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Stockholders' Equity | 6 Months Ended
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Sep. 30, 2017
Stockholders' Equity Note [Abstract] |
Stockholders’ Equity |
6. | Stockholders’ Equity
Series A Preferred Stock On October 14, 2015, the Company entered into a Securities Purchase Agreement (the “2015 SPA”) 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 (the “Series A Warrant”) to purchase one share of the Company’s common stock (“Common Stock”) at an exercise price of $9.00 per share. 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. The Series A Preferred Stock is mandatorily convertible not sooner than the earlier to occur of (i) the later of (x) January 31, 2017 or (y) 60 days after the date on which the Company files its quarterly report on Form 10-Q for the period ending September 30, 2016, or (ii) the date on which the Company receives the written, irrevocable decision of NMM not to require a redemption of the Series A Preferred Stock, if the Company receive aggregate gross proceeds of not less than $5,000,000 in one or more transactions for the sale of the Company’s equity or convertible securities (other than transactions with NMM). The Company has not received at least $5,000,000 in one or more transactions for the sale of its equity or convertible securities to parties other than NMM. 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 Series A Warrant is not separately transferable from the Series A Preferred Stock. See Note 2 for information on the fair value of the Series A Warrant. The units sold to NMM under the 2015 SPA initially had a redemption feature, however, as part of the proposed Merger between NMM and the Company (see Note 10), 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 with respect to its shares of Series A Preferred Stock and Series A Warrants. Series B Preferred Stock On March 30, 2016, the Company entered into an additional Securities Purchase Agreement (the “2016 SPA”) with NMM pursuant to which the Company sold to NMM, and NMM purchased from the Company, in a private offering of securities, 555,555 units, each unit consisting of one share of the Company’s Series B Preferred Stock and a stock purchase warrant (the “Series B Warrant”) to purchase one share of Common Stock at an exercise price of $10.00 per share. NMM paid the Company an aggregate $4,999,995 for the units. The Series B Preferred Stock has a liquidation preference in the amount of $9.00 per share plus any declared and unpaid dividends. The Series B can be voted for the number of shares of Common Stock into which the Series B Preferred Stock could then be converted, which initially is one-for-one. The Series B Preferred Stock is convertible into Common Stock, (i) at the option of NMM or (ii) mandatorily at any time prior to and including March 30, 2021, if the Company receives aggregate gross proceeds of not less than $5,000,000 in one or more transactions for the sale of the Company’s equity or convertible securities (other than transactions with NMM), 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. The Company has not received at least $5,000,000 in one or more transactions for the sale of its equity or convertible securities to parties other than NMM. The Series B Warrant may be exercised at any time after issuance and through March 30, 2021, for $10.00 per share, subject to adjustment in the event of stock dividends and stock splits. The Series B Warrant is not separately transferable from the Series B Preferred Stock. See Note 2 for information on the fair value of the Series B Warrant. Common Stock Issuance During the three months ended September 30, 2017, the Company received warrant exercise notices and proceeds with respect to 19,000 shares of Common Stock. The number of shares of Common Stock that are issued and outstanding as of September 30 and March 31, 2017 is 6,052,518 and 6,033,518, respectively. Common Stock is currently quoted on OTC Pink and traded under the symbol “AMEH.” The Company has applied for listing of its common stock on the NASDAQ Global Market effective as of the closing of the Merger. No assurance can be given that ApolloMed can meet the listing requirements for the NASDAQ Global Market, including at the closing of the Merger, or that ApolloMed’s application will ever be approved. Equity Incentive Plans