• Filing Date: 2016-03-30
  • Form Type: 10-K
  • Description: Annual report
v3.3.1.900
STOCK AWARDS, WARRANTS AND OPTIONS
12 Months Ended
Dec. 31, 2015
STOCK AWARDS, WARRANTS AND OPTIONS
4.    STOCK AWARDS, WARRANTS AND OPTIONS
 
Warrants
 
The following table summarizes all warrant activity for the years ended December 31, 2015 and 2014:
 
 
 
Warrants
 
Weighted Average 
Exercise Price
 
Outstanding at January 1, 2014
 
 
332,281
 
$
17.20
 
Expired
 
 
(28,400)
 
 
94.00
 
Outstanding at December 31, 2014
 
 
303,881
 
$
10.02
 
Exercised
 
 
(15,401)
 
 
2.27
 
Expired
 
 
(52,650)
 
 
47.00
 
Outstanding at December 31, 2015
 
 
235,830
 
$
2.27
 
 
The following table summarizes all outstanding warrants to purchase shares of the Company’s common stock as of December 31, 2015:
 
At December 31, 2015
 
Grant Date
 
Warrants
Outstanding
 
Weighted
Average
Exercise Price
 
Expiration
Date
 
4/4/2012
 
 
187
 
$
2.27
 
4/4/2017
 
11/20/2013
 
 
235,643
 
$
2.27
 
11/20/2018
 
 
 
 
235,830
 
 
 
 
 
 
 
Restricted Stock
 
In August 2014, the Company granted 10,000 shares of restricted stock to one of its consultants in consideration of services to be rendered. This restricted stock grant was to vest monthly over a period of one year. In February 2015, the Company terminated the agreement with the consultant effective March 2015 and therefore, no additional shares will be issued pursuant to the restricted stock grant. For the year ended December 31, 2015, the Company issued 1,666 shares of that restricted common stock grant, which were valued at approximately $8,588 in the aggregate. The fair value of the restricted stock was determined using the Company’s closing stock price on the vesting date.
 
Stock Options
 
The Company’s Board of Directors (the “Board”) has approved four stock option plans: (i) the Amended and Restated 2005 Stock Option Plan, (the “2005 Plan”), (ii) the 2006 Stock Option Plan, (iii) the 2012 Restated Equity Incentive Plan (which has superseded the 2006 Stock Option Plan) (the “2012 Plan”), and (iv) the 2012 Non-Employee Director Stock Option Plan (the “2012 Non-Employee Director Plan”).
 
On August 10, 2005, the Company adopted the 2005 Plan. On July 26, 2010, the Company’s stockholders approved an amendment to the 2005 Plan increasing the total number of shares authorized for issuance thereunder to 190,000. Under the 2005 Plan, incentives may be granted to officers, employees, directors, consultants and advisors. Incentives under the 2005 Plan may be granted in any one or a combination of the following forms: (i) incentive stock options and non-statutory stock options, (ii) stock appreciation rights, (iii) stock awards, (iv) restricted stock, and (v) performance shares.
 
At the time the merger between Capricor and Nile became effective, 4,149,710 shares of common stock were reserved under the 2012 Plan for the issuance of stock options, stock appreciation rights, restricted stock awards and performance unit/share awards to employees, consultants and other service providers. Included in the 2012 Plan are the shares of common stock that were originally reserved under the 2006 Stock Option Plan. Under the 2012 Plan, each stock option granted will be designated in the award agreement as either an incentive stock option or a nonstatutory stock option. Notwithstanding such designation, however, to the extent that the aggregate fair market value of the shares with respect to which incentive stock options are exercisable for the first time by the participant during any calendar year (under all plans of the Company and any parent or subsidiary) exceeds $100,000, such options will be treated as nonstatutory stock options.
 
At the time the merger between Capricor and Nile became effective, 2,697,311 shares of common stock were reserved under the 2012 Non-Employee Director Plan for the issuance of stock options to members of the Board whom are not employees of the Company.
 
Each of the Company’s stock option plans are administered by the Board, or a committee appointed by the Board, which determines the recipients and types of awards to be granted, as well as the number of shares subject to the awards, the exercise price and the vesting schedule. Currently, stock options are granted with an exercise price equal to the closing price of the Company’s common stock on the date of grant, and generally vest over a period of one to four years. The term of stock options granted under each of the plans cannot exceed ten years.
 
The estimated weighted average fair value of the options granted during 2015 and 2014 were approximately $3.84 and $4.40 per share, respectively.
 
