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Mezzanine and Stockholders' Equity | 6 Months Ended
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Jun. 30, 2019
Stockholders' Equity Note [Abstract] |
Mezzanine and Stockholders' Equity | Mezzanine and Stockholders’ Equity Mezzanine APC Pursuant to the shareholder agreements that APC has entered into with its shareholders, in the event of certain disqualifying events specified in the agreements (e.g., the shareholder's death, disability or retirement from the practice of medicine or breach of physician or other agreements with APC), APC has the option to purchase the shares of APC capital stock held by such shareholder for a purchase price specified therein. As APC's shares of capital stock are redeemable upon the occurrence of events that are not solely within APC's control, such APC shares are classified as mezzanine or temporary equity rather than as permanent equity. Accordingly, the Company recognizes noncontrolling interests in APC as mezzanine equity in the condensed consolidated financial statements. APC’s shares are not redeemable and it is not probable that the shares will become redeemable as of June 30, 2019 and December 31, 2018. On December 18, 2018, the Company entered into a settlement agreement and mutual release with former APCN shareholders to repurchase all the equity interests in APC previously held by these shareholders. APC paid approximately $1.7 million to repurchase 1,662,571 shares of common stock. Stockholders’ Equity As of the date of this Report, 480,212 holdback shares have not been issued to certain former NMM shareholders who were NMM shareholders at the time of Closing of the Merger, as they have yet to submit properly completed letters of transmittal to ApolloMed in order to receive their pro rata portion of ApolloMed common stock and warrants as contemplated under the Merger Agreement. Pending such receipt, such former NMM shareholders have the right to receive, without interest, their pro rata share of dividends or distributions with a record date after the effectiveness of the Merger. The condensed consolidated financial statements have treated such shares of common stock as outstanding, given the receipt of the letter of transmittal is considered perfunctory and the Company is legally obligated to issue these shares in connection with the Merger. See options and warrants section below for common stock issued upon exercise of stock options and stock purchase warrants. Options The Company’s outstanding stock options consisted of the following:
| Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Options outstanding at January 1, 2019 | 647,240 |  |  | $ | 5.62 |  |  | 4.13 |  |  | $ | 9.2 |
Options granted | 45,000 |  |  | 18.11 |  |  | — |  |  | — |
Options exercised | (111,000 | ) |  | 4.56 |  |  | — |  |  | 1.4 |
Options forfeited | — |  |  | — |  |  | — |  |  | — |
Options outstanding at June 30, 2019 | 581,240 |  |  | $ | 6.79 |  |  | 3.44 |  |  | $ | 5.8 |
Options exercisable at June 30, 2019 | 547,490 |  |  | $ | 5.74 |  |  | 3.18 |  |  | $ | 5.8 |
During the six months ended June 30, 2019 and 2018, stock options were exercised for 111,000 and 240,500 shares, respectively, of the Company’s common stock, which resulted in proceeds of approximately $0.5 million and $0.8 million, respectively. The exercise price range from $1.50 to $5.79 per share for the exercises during the six months ended June 30, 2019 and ranged from $0.01 to $10.00 per share for the exercises during the six months ended June 30, 2018. During the six months ended June 30, 2018 stock options were exercised pursuant to the cashless exercise provision of the option agreement, with respect to 60,536 shares of the Company’s common stock, which resulted in the Company issuing 47,576 net shares. During the six months ended June 30, 2019, the Company granted 45,000 stock options to certain ApolloMed board members which were recognized at fair value, as determined using the Black-Scholes option pricing model and the following assumptions:
| June 30, 2019
Expected Term | 3.0 years |
Expected volatility | 100.27 | %
Risk-free interest rate | 2.51 | %
Market value of common stock | $ | 18.11 |
