Equity Instruments | 3 Months Ended |
Mar. 31, 2015 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Equity Instruments | Note 6 – Equity Instruments |
Options |
In 2010, Ampio shareholders approved the adoption of a stock and option award plan (the “2010 Plan”), under which shares were reserved for future issuance under restricted stock awards, options, and other equity awards. The 2010 Plan permits grants of equity awards to employees, directors and consultants. The shareholders have approved a total of 11.7 million shares reserved for issuance under the 2010 plan. |
Ampio has computed the fair value of all options granted using the Black-Scholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding components of the model, including the estimated fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to valuation. Ampio calculates its volatility assumption using the actual changes in the market value of our stock. Ampio has estimated a forfeiture rate of 5.0% based upon historical experience; this is an estimate of options granted that are expected to be forfeited or cancelled before becoming fully vested. Ampio estimates the expected term based on the average of the vesting term and the contractual term of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. During the three months ended March 31, 2015, Ampio granted 30,000 options at a price of $3.46 to employees which represented the fair market value on date of the grants. Ampio has computed the fair value of all options granted during the three months ended March 31, 2015 using the following assumptions: |
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Expected volatility | | | 104 | % | | | | | | | | | | | | |
Risk free interest rate | | | 1.5 | % | | | | | | | | | | | | |
Expected term (years) | | | 5 | | | | | | | | | | | | | |
Dividend yield | | | 0 | % | | | | | | | | | | | | |
Ampio stock option activity is as follows: |
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| | Number of | | | Weighted | | | Weighted Average | | | Aggregate Fair | |
Options | Average | Remaining | Value |
| Exercise Price | Contractual Life | |
Outstanding December 31, 2014 | | | 6,568,248 | | | $ | 3.82 | | | | 7.66 | | | $ | 17,090,000 | |
| | | | |
Granted | | | 30,000 | | | $ | 3.46 | | | | | | | | | |
Exercised | | | — | | | $ | — | | | | | | | | | |
Forfeited/Cancelled | | | — | | | $ | — | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Outstanding March 31, 2015 | | | 6,598,248 | | | $ | 3.82 | | | | 7.15 | | | $ | 17,169,000 | |
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Exercisable at March 31, 2015 | | | 5,437,604 | | | $ | 3.48 | | | | 6.74 | | | $ | 12,539,000 | |
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Available for grant at March 31, 2015 | | | 3,717,773 | | | | | | | | | | | | | |
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Stock options outstanding and exercisable at March 31, 2015 are summarized in the table below: |
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Range of Exercise Prices | | Number of | | | Weighted | | | Weighted Average | | | | | |
Options | Average | Remaining | | | | |
Outstanding and | Exercise Price | Contractual Lives | | | | |
Exercisable | | | | | | |
$1.03 - $4.00 | | | 4,423,248 | | | $ | 2.33 | | | | 6.58 | | | | | |
$4.01 - $7.00 | | | 1,240,000 | | | $ | 6.17 | | | | 8.59 | | | | | |
$7.01 - $8.93 | | | 935,000 | | | $ | 7.73 | | | | 7.92 | | | | | |
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| | | 6,598,248 | | | $ | 3.82 | | | | 7.15 | | | | | |
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Pursuant to the Luoxis 2013 Stock Option Plan (the “2013 Plan”), 5.0 million shares of its common stock were reserved for issuance. Luoxis stock option activity is as follows: |
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| | Number of | | | Weighted | | | Weighted Average | | | Aggregate Fair | |
Options | Average | Remaining | Value |
| Exercise Price | Contractual Life | |
Outstanding December 31, 2014 | | | 2,835,000 | | | $ | 1.19 | | | | 8.85 | | | $ | 2,541,000 | |
| | | | |
Granted | | | — | | | $ | — | | | | | | | | | |
Exercised | | | — | | | $ | — | | | | | | | | | |
Forfeited/Cancelled | | | — | | | $ | — | | | | | | | | | |
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Outstanding March 31, 2015 | | | 2,835,000 | | | $ | 1.19 | | | | 8.61 | | | $ | 2,541,000 | |
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Exercisable at March 31, 2015 | | | 975,000 | | | $ | 1 | | | | 8.26 | | | $ | 687,000 | |
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Available for grant at March 31, 2015 | | | 2,165,000 | | | | | | | | | | | | | |
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Vyrix has also adopted a 2013 Stock Option Plan (the “Vyrix 2013 Plan”) which reserved 5.0 million shares of its common stock for issuance to officers, employees and consultants. Vyrix stock option activity is as follows: |
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| | Number of | | | Weighted | | | Weighted Average | | | Aggregate Fair | |
Options | Average | Remaining | Value |
| Exercise Price | Contractual Life | |
Outstanding December 31, 2014 | | | 950,000 | | | $ | 0.7 | | | | 9.04 | | | $ | 416,000 | |
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Granted | | | — | | | $ | — | | | | | | | | | |
Exercised | | | — | | | $ | — | | | | | | | | | |
Forfeited/Cancelled | | | — | | | $ | — | | | | | | | | | |
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Outstanding March 31, 2015 | | | 950,000 | | | $ | 0.7 | | | | 8.79 | | | $ | 417,000 | |
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Exercisable at March 31, 2015 | | | 475,000 | | | $ | 0.7 | | | | 8.79 | | | $ | 208,000 | |
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Available for grant at March 31, 2015 | | | 4,050,000 | | | | | | | | | | | | | |
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Stock-based compensation expense related to the fair value of stock options was included in the consolidated statements of operations as research and development expenses and general and administrative expenses as set forth in the table below. Ampio and its subsidiaries determined the fair value as of the date of grant using the Black-Scholes option pricing model and expenses the fair value ratably over the vesting period. The following table summarizes stock-based compensation expense for the three months ended March 31, 2015 and 2014: |
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| | Three Months Ended March 31, | | | | | | | | | |
| | 2015 | | | 2014 | | | | | | | | | |
Research and development expenses | | | | | | | | | | | | | | | | |
Stock options | | | | | | | | | | | | | | | | |
Ampio | | $ | 608,000 | | | $ | 638,000 | | | | | | | | | |
Luoxis | | | 107,000 | | | | 52,000 | | | | | | | | | |
Vyrix | | | 8,000 | | | | 29,000 | | | | | | | | | |
General and administrative expenses | | | | | | | | | | | | | | | | |
Common stock issued for services | | | 30,000 | | | | 30,000 | | | | | | | | | |
Stock options | | | | | | | | | | | | | | | | |
Ampio | | | 537,000 | | | | 299,000 | | | | | | | | | |
Luoxis | | | 138,000 | | | | 58,000 | | | | | | | | | |
Vyrix | | | 19,000 | | | | (55,000 | ) | | | | | | | | |
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| | $ | 1,447,000 | | | $ | 1,051,000 | | | | | | | | | |
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Unrecognized expense at March 31, 2015 | | | | | | | | | | | | | | | | |
Ampio | | $ | 2,623,000 | | | | | | | | | | | | | |
Luoxis | | $ | 1,129,000 | | | | | | | | | | | | | |
Vyrix | | $ | 194,000 | | | | | | | | | | | | | |
Weighted average remaining years to vest | | | | | | | | | | | | | | | | |
Ampio | | | 1.07 | | | | | | | | | | | | | |
Luoxis | | | 2.23 | | | | | | | | | | | | | |
Vyrix | | | 1.79 | | | | | | | | | | | | | |
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Warrants |
Ampio issued warrants in conjunction with its Senior Convertible Debentures, 2011 Private Placements and an underwritten public offering. A summary of all Ampio warrants is as follows: |
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| | Number of | | | Weighted | | | Weighted Average | | | | | |
Warrants | Average | Remaining | | | | |
| Exercise Price | Contractual Life | | | | |
| | | | | | | |
Outstanding December 31, 2014 | | | 516,329 | | | $ | 3.26 | | | | 1.44 | | | | | |
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Warrants exercised - Private/Registered Direct Placements | | | (15,001 | ) | | $ | 4.06 | | | | | | | | | |
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Outstanding March 31, 2015 | | | 501,328 | | | $ | 3.24 | | | | 1.16 | | | | | |
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Luoxis issued warrants to purchase 465,250 shares of common stock at a price of $1.00 exercisable one year after the final closing in connection with the private placement in May 2013. All of these warrants remain outstanding with a weighted average remaining contractual life of 3.17. |