1 |  |  | 125,000 |  | $ | 1.15 |
| 1.15 |  |  | 25,000 |  |  | 1.1 |  |  | 25,000 |  |  | 1.15 |
| 4.50 |  |  | 50,000 |  |  | 1.1 |  |  | 50,000 |  |  | 4.50 |
| 5.00 |  |  | 10,000 |  |  | 2.3 |  |  | 10,000 |  |  | 5.00 |
| 4.50 |  |  | 82,500 |  |  | 2.6 |  |  | 82,500 |  |  | 4.50 |
| 4.00 |  |  | 22,000 |  |  | 2.6 |  |  | 22,000 |  |  | 4.00 |
| 10.00 |  |  | 200,000 |  |  | 5.7 |  |  | - |  |  | 10.00 |
| 20.00 |  |  | 200,000 |  |  | 5.7 |  |  | - |  |  | 20.00 |
| 10.00 |  |  | 100,000 |  |  | 5.7 |  |  | - |  |  | 10.00 |
| 10.00 |  |  | 100,000 |  |  | 3.1 |  |  | 100,000 |  |  | 10.00 |
|  |  |  | 914,500 |  |  | 3.1 |  |  | 414,500 |  |  | 4.60 |
In connection with the 2014 NNA financing, NNA received warrants to purchase up to 300,000 shares of the Company’s common stock at an exercise price of $10.00 per share and up to 200,000 shares at an exercise price of $20.00 per share, subject to adjustment for stock splits, reverse stock splits and stock dividends, and are exercisable after March 28, 2017 and before March 28, 2021. The warrants also contained down-round protection under which the exercise price of the warrants is subject to adjustment in the event the Company issues future common shares at a price below $9.00 per share. The Company determined that the warrants should be classified as liabilities under ASC 815-40, which requires the Company to determine the fair value of the warrants at the transaction date and at each subsequent reporting date (see Notes 2 and 6). On July 21, 2014, in connection with the SCHC acquisition, the Company issued warrants to purchase up to 100,000 shares of the Company’s common stock at an exercise price of $10.00 per share. The warrants are exercisable at any date prior to July 21, 2018. Authorized stock At June 30, 2015 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 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 number of shares of common stock reserved for these purposes is as follows at June 30, 2015:
Common stock issued and outstanding |  | 4,863,455 |
Conversion of 9% Notes |  | 275,000 |
Conversion of 8% Notes |  | 200,000 |
Warrants outstanding |  | 914,500 |
Stock options outstanding |  | 776,500 |
Remaining shares issuable under 2013 Equity Incentive Plan |  | 90,000 |
|  | 7,119,455 |

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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 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 2: 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 3: 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 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 Reference 10: 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 11: 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 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 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C + Details
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