4. STOCKHOLDERS' EQUITY
|3 Months Ended|
Mar. 31, 2016
|4. STOCKHOLDERS' EQUITY||
On March 18, 2015, the Company announced the closing of an underwritten sale of 1,225,000 shares of its common stock, as well as 183,750 additional shares of its common stock pursuant to the full exercise of the over-allotment option granted to the underwriters thereof, for gross proceeds of approximately $11.3 million. Net proceeds from this offering were approximately $10.2 million, net of underwriting discounts and offering expenses of approximately $1.1 million. The shares were sold under a shelf registration statement on Form S-3 (File No. 333-200638) that was declared effective by the SEC on December 23, 2014. In May 2016, the Company completed an underwritten public offering of its common stock, raising gross proceeds of approximately $14.1 million, (see Note 8 for additional details on the equity financing).
Equity incentive plan
The fair value of employee options granted was determined on the date of grant using the Black-Scholes option valuation model. The Black-Scholes model was developed for use in estimating the fair value of publicly traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. The Company's employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value estimate. Because there has been minimal data for the Company's stock and very little historical experience with the Company's stock options, similar public companies and a pro rata percentage of the Companys common stock were used for calculating ADMAs volatility for comparison and expectations as to the assumptions required for fair value computation using the Black-Scholes methodology.
Guidance for stock-based compensation requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has not experienced any material forfeitures of stock options and, as such, has not established a forfeiture rate since the stock options currently outstanding are primarily held by its senior management and directors. The Company will continue to evaluate the effects of such future potential forfeitures, as they may arise, to evaluate its estimated forfeiture rate.
The weighted average remaining contractual life of stock options outstanding and expected to vest at March 31, 2016 is 7.1 years. The weighted average remaining contractual life of stock options exercisable at March 31, 2016 is 6.1 years.
A summary of the Companys option activity under the 2007 Plan and 2014 Plan and related information is as follows:
Stock-based compensation expense for the three months ended March 31, 2016 and 2015 is as follows:
As of March 31, 2016, the total compensation expense related to unvested options not yet recognized totaled $2,469,668. The weighted average vesting period over which the total compensation expense will be recorded related to unvested options not yet recognized at March 31, 2016 was approximately 2.7 years.
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