Quarterly report pursuant to Section 13 or 15(d)

OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS

v3.20.2
OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS
9 Months Ended
Sep. 30, 2020
Disclosure Text Block Supplement [Abstract]  
Shareholders' Equity and Share-based Payments [Text Block]

NOTE 9 – OPTIONS, RESTRICTED STOCK UNITS AND WARRANTS

 

BioSig Technologies, Inc.

 

2012 Equity Incentive Plan

 

On October 19, 2012, the Board of Directors of BioSig Technologies, Inc. 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 11,974,450 (as amended) shares of the Company’s common stock to officers, directors, employees and consultants of the Company. 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. There are 2,924,230 shares remaining available for future issuance of awards under the terms of the Plan.

 

Options

 

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 from an index of historical stock prices of comparable entities until sufficient data exists to estimate the volatility using the Company’s own historical stock prices. Management determined this assumption to be a more accurate indicator of value. 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 nine months ended September 30, 2020 was estimated using the Black-Scholes pricing model.

 

During the nine months ended September 30, 2020, the Company granted an aggregate of 1,015,000 options to officers, directors and key consultants.

 

The following table presents information related to stock options at September 30, 2020:

 

 

Options Outstanding

 

 

Options Exercisable

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Exercisable

 

 

Exercise

 

 

Number of

 

 

Remaining Life

 

 

Number of

 

 

Price

 

 

Options

 

 

In Years

 

 

Options

 

 

$

2.51-5.00

 

 

 

1,799,216

 

 

 

8.1

 

 

 

1,468,384

 

 

 

5.01-7.50

 

 

 

1,322,407

 

 

 

6.7

 

 

 

926,611

 

 

 

7.51-10.00

 

 

 

323,333

 

 

 

7.3

 

 

 

190,533

 

 

 

10.01-12.50

 

 

 

65,000

 

 

 

9.6

 

 

 

42,083

 

 

 

 

 

 

 

3,509,956

 

 

 

7.5

 

 

 

2,627,631

 

 

A summary of the stock option activity and related information for the Plan for the nine months ended September 30, 2020 is as follows:

 

                   

Weighted-Average

         
           

Weighted-Average

   

Remaining

   

Aggregate

 
   

Shares

   

Exercise Price

   

Contractual Term

   

Intrinsic Value

 

Outstanding at December 31, 2019

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

Grants

    1,015,000       5.59       10.0     $ -  

Exercised

    (1,203,223

)

  $ 5.08                  

Forfeited/expired

    (282,625

)

  $ 5.23                  

Outstanding at September 30, 2020

    3,509,956     $ 5.60       7.53     $ 1,113,941  

Exercisable at September 30, 2020

    2,627,631     $ 5.54       7.07     $ 849,529  

 

The aggregate intrinsic value in the preceding tables represents the total pretax intrinsic value, based on options with an exercise price less than the stock price of BioSig Technologies, Inc. of $4.93 as of September 30, 2020, which would have been received by the option holders had those option holders exercised their options as of that date.

 

On January 10, 2020, BioSig Technologies, Inc. granted 60,000 options to purchase the company stock in connection with the services rendered at the exercise price of $6.00 per share for a term of ten years with quarterly vesting beginning March 31, 2020 for three years.

 

On March 24, 2020, BioSig Technologies, Inc. granted 100,000 options to purchase the company stock in connection with the services rendered at the exercise price of $2.96 per share for a term of ten years with 25,000 vesting immediately and 75,000 quarterly vesting beginning June 30, 2020 for two years.

 

On March 31, 2020, BioSig Technologies, Inc. granted 50,000 options to purchase the company stock in connection with the services rendered at the exercise price of $3.73 per share for a term of ten years with vesting quarterly vesting beginning June 30, 2020 for three years.

 

On April 14, 2020, BioSig Technologies, Inc. granted an aggregate of 625,000 options to purchase the company stock to directors and an employee. The options are exercisable at $4.66 per share for ten years and fully vested and exercisable at the date of grant. On April 14, 2020, BioSig Technologies, Inc. granted an aggregate of 90,000 options to purchase shares of its common stock to employees. The options are exercisable at $4.66 per share for ten years and vest quarterly over three years.

 

On May 20, 2020, BioSig Technologies, Inc. granted an aggregate of 65,000 options to purchase the company stock to consultants and an employee. The options are exercisable at $10.49 per share for ten years with 40,000 fully vested and exercisable at the date of grant and 25,000 options vesting quarterly over three years.

 

On August 26, 2020, BioSig Technologies, Inc. granted an aggregate of 25,000 options to purchase the company stock to three employees at the exercise price of $7.57 per share for a term of ten years with one-third vesting on the one year anniversary and two-thirds vesting quarterly thereafter beginning November 26, 2021 for two years.

 

The following assumptions were used in determining the fair value of options during the nine months ended September 30, 2020:

 

Risk-free interest rate

    0.42% - 1.83

%

Dividend yield

    0

%

Stock price volatility

    86.51% to 92.31

%

Expected life

 

5 – 10 years

 

Weighted average grant date fair value

  $ 4.02  

 

The fair value of all options vesting during the three and nine months ended September 30, 2020 of $483,110 and $4,734,983, and $354,976 and $854,420 for the three and nine months ended September 30, 2019, respectively was charged to current period operations.  Unrecognized compensation expense of $3,262,773 at September 30, 2020 will be expensed in future periods.

 

Warrants

 

The following table summarizes information with respect to outstanding warrants to purchase common stock of BioSig Technologies, Inc. at September 30, 2020: 

 

 

Exercise

 

 

Number

 

Expiration

 

Price

 

 

Outstanding

 

Date

 

$

3.75

 

 

 

168,468

 

October 2020 to January 2021

 

$

4.38

 

 

 

548,938

 

April 2021

 

$

4.80

 

 

 

125,000

 

February 2025

 

$

6.16

 

 

 

568,910

 

November 2027

 

$

6.85

 

 

 

193,352

 

July 2021 to August 2021

 

 

 

 

 

 

1,604,668

 

 

 

On February 25, 2020, BioSig Technologies, Inc. issued warrants to purchase 125,000 shares of its common stock at $4.80 per share, expiring on February 21, 2025, for placement agent services in connection with the sale of the company’s common stock.

 

A summary of the warrant activity for the nine months ended September 30, 2020 is as follows:

 

                   

Weighted-Average

         
           

Weighted-Average

   

Remaining

   

Aggregate

 
   

Shares

   

Exercise Price

   

Contractual Term

   

Intrinsic Value

 

Outstanding at December 31, 2019

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

Grants

    125,000       4.80       4.4          

Exercised

    (467,820

)

  $ 3.92                  

Expired

    (797,230

)

  $ 6.44       -       -  

Outstanding at September 30, 2020

    1,604,668     $ 5.27       3.2     $ 519,703  
                                 

Vested and expected to vest at September 30, 2020

    1,604,668     $ 5.27       3.2     $ 519,703  

Exercisable at September 30, 2020

    1,604,668     $ 5.27       3.2     $ 519,703  

 

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 $4.93 of September 30, 2020, which would have been received by the option holders had those option holders exercised their options as of that date.

 

Restricted Stock Units

 

The following table summarizes the restricted stock activity for the nine months ended September 30, 2020:

 

Restricted shares issued as of December 31, 2019

    262,668  

Granted

    125,000  

Vested and issued

    (219,334

)

Vested restricted shares as of September 30, 2020

    -  

Unvested restricted shares as of September 30, 2020

    168,334  

 

On March 30, 2020, the Company granted 25,000 restricted stock units for services vesting at June 30, 2020.

 

On July 14, 2020, the Company granted an aggregate of 50,000 restricted stock units for services with one-third vesting at the one-year anniversary of the date of grant and two-thirds vesting quarterly thereafter beginning September 30, 2021 for two years with final vesting on July 14, 2023.

 

On August 11, 2020, the Company granted an aggregate of 50,000 restricted stock units for services with one-third vesting at the one-year anniversary of the date of grant and two-thirds vesting quarterly thereafter beginning September 30, 2021 for two years with final vesting on August 11, 2023.

 

Stock based compensation expense related to restricted stock grants was $174,945 and $1,005,243 for the three and nine months ended September 30, 2020 and $417,618 and $1,038,438 for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, the stock-based compensation relating to restricted stock of $857,740 remains unamortized. 

 

ViralClear Pharmaceuticals, Inc.

 

2019 Long-Term Incentive Plan

 

On September 24, 2019, ViralClear’s Board of Directors approved the 2019 Long-Term Incentive Plan (as subsequently amended, the “ViralClear Plan”). The ViralClear Plan was approved by BioSig as ViralClear’s majority stockholder. The ViralClear Plan provides for the issuance of options, stock appreciation rights, restricted stock and restricted stock units to purchase up to 4,000,000 shares of ViralClear’s common stock to officers, directors, employees and consultants of the ViralClear. Under the terms of the ViralClear Plan, ViralClear may issue Incentive Stock Options as defined by the Internal Revenue Code to employees of ViralClear only and nonstatutory options. The Board of Directors of ViralClear or a committee thereof administers the ViralClear Plan and determines the exercise price, vesting and expiration period of the grants under the ViralClear 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 ViralClear Plan will be determined by the administrator, in its sole discretion, with an expiration period of not more than ten years. There are 578,576 shares remaining available for future issuance of awards under the terms of the ViralClear Plan.

 

ViralClear Options

 

A summary of the stock option activity and related information for the ViralClear Plan for the nine months ended September 30, 2020 is as follows:

 

                   

Weighted-Average

 
           

Weighted-Average

   

Remaining

 
   

Shares

   

Exercise Price

   

Contractual Term

 

Outstanding at December 31, 2019

    575,000     $ 5.00       9.29  

Grants

    1,599,173     $ 5.31       9.84  

Exercised

    -                  

Forfeited/expired

    (173,465

)

  $ 7.40          

Outstanding at September 30, 2020

    2,000,708     $ 5.04       7.17  

Exercisable at September 30, 2020

    1,917,374     $ 5.04       7.07  

 

The following table presents information related to stock options at September 30, 2020:

 

 

Options Outstanding

 

 

Options Exercisable

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Exercisable

 

 

Exercise

 

 

Number of

 

 

Remaining Life

 

 

Number of

 

 

Price

 

 

Options

 

 

In Years

 

 

Options

 

 

$

5.00

 

 

 

1,984,042

 

 

 

7.2

 

 

 

1,900,708

 

 

 

10.00

 

 

 

16,666

 

 

 

0.1

 

 

 

16,666

 

 

 

 

 

 

 

2,000,708

 

 

 

7.2

 

 

 

1,917,374

 

 

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. 

 

On April 21, 2020, ViralClear granted 100,000 options to purchase shares of its common stock to a director. The options are exercisable at $5.00 per share for ten years vest quarterly over three years.

 

On April 29, 2020, ViralClear granted an aggregate of 1,278,999 options to purchase shares of its common stock to directors and officers of the company. The options are exercisable at $5.00 per share for ten years and fully vested and exercisable at the date of grant.

 

On May 5, 2020, ViralClear granted 120,174 options to purchase shares of its common stock to a director. The options are exercisable at $5.00 for ten years vesting in 4 substantially equal installments on each of the three, six, nine- and twelve-month anniversaries of the date of grant.

  

On June 2, 2020, ViralClear granted 100,000 options to purchase shares of its common stock to a director. The options are exercisable at $10.00 for ten years vesting quarterly over three years beginning June 30, 2020 with final vesting June 2, 2023.

 

The following assumptions were used in determining the change in fair value of the ViralClear options for the nine months ended September 30, 2020:

 

Risk-free interest rate

    0.36% to 0.52

%

Dividend yield

    0

%

Stock price volatility

    125.16% to 126.03

%

Expected life

 

5 – 6 years

 

Weighted average grant date fair value

  $ 4.29  

 

The fair value of all options vesting during the three and nine months ended September 30, 2020 of $242,703 and $5,836,855, and $0 for the three and nine months ended September 30, 2019, respectively, was charged to current period operations.  Unrecognized compensation expense of $369,279 at September 30, 2020 will be expensed in future periods.

 

Warrants (ViralClear)

 

The following table presents information related to warrants (ViralClear) at September 30, 2020:

 

 

Exercise

 

 

Number

 

Expiration

 

Price

 

 

Outstanding

 

Date

 

$

5.00

 

 

 

473,772

 

November 2027

 

 

10.00

 

 

 

6,575

 

May 2025

 

 

 

 

 

 

480,347

 

 

 

On May 20, 2020, ViralClear issued warrants to purchase 6,575 shares of its common stock at $10.00 per share, expiring on May 20, 2025, for placement agent services in connection with the sale of ViralClear’s common stock.

 

Restricted stock units (ViralClear)

 

On March 25, 2020, ViralClear granted an aggregate of 338,000 restricted stock units to two ViralClear board members for services vesting immediately.

 

On March 30, 2020, ViralClear granted an aggregate of 960,000 restricted stock units to ViralClear board members and employees for services with 320,000 vesting immediately, and 640,000 vesting upon ViralClear meeting certain milestones.

 

On July 13, 2020, ViralClear granted 82,716 restricted stock units to a consultant for services with vesting monthly over one year from date of grant.

 

The following table summarizes the restricted stock activity for the nine months ended September 30, 2020:

 

Restricted shares issued as of December 31, 2019

    40,000  

Granted

    1,380,716  

Vested

    -  

Vested restricted shares as of September 30, 2020

    711,786  

Unvested restricted shares as of September 30, 2020

    708,930  

 

Stock based compensation expense related to restricted stock unit grants of ViralClear was $485,352 and $5,445,346 for the three and nine months ended September 30, 2020 and $0 for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, the stock-based compensation relating to restricted stock of $2,018,262 remains unamortized.