Annual dividend yield | — | %
Forfeiture rate | 0 | %
During the six months ended June 30, 2019, the Company recorded approximately $0.2 million of share-based compensation expense associated with the issuance of restricted shares of common stock and vesting of stock options which is included in General and administrative expenses in the accompanying condensed consolidated statement of income. Outstanding stock options granted to primary care physicians to purchase shares of APC’s common stock consisted of the following:
| Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Options outstanding at January 1, 2019 | 853,800 |  |  | $ | 0.167 |  |  | 0.75 |  |  | $ | 0.5 |
Options granted | — |  |  | — |  |  | — |  |  | — |
Options exercised | — |  |  | — |  |  | — |  |  | — |
Options expired/forfeited | — |  |  | — |  |  | — |  |  | — |
Options outstanding and exercisable at June 30, 2019 | 853,800 |  |  | $ | 0.167 |  |  | 0.25 |  |  | $ | 0.5 |
The aggregate intrinsic value is calculated as the difference between the exercise price and the estimated fair value of common stock as of June 30, 2019. Share-based compensation expense related to option awards granted to primary care physicians to purchase shares of APC’s common stock, are recognized over their respective vesting periods, and consisted of the following:
| Three Months Ended June 30,
| 2019 |  | 2018
Share-based compensation expense: |  |  |
General and administrative | $ | 202,382 |  |  | $ | 202,382 |
| $ | 202,382 |  |  | $ | 202,382 |
| Six Months Ended June 30,
| 2019 |  | 2018
Share-based compensation expense: |  |  |
General and administrative | $ | 404,764 |  |  | $ | 404,764 |
| $ | 404,764 |  |  | $ | 404,764 |
The remaining unrecognized share-based compensation expense of stock option awards granted to primary care physicians to purchase shares of APC’s common stock as of June 30, 2019 was $0.2 million which is expected to be recognized over the remaining term of 3 months. Warrants The Company’s outstanding warrants consisted of the following:
| Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Warrants outstanding at January 1, 2019 | 3,331,995 |  |  | $ | 9.93 |  |  | 2.97 |  |  | $ | 33.1 |
Warrants granted | — |  |  | — |  |  | — |  |  | — |
Warrants exercised | (41,624 | ) |  | 9.41 |  |  | — |  |  | 0.3 |
Warrants expired/forfeited | — |  |  | — |  |  | — |  |  | — |
Warrants outstanding at June 30, 2019 | 3,290,371 |  |  | $ | 9.93 |  |  | 2.48 |  |  | $ | 22.3 |
Exercise Price Per Share |  | Warrants Outstanding |  | Weighted Average Remaining Contractual Life |  | Warrants Exercisable |  | Weighted Average Exercise Price Per Share
$ | 9.00 |  |  | 1,053,269 |  |  | 1.29 |  | 1,053,269 |  |  | 9.00 |
10.00 |  |  | 1,408,220 |  |  | 2.80 |  | 1,408,220 |  |  | 10.00 |
11.00 |  |  | 828,882 |  |  | 3.44 |  | 828,882 |  |  | 11.00 |
9.00 –11.00 |  |  | 3,290,371 |  |  | 2.48 |  | 3,290,371 |  |  | $ | 9.93 |
During the six months ended June 30, 2019 and 2018, common stock warrants were exercised for 41,624 and 210,625 shares, respectively, of the Company’s common stock, which resulted in proceeds of approximately $0.4 million and $1.5 million, respectively. The exercise price ranged from $9.00 to $11.00 per share for the exercises during the six months ended June 30, 2019 and $4.00 to $10.00 during the six months ended June 30, 2018. Treasury Stock APC owned 1,775,561 and 1,682,110 shares of ApolloMed’s common stock as of June 30, 2019 and December 31, 2018, which are legally issued and outstanding but excluded from shares of common stock outstanding in the condensed consolidated financial statements, as such shares are treated as treasury shares for accounting purposes. Pursuant to the issuance of the Holdback Shares (see Note 14), 93,451 shares issued to APC are treated as treasury shares. The remaining treasury shares of 168,493 were repurchased from the former APCN shareholders in 2018. Dividends During the six months ended June 30, 2019 and 2018, APC paid dividends of $10.0 million and $2.0 million, respectively. During the six months ended June 30, 2019, CDSC paid dividends of $1.2 million.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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