On December 15, 2015, the Company’s Board of Directors (the “Board”) approved the Company’s 2015 Equity Incentive Plan (the “2015 Plan”), pursuant to which 1,500,000 shares of Common Stock were reserved for issuance thereunder. In addition, shares that are subject to outstanding grants under the Company’s 2010 Equity Incentive Plan and 2013 Equity Incentive 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 approved by the Company’s stockholders at the 2016 Annual Meeting of Stockholders that was held on September 14, 2016. As of September 30, 2017, there were approximately 941,000 shares available for future grants under the 2015 Plan. As of September 30, 2017, there were no shares available for future grants under the 2010 and 2013 Equity Incentive Plans. In May 2017, the Company filed an application with the California Department of Business Oversight (“DBO”), seeking qualification of securities issued under its 2010 and 2015 Equity Incentive Plans under California securities laws. On November 1, 2017, the DBO approved the Company’s qualification application, which qualification will continue to be effective until November 1, 2018. Options On April 6, 2017, the Company granted stock options to employees and a director to purchase up to 80,000 shares of Common Stock. Two of the options expire on the 5th anniversary date from date of grant and have an exercise price of $10.18 per share. The remaining options expire on the 10th anniversary date from date of grant and have an exercise price of $9.25 per share. The fair value of the stock option of $572,000 was computed using the Black-Scholes option pricing model, using the following assumptions: expected term – 3-6 years; stock price $9.25 per share; volatility – 109.95% - 134.83%; risk-free interest rate – 1.53% - 2.09%; and zero annual rate of quarterly dividend. All of these stock options vest over a period of 24 months from date of grant. Stock option activity for the six months ended September 30, 2017 is summarized below:
|  |  |  | Weighted |  | Weighted |  | Weighted |
|  |  |  | Average |  | Average |  | Average |
|  |  |  | Per Share |  | Remaining |  | Per Share |
|  |  |  | Exercise |  | Life |  | Intrinsic |
|  | Shares |  | Price |  | (Years) |  | Value |
Balance, March 31, 2017 |  |  | 1,165,350 |  | $ | 4.24 |  |  | 6.64 |  | $ | 4.86 |
Granted |  |  | 80,000 |  |  | 9.71 |  |  | - |  |  | - |
Exercised |  |  | - |  |  | - |  |  | - |  |  | - |
Cancelled/expired |  |  | (33,000) |  |  | 9.62 |  |  | - |  |  | - |
Balance, September 30, 2017 |  |  | 1,212,350 |  | $ | 4.42 |  |  | 6.36 |  | $ | 5.35 |
Vested, September 30, 2017 |  |  | 1,040,840 |  | $ | 4.04 |  |  | 5.92 |  | $ | 5.74 |
As of September 30, 2017, total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Company’s three Equity Incentive Plans was approximately $616,000 and the weighted-average period of years expected to recognize those costs was 1.6 years, which included stock options granted to our executive officers in April 2017 that have subsequently been deemed void and are currently planned to be cancelled without payment by the Company. Until the options are formally cancelled, the Company will continue to accrue compensation cost. The compensation cost with respect to the April 2017 stock options for the six months ended September 30, 2017 was approximately $143,000. None of such stock options have been exercised. 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 |  | Six Months Ended |
|  | September 30, |  | September 30, |
|  | 2017 |  | 2016 |  | 2017 |  | 2016 |
Stock-based compensation expense: |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of services |  | $ | - |  | $ | 1,227 |  | $ | - |  | $ | 2,454 |
General and administrative |  |  | 195,244 |  |  | 244,814 |  |  | 418,810 |  |  | 491,304 |
|  | $ | 195,244 |  | $ | 246,041 |  | $ | 418,810 |  | $ | 493,758 |
Warrants Warrants consisted of the following for the six months ended September 30, 2017:
|  | Weighted |  |  |
|  | Average |  |  |
|  | Per Share |  |  |
|  | Intrinsic |  | Number of |
|  | Value |  | Warrants |
Outstanding at March 31, 2017 |  | $ | 4.68 |  |  | 1,970,166 |
Granted |  |  | - |  |  | - |
Exercised |  |  | 5.09 |  |  | (19,000) |
Cancelled |  |  | - |  |  | - |
Outstanding at September 30, 2017 |  | $ | 1.34 |  |  | 1,951,166 |
|  |  |  |  |  | Weighted |  |  |  |  |  | Weighted |