The Company estimates the fair value of each option award using the Black-Scholes option-pricing model. The Company used the following assumptions to estimate the fair value of stock options issued in the years ended December 31, 2015 and 2014:
 
 
 
December 31, 2015
 
December 31, 2014
 
Expected volatility
 
 
76% - 82%
 
 
112% - 117%
 
Expected term
 
 
5-7 years
 
 
7 years
 
Dividend yield
 
 
0%
 
 
0%
 
Risk-free interest rates
 
 
0.3% - 2.1%
 
 
2.2%
 
 
Employee and non-employee stock-based compensation expense for the years ended December 31, 2015 and 2014 was as follows:
 
 
2015
 
2014
 
 
 
 
 
 
 
General and administrative
 
$
1,276,370
 
$
345,682
 
Research and development
 
 
288,265
 
 
134,555
 
Total
 
$
1,564,635
 
$
480,237
 
 
The following table summarizes information about stock options outstanding and exercisable at December 31, 2015:
 
Shares Outstanding
 
 
 
 
 
Weighted Average
 
Weighted Average
 
Range of Ex. Prices
 
Shares Outstanding
 
Term (yrs.)
 
Exercise Price
 
$0.16 - $0.19
 
 
100,627
 
 
2.80
 
$
0.17
 
$0.30 - $0.37
 
 
4,360,116
 
 
6.36
 
 
0.36
 
$0.87
 
 
56,021
 
 
2.95
 
 
0.87
 
$3.58 - $5.78
 
 
1,443,948
 
 
9.25
 
 
5.15
 
$9.14 - $12.00
 
 
33,011
 
 
8.38
 
 
11.34
 
$18.50 - $28.50
 
 
3,600
 
 
0.28
 
 
28.08
 
 
 
 
5,997,323
 
 
6.97
 
$
1.59
 
 
Shares Exercisable
 
 
 
 
 
Weighted Average
 
Weighted Average
 
Range of Ex. Prices
 
Shares Exercisable
 
Term (yrs.)
 
Exercise Price
 
$0.16 - $0.19
 
 
100,627
 
 
2.80
 
$
0.17
 
$0.30 - $0.37
 
 
3,999,627
 
 
6.28
 
 
0.36
 
$0.87
 
 
56,021
 
 
2.95
 
 
0.87
 
$3.58 - $5.78
 
 
346,586
 
 
9.04
 
 
5.32
 
$9.14 - $12.00
 
 
6,341
 
 
8.12
 
 
12.00
 
$18.50 - $28.50
 
 
3,600
 
 
0.28
 
 
28.08
 
 
 
 
4,512,802
 
 
6.37
 
$
0.78
 
 
As of December 31, 2015, the total unrecognized fair value compensation cost related to non-vested stock options was approximately $4.2 million, which is expected to be recognized over approximately 3.0 years.
 
Common stock, stock options or other equity instruments issued to non-employees (including consultants) as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued (unless the fair value of the consideration received can be more reliably measured). The fair value of stock options is determined using the Black-Scholes option-pricing model and is periodically re-measured as the underlying options vest. The fair value of any options issued to non-employees is recorded as an expense over the applicable vesting periods.
 
The following is a schedule summarizing employee and non-employee stock option activity for the years ended December 31, 2015 and 2014:
 
 
 
Number of 
Options
 
Weighted Average 
Exercise Price
 
Aggregate
Intrinsic Value
 
Outstanding at January 1, 2014
 
 
4,888,519
 
$
0.51
 
 
 
 
Granted
 
 
368,154
 
 
5.01
 
 
 
 
Exercised
 
 
(15,139)
 
 
0.32
 
 
 
 
Expired/Cancelled
 
 
(236,834)
 
 
2.39
 
 
 
 
Outstanding at December 31, 2014
 
 
5,004,700
 
$
0.75
 
$
15,014,100
 
Granted
 
 
1,311,137
 
 
5.31
 
 
 
 
Exercised
 
 
(33,000)
 
 
0.32
 
 
 
 
Expired/Cancelled
 
 
(285,514)
 
 
4.03
 
 
 
 
Outstanding at December 31, 2015
 
 
5,997,323
 
$
1.59
 
$
8,876,038
 
Exercisable at December 31, 2015
 
 
4,512,802
 
$
0.78
 
$
10,334,317
 
 
The aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock for each of the respective periods.
 
The aggregate intrinsic value of options exercised was $131,708 and $82,058 for the years ended December 31, 2015 and 2014, respectively.