Stockholders' equity | 9 Months Ended |
Jun. 30, 2014 |
Stockholders' equity [Abstract] | ' |
Stockholders' equity | ' |
9. Stockholders' Equity |
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Stock Options |
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On January 8, 2013, our Board of Directors approved the adoption of the SpendSmart Payments Company 2013 Equity Incentive Plan |
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(the “2013 Plan”). The 2013 Plan was approved by the Company's shareholders on February 15, 2013. On April 21, 2014, our Board of Directors approved an amendment to our 2013 Plan to increase the total number of shares of common stock that may be issued pursuant to stock awards under the 2013 Plan from 3,000,000 to 10,000,000 shares of common stock. On June 16, 2014, the 2013 Plan was amended by a vote of the Company's stockholders to increase the total number of shares of common stock that may be issued pursuant to stock awards under the 2013 Plan from 3,000,000 to 10,000,000 shares of common stock. The 2013 Plan provides for granting of stock-based awards including: incentive stock options, non-statutory stock options, stock bonuses and rights to acquire restricted stock. On August 4, 2011, our Board of Directors approved the adoption of the SpendSmart Payments Company 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan provides for granting of stock-based awards including: incentive stock options, non-statutory stock options, stock bonuses and rights to acquire restricted stock. The total number of shares of common stock that may be issued pursuant to stock awards under the Plan shall not exceed in the aggregate 1,666,667 shares of the common stock of our Company. We also have a stockholder-approved Plan (the IdeaEdge, Inc. 2007 Equity Incentive Plan - the “2007 Plan”, previously approved by our shareholders). The 2007 Plan has similar provisions and purposes as the 2011 Plan. The total number of shares of common stock that may be issued pursuant to stock awards under the 2007 Plan (as amended) shall not exceed in the aggregate 266,667 shares of the common stock of our Company. With shareholder approval of the 2013 Plan, our Board has expressed its intentions to issue no more shares under the 2011 and 2007 Plans. |
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Through June 30, 2014, we have outstanding and vested a total of 6,306,667 and 3,295,880, respectively, of incentive and nonqualified stock options granted under the Plans, all of which we have estimated will eventually vest. All of the options have terms of five years with expiration dates ranging from July 2016 to June 2019. |
Stock Option Plans |
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The Company's stock option plans are administered by the Board of Directors, which determines the terms and conditions of the options granted, including exercise price, number of options granted and vesting period of such options. |
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For the three and nine months ended June 30, 2014, we issued 340,000 and 4,755,000 options, as follows. On March 19, 2014, our Company granted options to purchase up to 405,000 shares of our common stock to our Board of Directors. The options vest immediately; have an exercise price of $0.87 per share; and expire five years after the date of grant. Each of the following Board members received 45,000 options each related to this issuance: Joe Proto, Isaac Blech, Alex Minicucci, William Hernandez, Cary Sucoff, Patrick Kolenik, Chris Leong, Jerold Rubinstein, and Mike McCoy. The fair value at grant date of these options was $247,939 and the entire amount was expensed during the period ended June 30, 2014. |
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In addition, the Company granted additional options to purchase up to 1,850,000 shares of our common stock to our Board of Directors on March 19, 2014. One half of the options vest immediately with the remaining options vesting on the one year anniversary of the grant date; have an exercise price of $0.87 per share; and expire five years after the date of grant. These options were issued as follows: Joe Proto received 500,000 options, Isaac Blech received 500,000 options, William Hernandez received 300,000 options, Cary Sucoff received 250,000 options, Patrick Kolenik received 200,000 options, and Mike McCoy received 100,000 options. The fair value at grant date of these options was $1,068,350 and the amount expensed for the three and nine months ended June 30, 2014 was $129,695 and $713,857, respectively. |
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In March 2014, our Company granted options to purchase up to 350,000 shares of our common stock to Alex Minicucci. One fourth of the options vest immediately with the remaining options vesting over the next three years; have an exercise price of $1.15 per share; and expire five years after the date of grant. The fair value at grant date of these options was $193,925 and the amount expensed for the three and nine months ended June 30, 2014 was $13,209 and $72,503, respectively. |
