XML 25 R13.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Stockholders' Equity | 9 Months Ended
--- | ---
Dec. 31, 2016
Stockholders' Equity Note [Abstract] |
Stockholders’ Equity |
8. | Stockholders’ Equity
Preferred Stock – Series A On October 14, 2015, Company entered into a Securities Purchase Agreement (the “2015 NMM Agreement”) with NMM pursuant to which the Company sold to NMM, and NMM purchased from the Company, in a private offering of securities, 1,111,111 units, each unit consisting of one share of the Company’s Series A Preferred Stock and a stock purchase warrant to purchase one share of the Company’s common stock at an exercise price of $9.00 per share. NMM paid the Company an aggregate $10,000,000 for the units, the proceeds of which were used by the Company primarily to repay certain outstanding indebtedness owed by the Company to NNA and the balance for working capital. The Series A Preferred Stock has a liquidation preference in the amount of $9.00 per share plus any declared and unpaid dividends. The Series A Preferred Stock can be voted for the number of shares of common stock into which the Series A Preferred Stock could then be converted, which initially is one-for-one. The Series A Preferred Stock is convertible into common stock, at the option of NMM, at any time after issuance at an initial conversion rate of one-for-one, subject to adjustment in the event of stock dividends, stock splits and certain other similar transactions. At any time prior to conversion and through the Redemption Expiration Date (as described below), the Series A was able to be redeemed at the option of NMM, on one occasion, in the event that the Company’s net revenues for the four quarters ending September 30, 2016, as reported in its periodic filings under the Securities Exchange Act of 1934, as amended, were less than $60,000,000. In such event, the Company had up to one year from the date of the notice of redemption by NMM to redeem the Series A Preferred Stock, the NMM Warrant and any shares of common stock issued in connection with the exercise of any portion of the NMM Warrant theretofore (collectively the “Redeemed Securities”), for the aggregate price paid therefore by NMM, together with interest at a rate of 10% per annum from the date of the notice of redemption until the closing of the redemption. Any mandatory conversion described previously would not take place until such time as it was determined that that conditions for the redemption of the Redeemed Securities have not been satisfied or, if such conditions exist, NMM decided not to have such securities redeemed. As the redemption feature was not within the control of the Company, the Series A Preferred Stock did not qualify as permanent equity and was classified as mezzanine or temporary equity. The Company did not attain the $60,000,000 net revenues milestone noted above by September 30, 2016. Accordingly, the Series A were subject to redemption for $10,000,000. However, as part of the proposed Merger between NMM and the Company (see Note 9), NMM entered into a Consent and Waiver Agreement dated December 21, 2016 (the “NMM Waiver”), pursuant to which NMM has relinquished its right of redemption of the Series A Preferred Stock. As a result of the NMM Waiver on December 21, 2016, the mezzanine equity was reclassified to permanent equity at its carrying amount of $7,077,778. The Series A Warrant may be exercised at any time after issuance and through October 14, 2020, for $9.00 per share, subject to adjustment in the event of stock dividends and stock splits. The NMM Warrant is not separately transferable from the Series A Preferred Stock. Prior to December 21, 2016, the Company previously accounted for the Series A Warrant as a liability and has marked such liability to its fair value at each subsequent reporting period. The Company determined the fair value of the warrant liability to be $2,922,222 at inception which was estimated using the Monte Carlo valuation model with the value of the Series A Preferred Stock being the residual value of $7,077,778. The fair value of the warrant at December 21, 2016 of $1,178,000 (see Note 2) has been reclassified to equity as a result of the NMM Waiver in connection with the Merger Agreement, See Note 9 to Notes to Consolidated Financial Statements. Common Stock Issuance During the nine months ended December 31, 2016, the Company issued 150,000 shares of common stock and received approximately $172,000 from the exercise of certain warrants at an exercise price of $1.1485 per share. 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 December 31, 2016, 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 December 31, 2016 there were no shares available for future grants under the 2013 Plan. On December 15, 2015, the Company’s Board of Directors approved the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), pursuant to which 1,500,000 shares of the Company’s common stock were reserved for issuance thereunder. In addition, shares that are subject to outstanding grants under the Company’s 2010 Plan and 2013 Plan but that ordinarily would have been restored to such plans reserve due to award forfeitures and terminations will roll into and become available for awards under the 2015 Plan. The 2015 Plan provides for awards, including incentive stock options, non-qualified options, restricted common stock, and stock appreciation rights. The 2015 Plan was subject to approval by the Company’s stockholders, which approval was obtained at the 2016 Annual Meeting of Stockholders that was held on September 14, 2016. As of December 31, 2016, there were approximately 1,023,600 shares available for future grants under the 2015 Plan. Options On September 14, 2016, the Company’s Board of Directors approved the grant of stock options for an aggregate 80,000 shares of common stock to the independent directors for their service as directors. These options expire on the 10th anniversary date from date of grant and have an exercise price of $5.00 per share. The aggregate fair value of the stock options of $356,000 was computed using the Black-Scholes option pricing model, using the following assumptions: expected term - 6 years; stock price $5.00 per share; volatility - $132.63%; risk-free interest rate – 0.79%; and zero annual rate of quarterly dividend. The Company recorded approximately $104,000 of share based compensation expense related to these option grants during the three and nine months ended December 31, 2016. On November 14, 2016, the Company granted a stock option to the Company’s Chief Financial Officer for 50,000 shares of common stock. This option expires on the 10th anniversary date from date of grant and has an exercise price of $4.50 per share. The fair value of the stock option of $202,000 was computed using the Black-Scholes option pricing model, using the following assumptions: expected term - 6 years; stock price $4.50 per share; volatility - 132.17%; risk-free interest rate – 0.83%; and zero annual rate of quarterly dividend. The Company recorded approximately $8,000 of share based compensation expense related to this option grant during the three and nine months ended December 31, 2016 Stock option activity for the nine months ended December 31, 2016 is summarized below:
|  |  |  | Weighted |  | Weighted |  | Weighted |
|  |  |  | Average |  | Average |  | Average |
|  |  |  | Per Share |  | Remaining |  | Per Share |
|  |  |  | Exercise |  | Life |  | Intrinsic |
|  | Shares |  | Price |  | (Years) |  | Value |
Balance, March 31, 2016 |  |  | 1,064,150 |  | $ | 4.27 |  |  | 7.94 |  | $ | 2.27 |
Granted |  |  | 149,200 |  |  | 4.78 |  |  | - |  |  | - |
Cancelled |  |  | - |  |  | - |  |  | - |  |  | - |
Exercised |  |  | - |  |  | - |  |  | - |  |  | - |
Expired |  |  | (47,500) |  |  | 6.76 |  |  | - |  |  | - |
Forfeited |  |  | - |  |  | - |  |  | - |  |  | - |
Balance, December 31, 2016 |  |  | 1,165,850 |  | $ | 4.24 |  |  | 6.88 |  | $ | 1.61 |
Vested, December 31, 2016 |  |  | 988,687 |  | $ | 3.99 |  |  | 6.54 |  | $ | 1.87 |
As of December 31, 2016, total unrecognized compensation costs related to non-vested stock-based compensation arrangements granted under the Company’s 2010 Plan, 2013 Plan and 2015 Plan was $721,396 and the weighted-average period of years expected to recognize those costs was 2.17 years. Stock-based compensation expense related to 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 |  | Nine Months Ended |
|  | December 31, |  | December 31, |
|  | 2016 |  | 2015 |  | 2016 |  | 2015 |
Stock-based compensation expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of services |  | $ | 1,227 |  | $ | 1,227 |  | $ | 3,681 |  | $ | 3,682 |
General and administrative |  |  | 349,288 |  |  | 25,280 |  |  | 840,592 |  |  | 175,608 |
|  | $ | 350,515 |  | $ | 26,507 |  | $ | 844,273 |  | $ | 179,290 |
Warrants Warrants consisted of the following for the nine months ended December 31, 2016:
|  | Weighted |  |  |
|  | Average |  |  |
|  | Per Share |  |  |
|  | Intrinsic |  | Number of |
|  | Value |  | Warrants |
Outstanding at March 31, 2016 |  | $ | 3.12 |  |  | 2,091,166 |
Granted |  |  | - |  |  | 29,000 |
Exercised |  |  | 3.76 |  |  | (150,000) |
Cancelled |  |  | - |  |  | - |
Outstanding at December 31, 2016 |  | $ | 3.15 |  |  | 1,970,166 |
|  |  |  | Weighted |  |  |  |  | Weighted |
|  |  |  | Average |  |  |  |  | Average |
Exercise Price Per | Warrants | Remaining | Warrants |  | Exercise Price Per |
Share | Outstanding | Contractual Life | Exercisable |  | Share |
$4.00-$5.00 |  |  | 188,500 |  |  | 1.10 |  |  | 188,500 |  | $ | 4.47 |
$9.00-$10.00 |  |  | 1,781,666 |  |  | 3.79 |  |  | 1,781,666 |  |  | 9.37 |
$4.00-$10.00 |  |  | 1,970,166 |  |  | 3.53 |  |  | 1,970,166 |  | $ | 8.90 |
Authorized stock At December 31, 2016, 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 preferred stock, the exercise of all outstanding warrants exercisable for shares of common stock, and shares issuable in connection with exercises of awards granted and available for grant under the Company’s stock option plans. The number of shares of common stock reserved for these purposes is as follows at December 31, 2016:
Common stock issued and outstanding |  | 6,033,518 |
Warrants outstanding |  | 1,970,166 |
Stock options outstanding |  | 1,165,850 |
Preferred stock outstanding |  | 1,666,666 |
|  | 10,836,200 |

X
- References No definition available. + Details
Name: | us-gaap_StockholdersEquityNoteAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 310 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB Topic 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74567-122707 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 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(29)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 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 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 6: 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(31)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 7: 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 8: 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(30)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 9: 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 10: 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)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 11: 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 12: 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 13: 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 14: 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 15: 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 16: 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 + Details
Name: | us-gaap_StockholdersEquityNoteDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration