Mezzanine and Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Stock Option Transactions Under Stock Option Plans

Outstanding stock options granted to primary care physicians to purchase shares of APC’s common stock consisted of the following:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value

Options outstanding at January 1, 2017	1,910,400		$	0.167	2.75	$	1.1
Options granted	—		—		—	—
Options exercised	(1,056,600	)	0.167		—	(0.6		)
Options forfeited	—		—		—	—
Options outstanding at December 31, 2017	853,800		$	0.167	1.75	$	0.5
Options granted	—		—		—	—
Options exercised	—		—		—	—
Options forfeited	—		—		—	—
Options outstanding at December 31, 2018	853,800		$	0.167	0.75	$	0.5
Options granted	—		—		—	—
Options exercised	—		—		—	—
Options forfeited	(853,800	)	0.167		—	(0.5		)

Options outstanding and exercisable at December 31, 2019	—		$	—	—	$	—

The Company’s outstanding stock options consisted of the following:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)

Options outstanding at January 1, 2017	—		$	—	—	$	—
Options assumed in the Merger (see Note 3)	1,141,040		3.95		5.85	22.6
Options granted	—		—		—	—
Options exercised	—		—		—	—
Options forfeited	—		—		—	—
Options outstanding at December 31, 2017	1,141,040		$	3.95	5.79	$	22.6
Options granted	155,000		9.85		—	—
Options exercised	(639,800	)	4.11		—	9.8
Options forfeited	(9,000	)	3.41		—	—
Options outstanding at December 31, 2018	647,240		$	5.62	4.13	$	9.2
Options granted	279,698		17.24		—	—
Options exercised	(241,214	)	6.09		—	2.7
Options forfeited	(78,378	)	17.62		—	—

Options outstanding at December 31, 2019	607,346		$	9.22	3.42	$	5.6

Options exercisable at December 31, 2019	439,776		$	4.58	2.09	$	5.6

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

During the year ended December 31, 2019, the Company granted 145,228 and 56,092 five year stock options to certain ApolloMed board members and executives, respectively, with exercise price ranging from $15.35 - $18.11 and $18.91, respectively, which were recognized at fair value, as determining using the Black-Scholes option pricing model and following:



December 31, 2019	Board Members		Executives
Expected Term	3.0 years		3.0 years
Expected volatility	90.50% - 100.27%		84.42		%
Risk-free interest rate	1.60% - 2.51%		1.65		%
Market value of common stock	$15.35 - $18.11		$	18.91
Annual dividend yield	—	%	—		%
Forfeiture rate	0	%	0		%

The stock options under the Exclusivity Amendment Agreement were accounted for at fair value, as determined using the Black-Scholes option pricing model and the following assumptions:



	Years ended December 31,
	2018	2017

Expected term	0.75 years	0.93 - 1.75 years
Expected volatility	38.10% - 41.60%	38.10% - 41.60%
Risk-free interest rate	1.64% - 1.86%	1.64% - 1.86%
Market value of common stock	$0.52 - $0.76	$0.52 - $0.76
Annual dividend yield	2.23% - 3.53%	2.23% - 3.53%
Forfeiture rate	0% - 6.8%	0% - 6.8%

Summary of Share-Based Compensation Expense of Stock Option Awards Granted

Share-based compensation expense related to option awards granted to primary care physicians with Exclusivity Agreements to purchase shares of APC’s common stock, are recognized over their respective vesting periods, and consisted of the following:



	Years ended December 31,
	2019		2018		2017
Share-based compensation expense:
General and administrative	$	607,146	$	809,528	$	2,113,116
	$	607,146	$	809,528	$	2,113,116

Schedule of Warrants Outstanding

The Company’s outstanding warrants consisted of the following:



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In Millions)
Warrants outstanding at January 1, 2017	—		$	—	—	$	—
Warrants assumed in the Merger	1,898,541		9.06		2.69	1.8
Warrants granted (see Note 3)	1,750,000		10.49		5.00	—
Warrants outstanding at December 31, 2017	3,648,541		$	9.75	3.74	$	52.0
Warrants granted	—		—		—	—
Warrants exercised	(286,357	)	7.84		—	3.0
Warrants forfeited	(30,189	)	4.50		—	—
Warrants outstanding at December 31, 2018	3,331,995		$	9.93	2.97	$	33.1
Warrants granted	—		—		—	—
Warrants exercised	(177,405	)	9.32		—	1.60
Warrants forfeited	—		—		—	—

Warrants outstanding at December 31, 2019	3,154,590		$	9.96	2.01	$	26.7



Exercise Price Per Share		Warrants Outstanding	Weighted Average Remaining Contractual Life	Warrants Exercisable	Weighted Average Exercise Price Per Share

$	9.00	948,498	0.79	948,498	$	9.00
10.00		1,386,083	2.30	1,386,083	10.00
11.00		820,009	2.94	820,009	11.00

$ 9.00 –11.00		3,154,590	2.01	3,154,590	$	9.96

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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