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In March 2014, our Company granted options to purchase up to 400,000 shares of our common stock to William Hernandez. One fourth of the options vest immediately with the remaining options vesting over the next three years; have an exercise price of $1.15 per share; and expire five years after the date of grant. The fair value at grant date of these options was $221,629 and the amount expensed for the three and nine months ended June 30, 2014 was $15,096 and $82,861, respectively. |
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In March 2014, our Company granted options to purchase up to 1,410,000 shares of our common stock to twenty-four employees. The options vest over three years; have an exercise price of $1.15 per share; and expire five years after the date of grant. The fair value at grant date of these options was $781,243 and the amount expensed for the three and nine months ended June 30, 2014 was $52,582 and $291,454, respectively. |
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Warrants |
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In recompense for services performed on our behalf, we issued warrants to purchase up to 0 and 138,333 shares of our common stock during the three and nine months ended June 30, 2014, including a five-year warrant to purchase up to 133,333 shares (exercise price of $1.95 per share) to a member of our Board of Directors and a five-year warrant to purchase up to 5,000 shares at $1.95 to our CFO (Chord Advisors, LLC). The aggregate expense recorded for the three and nine months ended June 30, 2014 for these issuances was $22,643 and $74,737, respectively. Through June 30, 2014, we have not issued any warrants to advisors, consultants and in connection with the purchase of intellectual property. Warrants to purchase up to 57,334 shares of common stock have expired. Warrants to purchase up to 3,750,658 shares of common stock remain outstanding at June 30, 2014, of which 3,440,288 have vested. |
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For the three and nine months ended June 30, 2014, we issued 0 and 16,489,704 warrants to new investors. |
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From inception through June 30, 2014, we have issued warrants to purchase up to 22,835,591 shares of our common stock to investors (and as compensation to third parties in connection with investments) related to the sale of our common stock, 21,987,562 of which remain outstanding net of exercises, cancellations and expirations (all of which are fully vested). |
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The numbers and exercise prices of all options and warrants outstanding at June 30, 2014 are as follows: |
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| Weighted | | | |
Shares | Average | Expiration | | |
Outstanding | Exercise | Fiscal Period | | |
| Price | | | |
35,006 | 7.63 | 4th Qtr, 2014 | | |
81,973 | 7.77 | 1st Qtr, 2015 | | |
78,099 | 7.81 | 2nd Qtr, 2015 | | |
10,599 | 10.02 | 3rd Qtr, 2015 | | |
83,917 | 3.99 | 4th Qtr, 2015 | | |
479,245 | 7.54 | 1st Qtr, 2016 | | |
872,800 | 7.24 | 2nd Qtr, 2016 | | |
961,032 | 6.41 | 3rd Qtr, 2016 | | |
1,263,960 | 6.84 | 4th Qtr, 2016 | | |
521,811 | 7.78 | 1st Qtr, 2017 | | |
859,749 | 6.2 | 2nd Qtr, 2017 | | |
1,076,476 | 7.66 | 3rd Qtr, 2017 | | |
1,932,539 | 6.66 | 4th Qtr, 2017 | | |
862,339 | 6.56 | 1st Qtr, 2018 | | |
133,333 | 1.95 | 1st Qtr, 2019 | | |
22,318,675 | 1.09 | 2nd Qtr, 2019 | | |
340,000 | 1.15 | 2nd Qtr, 2019 | | |
133,334 | 7.05 | 1st Qtr, 2023 | | |
32,044,887 | | | | |
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Stock-based Compensation |
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During the three and nine months ended June 30, 2014, we recognized stock-based compensation expense totaling $884,310 and $4,361,251 in connection with the issuance of stock options and warrants issued to employees, directors, advisors and consultants (not including shares of stock issued directly for services). For purposes of accounting for stock-based compensation, the fair value of each award is estimated on the date of grant (or performance of the contracted services as appropriate) using the Black-Scholes-Merton option pricing model. The following weighted average assumptions were utilized for the calculations of newly issued options and warrants during the nine months ended June 30, 2014: |
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Expected life (in years) | | | 4.14 years |
Weighted average volatility | | | 89.28 | % |
Forfeiture rate | | | 11.34 | % |
Risk-free interest rate | | | 1.37 | % |
Expected dividend rate | | | 0 | % |
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At June 30, 2014, the weighted average exercise price of vested options and warrants outstanding (issued in connection with stock-based compensation) was $5.13 per share while the corresponding weighted average remaining contractual period was approximately 38.5 months. As of June 30, 2014, $2,813,245 of total unrecognized compensation expense related to unvested stock-based compensation is expected to be recognized through June 2018. |