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Mezzanine and Stockholders' Equity
 6 Months Ended
Jun. 30, 2020
Stockholders' Equity Note [Abstract]  
Mezzanine and Stockholders' Equity Mezzanine and Stockholders’ Equity
Mezzanine
As the redemption feature (see Note 2) of the shares is not solely within the control of APC, the equity of APC does not qualify as permanent equity and has been classified as noncontrolling interest in APC as mezzanine or temporary equity. APC’s shares are not redeemable and it is not probable that the shares will become redeemable as of June 30, 2020 and December 31, 2019.
Stockholders’ Equity

As of June 30, 2020, 302,732 holdback shares have not been issued to certain former NMM shareholders who were NMM shareholders at the time of closing of the merger between NMM and ApolloMed in December 2017 (the "Merger"), as they have yet to submit properly completed letters of transmittal to ApolloMed in order to receive their pro rata portion of ApolloMed common stock and warrants as contemplated under the merger agreement. Pending such receipt, such former NMM shareholders have the right to receive, without interest, their pro rata share of dividends or distributions with a record date after the effectiveness of the Merger. The consolidated financial statements have treated such shares of common stock as outstanding, given the receipt of the letter of transmittal is considered perfunctory and the Company is legally obligated to issue these shares in connection with the Merger.
See options and warrants section below for common stock issued upon exercise of stock options and stock purchase warrants.
Options
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 thousands)
Options outstanding at January 1, 2020
607,346  $9.22  3.42$5,600  
Options granted
11,742  18.41  —  —  
Options exercised
(120,000) 2.58  —  1,800  
Options forfeited
(12,228) 17.57  —  —  
Options outstanding at June 30, 2020486,860  $10.86  3.70$2,900  
Options exercisable at June 30, 2020380,894  $7.11  2.74$3,000  
During the six months ended June 30, 2020 and 2019, stock options were exercised for 120,000 and 111,000 shares, respectively, of the Company’s common stock, which resulted in proceeds of approximately $0.3 million and $0.5 million, respectively. The exercise price ranged from $2.10 to $5.00 per share for the exercises during the six months ended June 30, 2020, and ranged from $1.50 to $5.79 per share for the exercises during the six months ended June 30, 2019.
During the six months ended June 30, 2020 and 2019, no stock options were exercised pursuant to the cashless exercise provision.
During the six months ended June 30, 2020, the Company granted 11,742 stock options with a vesting period of five-years to certain ApolloMed board members with an exercise price of $18.41, which were recognized at fair value, as determined using the Black-Scholes option pricing model and the following assumptions:
June 30, 2020
Board Members
Expected term
3.0 years
Expected volatility
90.01 %
Risk-free interest rate
1.43 %
Market value of common stock
$10.56  
Annual dividend yield
— %
Forfeiture rate
— %
Restricted Stock Awards
The Company grants restricted stock awards to employees which are earned based on service conditions. The grant date fair value of the restricted stock awards is that day’s closing market price of the Company’s common stock. During the six months ended June 30, 2020, the Company granted restricted stock awards totaling 97,447 shares with a weighted average grant date fair value of $17.58. The grant date fair value of the restricted stock was $1.6 million to be recognized on a straight-line basis over the awards’ vesting period of three years.
During the three and six months ended June 30, 2020, the Company recorded approximately $0.9 million and $1.6 million of share-based compensation expense associated with the issuance of restricted shares of common stock and vesting of stock options which is included in general and administrative expenses in the accompanying consolidated statements of income, respectively. Unrecognized compensation expense related to total share-based payments outstanding as of June 30, 2020, was $3.8 million.
Warrants
The Company’s outstanding warrants consisted of the following:
Shares
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term
(Years)
Aggregate
Intrinsic
Value
(in thousands)
Warrants outstanding at January 1, 2020
3,154,590  $9.96  2.01$26,700  
Warrants granted
—  —  —  —  
Warrants exercised
(273,900) 9.32  —  2,000  
Warrants expired/forfeited
—  —  —  —  
Warrants outstanding at June 30, 20202,880,690  $10.02  1.61$18,700  
Exercise Price Per Share
Warrants
Outstanding
Weighted
Average
Remaining
Contractual Life
Warrants
Exercisable
Weighted
Average
Exercise Price
Per Share
$9.00  754,870  0.29754,870  $9.00  
10.00  1,313,345  1.851,313,345  10.00  
11.00  812,475  2.44812,475  11.00  
$ $ 9.00 –11.00
2,880,690  1.612,880,690  $10.02  
During the six months ended June 30, 2020 and 2019, common stock warrants were exercised for 273,900 and 41,624 shares, respectively, of the Company’s common stock, which resulted in proceeds of approximately $2.6 million and $0.4 million, respectively. The exercise price ranged from $9.00 to $11.00 per share for the exercises during the six months ended June 30, 2020 and 2019, respectively.
Treasury Stock
APC owned 17,307,214 and 17,290,317 shares of ApolloMed’s common stock as of June 30, 2020 and December 31, 2019, which are legally issued and outstanding but excluded from shares of common stock outstanding in the consolidated financial statements, as such shares are treated as treasury shares for accounting purposes (see Note 1).

During the year ended December 31, 2019, APC established a brokerage account to invest excess capital in the equity market. The brokerage account is managed directly by an independent investment committee of the APC board of directors, from which Dr. Kenneth Sim and Dr. Thomas Lam have been excluded. As of June 30, 2020, the brokerage account only held shares of ApolloMed totaling $7.6 million, and as such the ApolloMed shares in the brokerage account have been recorded as treasury shares.
Dividends
During the six months ended June 30, 2020 and 2019, APC paid dividends of $29.6 million and $10.0 million, respectively.

During the six months ended June 30, 2020 and 2019, CDSC paid dividends of $0.6 million and $1.2 million, respectively.