|  |  |  |  |  | Average |  |  |  |  |  | Average |
Exercise Price Per |  |  | Warrants |  |  | Remaining |  |  | Warrants |  |  | Exercise Price Per |
Share |  |  | Outstanding |  |  | Contractual Life |  |  | Exercisable |  |  | Share |
| $4.00-$5.00 |  |  |  | 169,500 | [1] |  |  | 0.39 |  |  |  | 169,500 |  |  |  | 4.46 |
| $9.00-$10.00 |  |  |  | 1,781,666 | [2] |  |  | 3.04 |  |  |  | 1,781,666 |  |  |  | 9.37 |
| $4.00-$10.00 |  |  |  | 1,951,166 |  |  |  | 2.81 |  |  |  | 1,951,166 |  |  | $ | 8.94 |
[1] Such warrants outstanding as of September 30, 2017 comprise warrants issued in October 2009 in connection with the Company’s 10% Senior Subordinated Callable Convertible Notes and warrants issued in January 2013 in connection with the Company’s 9% Senior Subordinated Callable Convertible Promissory Notes. The 2009 warrants have expired as of the date of this Quarterly Report on Form 10-Q. The 2013 warrants may be exercised at an exercise price of $4.50 per share at any time until the end of January 2018. In addition, in November, 2016, in connection with the acquisition of BAHA, the Company issued to Scott Enderby, D.O., a warrant to purchase 24,000 shares of Common Stock at an exercise price of $4.50 per share. [2] In July 2014, in connection with the acquisition of SCHC, the Company issued to Stanley Lau, M.D., and Yih Jen Kok, M.D., warrants to purchase up to 100,000 shares of Common Stock (on a post stock-split basis) at an exercise price of $10.00 per share exercisable until July 21, 2018. In February 2015, in consideration of services rendered to the Company, the Company issued to RedChip Companies, Inc. a warrant to purchase up to 10,000 shares of Common Stock (on a post stock-split basis) at an exercise price of $9.00 per share exercisable until February 20, 2018. In connection with NMM’s investments in the Company, in October, 2015 and March 2016, respectively, the Company issued to NMM a stock purchase warrant (the “Series A Warrant”) to purchase up to 1,111,111 shares of Common Stock at an exercise price of $9.00 per share, and a stock purchase warrant (the “Series B Warrant”) to purchase up to 555,555 shares of Common Stock at an exercise price of $10.00 per share. In November, 2016, in connection with a promissory note issued to Liviu Chindris, M.D., which the Company has repaid in full, the Company issued to Dr. Chindris a warrant to purchase up to 5,000 shares of Common Stock at an exercise price of $9.00 per share. During the second quarter of fiscal year 2018, the Company received notices for, and proceeds of approximately $85,000 from, the exercise of warrants to purchase to 19,000 shares of Common Stock. In addition, during September 2017, the Company received notices for the exercise of warrants to purchase 21,000 shares of Common Stock for approximately $94,500. The Company, however, had not received proceeds from such exercise, and as a result, the related shares were not recorded as issued and outstanding. Authorized Stock As of September 30, 2017, the Company was authorized to issue up to 100,000,000 shares of Common Stock and 5,000,000 shares of its preferred stock. The number of shares of Series A Preferred Stock and Series B Preferred Stock that are issued and outstanding as of September 30, 2017 is 1,111,111 and 555,555, respectively. The number of shares of Common Stock that are issued and outstanding as of September 30, 2017 is 6,052,518. 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 affect the conversion of all outstanding preferred stock, the exercise of all outstanding warrants exercisable into shares of Common Stock, the conversion of all outstanding notes and accrued interest into shares of Common Stock, and shares granted and available for grant as stock options under the Company’s Equity Incentive Plans. The number of shares of Common Stock reserved for these purposes is as follows as of September 30, 2017:
For warrants outstanding |  |  | 1,951,166 |
For stock options outstanding |  |  | 1,212,350 |
For debt outstanding and accrued interest |  |  | 514,093 |
For preferred stock issued and outstanding |  |  | 1,666,666 |
Total |  |  | 5,344,275 |

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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 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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