|9 Months Ended|
Sep. 30, 2015
At the annual meeting of the Companys stockholders on June 4, 2015 (the 2015 Annual Meeting), the Companys stockholders approved an amendment to the Companys Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Companys common stock to 200,000,000 shares.
Issuance of Common Stock in Lieu of Cash
Under the terms of the Amended and Restated Non-Employee Director Compensation Plan, each non-employee member of the Companys Board of Directors may elect to receive all or part of his or her fees in shares of the Companys common stock. Director fees, whether paid in cash or in shares of common stock, are payable quarterly on the last day of each fiscal quarter. The number of shares of common stock issued to directors is determined by dividing the product of (a) the fees otherwise payable to each director in cash, times (b) the percentage of fees the director elected to receive in shares of common stock, by (c) the volume weighted average price per share of common stock over the last five trading days of the quarter. During the nine months ended September 30, 2015 and 2014, 128,598 shares and 97,573 shares, respectively, were issued to directors as payment for fees in lieu of cash.
Common Stock Warrants Requiring Liability Accounting
The net-cash settlement and down round provisions contained in warrants issued in a January 2013 financing transaction require derivative liability accounting treatment. Likewise, a down round provision contained in the terms of warrants issued by the Company in a July 2012 financing transaction also requires derivative liability accounting treatment. The fair value of all such warrants was calculated using the Monte Carlo simulation valuation method.
Assumptions used in calculating the fair value of the warrants at September 30, 2015 are noted below:
In addition to the assumptions above, the Company also takes into consideration whether it would participate in another round of equity financing and, if so, what the Company estimates the price would be for a share of its common stock at that time.
The fair values and the changes in fair values of the warrants accounted for as a derivative liability is reflected below:
Stock Incentive Plans
The Company has various share-based compensation plans and share-based compensatory contracts (collectively, the Plans). The Plans provide for the granting of share-based awards, such as incentive and non-qualified stock options, to employees, directors, consultants and advisors, and certain of the Plans provide for cash-based awards. Awards may be subject to a vesting schedule as set forth in individual award agreements.
In June 2013, the Companys stockholders approved the 2013 Incentive Compensation Plan, and at the 2015 Annual Meeting, the Companys stockholders approved the adoption of the MRI Interventions, Inc. Amended and Restated 2013 Incentive Compensation Plan (the Amended 2013 Plan). The material change effected in the Amended 2013 Plan was to increase the number of shares of the Companys common stock available for awards thereunder by 5,000,000 shares, resulting in a total of 6,250,000 shares of the Companys common stock being reserved for issuance under the Amended 2013 Plan. Of this amount, grants of 2,504,667 shares were outstanding as of September 30, 2015. Accordingly, 3,755,333 shares remained available for grants under the Amended 2013 Plan as of that date.
In December 2013, the Companys board of directors approved the 2013 Non-Employee Director Equity Incentive Plan (the Director Equity Plan). A total of 570,000 shares of the Companys common stock are reserved for issuance under the Director Equity Plan. The shares reserved for issuance under the Director Equity Plan are intended to be used for stock options granted pursuant to the terms of the Companys Non-Employee Director Compensation Plan (the Director Compensation Plan). As of September 30, 2015, awards for 435,000 shares had been issued under the Director Equity Plan. Accordingly, 155,000 shares remained available for awards under the Director Equity Plan as of that date. Should option grants pursuant to the Director Compensation Plan exceed the amount of shares available under the Director Equity Plan, the Company expects to continue granting such options under the terms of the Amended 2013 Plan described above.
As further discussed in Note 4, the Company, in April and May 2015, recorded $492,926 of share-based compensation expense, classified as restructuring costs in the accompanying 2015 condensed consolidated statements of operations, related to the modification of the terms of options held by certain former officers. In addition, effective April 1, 2015, a member of the Companys Board of Directors resigned. In recognition of the directors contributions to the Company, the Companys Board of Directors accelerated the vesting of two stock options previously awarded to the director and extended the exercise period through April 1, 2017 for all vested options held by the director. Prior to such extension, the exercise period under the options original terms was three months subsequent to the date the individual ceased to be a director of the Company. The Company revalued the directors stock option based on the modified terms described above and recorded share-based compensation expense of $12,005.
Activity under all of the Companys equity compensation plans during the nine months ended September 30, 2015 is summarized below:
The estimated grant date fair values of options granted during the nine months ended September 30, 2015 were calculated using the Black-Scholes valuation model, based on the following assumptions:
The Company records share-based compensation expense on a straight-line basis over the related vesting period. For the periods indicated below, share-based compensation expense, which includes the expense associated with the modification of option terms discussed above and in Note 4, related to options was:
As of September 30, 2015, there was unrecognized compensation expense of $2,050,240 related to outstanding stock options, which is expected to be recognized over a weighted average period of approximately 2.20 years.
Warrants have generally been issued for terms of up to five years. Common stock warrant activity for the nine months ended September 30, 2015 was as follows:
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef