Annual report pursuant to Section 13 and 15(d)

OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS

v3.20.1
OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS
12 Months Ended
Dec. 31, 2019
Disclosure Text Block Supplement [Abstract]  
Shareholders' Equity and Share-based Payments [Text Block]

NOTE 10 – OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS


BioSig Technologies, Inc.


2012 Equity Incentive Plan


On October 19, 2012, the Company’s Board of Directors approved the 2012 Equity Incentive Plan (“the “Plan”) and terminated the Long-Term Incentive Plan (the “2011 Plan”). The Plan provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to 9,474,450 (as amended) shares of the Company’s common stock to officers, directors, employees and consultants of the Company (as amended). Under the terms of the Plan the Company may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of the Company only and nonstatutory options. The Board of Directors of the Company or a committee thereof administers the Plan and determines the exercise price, vesting and expiration period of the grants under the Plan.


However, the exercise price of an Incentive Stock Option should not be less than 110% of fair value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair value for a grantee who is not 10% stockholder. The fair value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the administrator in good faith.


Additionally, the vesting period of the grants under the Plan will be determined by the administrator, in its sole discretion, with an expiration period of not more than ten years. The Company reserved 1,303,951 shares of its common stock for future issuance under the terms of the Plan.


During the year ended December 31, 2018, the Company granted an aggregate of 559,698 options to officers, directors and key consultants.


During the year ended December 31, 2018, the Company granted an aggregate of 897,050 stock grants to officers, employees and key consultants under the plan. See Note 9.


During the year ended December 31, 2019, the Company granted an aggregate of 1,599,053 options to officers, directors and key consultants.


During the year ended December 31, 2019, the Company granted an aggregate of 1,558,317 stock grants to officers, employees and key consultants under the plan. See Note 9.


Options


The following table presents information related to stock options at December 31, 2019:


Options Outstanding

 

 

Options Exercisable

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Exercisable

 

Exercise

 

 

Number of

 

 

Remaining Life

 

 

Number of

 

Price

 

 

Options

 

 

In Years

 

 

Options

 

$

2.51-5.00

 

 

 

1,533,361

 

 

 

7.7

 

 

$

1,168,361

 

 

5.01-7.50

 

 

 

2,124,110

 

 

 

5.1

 

 

 

1,552,044

 

 

7.51-10.00

 

 

 

323,333

 

 

 

8.0

 

 

 

153,612

 

 

 

 

 

 

3,980,804

 

 

 

6.3

 

 

 

2,874,017

 


A summary of the stock option activity and related information for the 2012 Plan for the years ended December 31, 2019 and 2018 is as follows:


                   

Weighted-Average

         
           

Weighted-Average

   

Remaining

   

Aggregate

 
   

Shares

   

Exercise Price

   

Contractual Term

   

Intrinsic Value

 

Outstanding at January 1, 2018

    3,404,131     $ 5.28       5.7     $ -  

Grants

    559,698     $ 4.65       10.0     $ -  

Exercised

    (140,001

)

  $ 4.40       -       -  

Canceled

    (688,000

)

  $ 4.64               -  

Outstanding at December 31, 2018

    3,135,828     $ 5.34       5.2     $ -  

Grants

    1,599,053       5.99       10.0     $ -  

Exercised

    (550,077

)

  $ 5.44                  

Canceled

    (204,000

)

  $ 5.51                  

Outstanding at December 31, 2019

    3,980,804     $ 5.58       6.3     $ 3,130,791  

Exercisable at December 31, 2019

    2,874,017     $ 5.47       5.1     $ 2,469,138  

The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the Company’s stock price of $5.92 as of December 31, 2019, which would have been received by the option holders had those option holders exercised their options as of that date.


Option valuation models require the input of highly subjective assumptions. The fair value of stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived using the Company’s own historical stock prices.  The Company accounts for the expected life of options based on the contractual life of options for non-employees.


For employees, the Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options.  The fair value of stock-based payment awards during the years ended December 31, 2019 and 2018 was estimated using the Black-Scholes pricing model.


On February 15, 2018, the Company granted 20,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $3.55 per share for a term of ten years with vesting immediately.


On May 4, 2018, the Company granted 226,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $4.43 per share for a term of ten years with vesting immediately.


On May 14, 2018, the Company granted 100,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $4.43 per share for a term of ten years with vesting immediately.


On October 16, 2018, the Company granted 34,566 options to purchase the Company stock in connection with the services rendered at the exercise price of $5.09 per share for a term of ten years with 17,283 vesting immediately and 17,283 vesting January 1, 2019.


On October 16, 2018, the Company granted 69,132 options to purchase the Company stock in connection with the services rendered at the exercise price of $5.09 per share for a term of ten years with 17,283 vesting immediately and 17,283 vesting January 1, 2019, 17,283 vesting January 1, 2020 and 17,283 vesting January 1, 2021.


On October 16, 2018, the Company granted 110,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $5.09 per share for a term of ten years vesting immediately.


The following assumptions were used in determining the fair value of employee options for the year ended December 31, 2018:


 

 

 

 

 

Risk-free interest rate

 

 

2.65% to 3.16

%

Dividend yield

 

 

0

%

Stock price volatility

 

 

92.08% to 94.10

%

Expected life

 

 

5 to 10 years

 

Weighted average grant date fair value

 

$

3.37

 


On January 22, 2019, the Company granted 460,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $4.33 per share for a term of ten years with quarterly vesting beginning April 1, 2019 for three years.


On March 14, 2019, the Company granted 345,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $6.66 per share for a term of ten years with 20,000 options vesting on March 14, 2020, 175,000 options vesting quarterly beginning April 1, 2019 for three years and 150,000 options vesting one third on anniversary for three years.


On July 2, 2019, the Company granted 158,333 options to purchase the Company stock in connection with the services rendered at the exercise price of $9.056 per share for a term of ten years with 133,333 options vesting quarterly beginning September 30, 2019 for three years, and 25,000 vesting as follows: 1/6th on vesting date, then remaining options quarterly vesting beginning September 30, 2019 for three years.


On October 8, 2019, the Company granted 45,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $8.00 per share for a term of ten years with quarterly vesting beginning December 31, 2019 for three years.


On October 30, 2019, the Company granted 195,720 options to purchase the Company stock in connection with the services rendered at the exercise price of $7.15 per share for a term of ten years vesting immediately.


On December 27, 2019, the Company granted 395,000 options to purchase the Company stock in connection with the services rendered at the exercise price of $6.16 per share for a term of ten years with 15,000 vesting immediately and 380,000 vesting quarterly beginning March 31, 2020 for three years.


The following assumptions were used in determining the fair value of employee options for the year ended December 31, 2019:


 

 

 

 

 

Risk-free interest rate

 

 

1.45% to 2.74

%

Dividend yield

 

 

0

%

Stock price volatility

 

 

86.74% to 91.55

%

Expected life

 

 

5 to 10 years

 

Weighted average grant date fair value

 

$

5.75

 


On May 17, 2019, in connection with the retirement of two members of the Company’s board of directors, the Company extended the life of 628,905 previously issued director options from the contractual 90 days from termination of service to the earlier of the initial life up or May 17, 2021. The change in estimated fair value of the modified options of $666,062 was charged to current period operations.


The following assumptions were used in determining the change in fair value of the modified options at May 17, 2019:


Risk-free interest rate

 

 

2.33% - 2.40

%

Dividend yield

 

 

0

%

Stock price volatility

 

 

89.97

%

Expected life

 

0.12– 2 years

 


The fair value of all options vesting during the year ended December 31, 2019 and 2018 of $2,165,810 and $2,357,242, respectively, was charged to current period operations.  Unrecognized compensation expense of $4,513,290 and $173,446 at December 31, 2019 and 2018, respectively, will be expensed in future periods.


Restricted Stock


The following table summarizes the restricted stock activity for the two years ended December 31, 2019:


Restricted shares issued as of January 1, 2018

    -  

Granted

    -  

Vested

    -  

Total restricted shares issued as of December 31, 2018

    -  

Granted

    376,000  

Vested

    (113,332

)

Vested restricted shares as of December 31, 2019

    25,000  

Unvested restricted shares as of December 31, 2019

    262,668  

On February 28, 2019, the Company granted an aggregate of 70,000 restricted stock grants for services with 23,332 vested immediately; 23,334 vesting at one-year anniversary and 23,334 vesting at two-year anniversary.


On March 20, 2019, the Company granted an aggregate of 120,000 restricted stock grants for services vesting quarterly beginning on April 1, 2019 over one year.


On June 21, 2019, the Company granted 50,000 restricted stock units for services with 25,000 vesting at one-year anniversary and 25,000 at two-year anniversary.


On August 7, 2019, the Company granted 40,000 restricted stock grants for services vesting at one-year anniversary.


On September 24, 2019, the Company granted 40,000 restricted stock grants for services with 20,000 vesting at one-year anniversary and 20,000 at two-year anniversary.


On December 12, 2019, the Company granted 6,000 restricted stock grants for services with 3,000 vesting on February 2, 2020 and 3,000 on May 2, 2020.


On December 26, 2019, the Company granted 50,000 restricted stock grants for services with 25,000 vesting immediately and 25,000 on June 30, 2020.


Stock based compensation expense related to restricted stock grants was $1,586,736 and $0 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, the stock-based compensation relating to restricted stock of $1,017,983 remains unamortized. 


NeuroClear Technologies, Inc.


2019 Long-Term Incentive Plan


On September 24, 2019, NeuroClear Technologies, Inc.’s Board of Directors approved the 2019 Long-Term Incentive Plan (the “NeuroClear Plan”), subject to NeuroClear’s stockholders. The Plan provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to 1,750,000 shares of NeuroClear’s common stock to officers, directors, employees and consultants of the NeuroClear. Under the terms of the Plan, NeuroClear may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of NeuroClear only and nonstatutory options. The Board of Directors of NeuroClear or a committee thereof administers the Plan and determines the exercise price, vesting and expiration period of the grants under the Plan.


However, the exercise price of an Incentive Stock Option should not be less than 110% of fair market value of the common stock at the date of the grant for a 10% or more stockholder and 100% of fair market value for a grantee who is not 10% stockholder. The fair market value of the common stock is determined based on the quoted market price or in absence of such quoted market price, by the administrator in good faith.


Additionally, the vesting period of the grants under the NeuroClear Plan will be determined by the administrator, in its sole discretion, with an expiration period of not more than ten years.


NeuroClear Options


On October 11, 2019, the Company granted 575,000 options to purchase NeuroClear common stock in connection with services rendered at an exercise price of $5.00 per share, for a term of 10 years, vesting immediately.


The fair value of the stock-based payment awards was estimated using the Black-Scholes option model with a volatility figure derived from an index of historical stock prices of comparable entities with the market value of stock price based on recent sales. The Company accounts for the expected life of options in accordance with the “simplified” method, which is used for “plain-vanilla” options, as defined in the accounting standards codification. The risk-free interest rate was determined from the implied yields of U.S. Treasury zero-coupon bonds with a remaining life consistent with the expected term of the options. 


The following assumptions were used in determining the change in fair value of the NeuroClear options at October 11, 2019:


Risk-free interest rate

 

 

1.56

%

Dividend yield

 

 

0

%

Stock price volatility

 

 

71.0

%

Expected life

 

5 years

 


The fair value of the granted NeuroClear options of $1,696,250 was charged to current period operations.


Restricted stock units (NeuroClear)


On September 24, 2019, the Company granted 40,000 restricted stock units for services vesting monthly over one year.


Stock based compensation expense related to restricted stock unit grants of NeuroClear was $53,552 and $0 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, the stock-based compensation relating to restricted stock of $146,448 remains unamortized. 


Warrants


The following table summarizes information with respect to outstanding warrants to purchase common stock of the Company at December 31, 2019: 


Exercise

 

 

Number

 

Expiration

Price

 

 

Outstanding

 

Date

$

0.0025

 

 

 

153,328

 

January 2020

$

3.75

 

 

 

715,844

 

February 2020 to January 2021

$

4.375

 

 

 

602,272

 

April 2021 to May 2021

$

4.60

 

 

 

9,167

 

January 2020

$

5.05

 

 

 

8,566

 

January 2020

$

6.16

     

568,910

 

November 2027

$

6.85

 

 

 

205,523

 

July 2021 to August 2021

$

9.375

 

 

 

481,108

 

March 2020

 

 

 

 

 

2,744,718

 

 


On January 5, 2018, the Company issued 40,000 warrants to purchase the Company’s common stock at $3.75 per share, expiring on January 5, 2021, in connection with the sale of the Company’s common stock.


On February 14, 2018, the Company entered into a consent agreement with the holders of the Company’s Series D Convertible Preferred Stock.  Pursuant to the consent, the Series D Holders consented to the Series E Preferred Stock transaction and are entitled at any time on or before April 17, 2018, to elect to receive the more favorable terms of the transaction.  In consideration for their entry into the consent, the Company issued to the Series D Holders warrants to purchase up to an aggregate of 40,000 shares of common stock.  The consent warrants are exercisable immediately and expire on February 14, 2021 and have an exercise price of $3.75 per share. The warrants contain certain anti-dilutive provisions (see Note 8).


On February 16, 2018, the Company issued an aggregate of 200,000 warrants to purchase the Company’s common stock at $4.375 per share, expiring on August 16, 2021, in connection with the sale of the Company’s Series E preferred stock.  The warrants contain certain anti-dilutive provisions. On April 30, 2018, the exercise prices of the previously issued 200,000 warrants were reset to $3.75 and an additional 33,334 warrants were issued at $3.75 per share due to reset provisions (see Note 8).


On April 30, 2018, the Company issued 638,606 warrants to purchase the Company’s common stock at $4.375 per share, expiring on April 30, 2021, in connection with the sale of the Company’s common stock.


On May 11, 2018, the Company issued 28,000 warrants to purchase the Company’s common stock at $4.375 per share, expiring on May 11, 2021, in connection with the sale of the Company’s common stock.


On July 31, 2018, the Company issued 41,174 and 41,174 warrants to purchase the Company’s common stock at $3.75 and $6.85 per share, expiring on April 30, 2019 and July 30, 2021, respectively, in connection with the sale of the Company’s common stock.


On August 7, 2018, the Company issued 40,482 warrants to purchase the Company’s common stock at $6.85 per share, expiring on August 7, 2021 in connection with placement services provided for the sale of our common stock.


On August 16, 2018, the Company issued 82,266 and 82,266 warrants to purchase the Company’s common stock at $3.75 and $6.85 per share, expiring on May 16, 2019 and August 16, 2021, respectively, in connection with the sale of the Company’s common stock.


On August 17, 2018, the Company issued 54,036 and 54,036 warrants to purchase the Company’s common stock at $3.75 and $6.85 per share, expiring on May 17, 2019 and August 17, 2021, respectively, in connection with the sale of the Company’s common stock. In addition, in connection with the sale, the Company issued on August 7, 2018, 40,482 warrants to purchase the Company’s common stock at $6.85 per share, expiring on August 7, 2021 for placement agent services.


On November 20, 2019, the Company issued an aggregate of 568,910 warrants to purchase the Company’s common stock at $6.16 per share, expiring on November 20, 2027, to Mayo Foundation in connection with two know-how licensing agreements (See Note 13). The fair value of the of the issued warrants of $1,886,894, determined using the Black-Scholes option model with an estimated volatility of 71%, risk free rate of 1.69%, dividend yield of -0- and fair value of the Company’s common stock of $6.16, was charged to current period operations as acquired research and development.


A summary of the warrant activity for the years ended December 31, 2019 and 2018 is as follows:


                   

Weighted-Average

         
           

Weighted-Average

   

Remaining

   

Aggregate

 
   

Shares

   

Exercise Price

   

Contractual Term

   

Intrinsic Value

 

Outstanding at January 1, 2018

    5,115,805     $ 4.55       1.7     $ 551,636  

Grants

    1,375,374     $ 4.54       3.0       -  

Exercised

    (770,717

)

  $ 3.99       -       -  

Canceled/Expired

    (1,140,951

)

  $ 4.23       -       -  

Outstanding at December 31, 2018

    4,579,511     $ 4.73       1.5     $ 1,924,388  

Grants

    568,910       6.16       7.0       -  

Exercised

    (2,170,406

)

  $ 3.99                  

Canceled/Expired

    (233,297

)

  $ 7.24                  

Outstanding at December 31, 2019

    2,744,718     $ 5.40       2.2     $ 3,410,763  
                                 

Vested and expected to vest at December 31, 2019

    2,744,718     $ 5.40       2.2     $ 3,410,763  

Exercisable at December 31, 2019

    2,744,718     $ 5.40       2.2     $ 3,410,763  

The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on warrants with an exercise price less than the Company’s stock price of $5.92 as of December 31, 2019, which would have been received by the warrant holders had those warrant holders exercised their warrants as of that date.


Warrants (NeuroClear)


On November 20, 2019, NeuroClear issued 473,772 warrants to purchase the Company’s common stock at $5.00 per share, expiring on November 20, 2027, to Mayo Foundation in connection with a know-how licensing agreement (See Note 13). The fair value of the of the issued warrants of $1,275,448, determined using the Black-Scholes option model with an estimated volatility of 71%, risk free rate of 1.69%, dividend yield of -0- and the estimate fair value of NeuroClear’ s common stock of $5.00, based on recent sales activity, was charged to current period operations as acquired research and development.