Shareholders' Equity

12 Months Ended

Dec. 31, 2015

Shareholders' Equity [Abstract]

SHAREHOLDERS' EQUITY

NOTE 12 – SHAREHOLDERS’ EQUITY

Capital Stock

The Company has a total of 201,000,000 authorized shares of capital stock, consisting of 1,000,000 shares of preferred stock, $0.0001 par value and 200,000,000 shares of common stock, $0.0001 par value.

Contributions and Distributions

In connection with the common control merger of FPH, CFMF was deemed to have made a distribution to the Company of $24.0 million on November 30, 2012, representing the net assets of FPH. During December 31, 2012, DVB made a contribution to FPH of $2.1 million in cash. On April 11, 2013 the Company was deemed to have distributed to CFMF $12.3 million in connection with the Company’s purchase of FPH for cash and notes with the simultaneous removal of the FPH entity originally recorded with the common control merger.

Shares Subject to Redemption

The Company and certain of its stockholders who acquired shares through the exercise of stock options, entered into agreements providing for the redemption of outstanding shares at any time by the holder. Accordingly, these shares are subject to repurchase under the terms of these agreements. As a result of the merger, these stockholders agreed to relinquish their rights of any kind to cause the Company to repurchase the shares of the Company subject to redemption.

As of December 31, 2015, there were no shares and options outstanding subject to such redemption, with no aggregate redemption value. As of December 31, 2014, there were 1,912,833 shares and options outstanding subject to such redemption, with aggregate redemption values of $5.0 million. The Company had recorded this redemption obligation as a liability on the consolidated balance sheet.

Adoption of the 2015 Long-Term Incentive Plan

The Company’s Board of Directors adopted the 2015 Plan subject to shareholder approval, which was obtained on July 8, 2015. The 2015 Plan is administered by the Board, and allows the Company to issue up to 2,500,000 shares of common stock to employees, consultants and non-employee directors providing a valuable service to the Company. The 2015 Plan provides for the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or cash-based awards. The Board has the authority to determine the amount and type of each award. The 2015 Plan expires on July 8, 2025. All options granted under the 2015 Plan will be at exercise prices not less than 100% of the fair market value of the Company’s common stock on the date of grant.

Restricted Shares and Restricted Share Units

Restricted shares are shares of stock granted to an employee for which sale is prohibited for a specified period of time. Restricted share units (“RSUs”) represent a promise to deliver shares to the employee at a future date if certain vesting conditions are met. The difference between RSUs and restricted shares is primarily the timing of the delivery of the underlying shares. A company that grants RSUs does not deliver the shares to the employee until the vesting conditions are met.

Under the 2015 Plan, four members of the Board were granted restricted shares and one member of the Board was granted RSUs on January 4, 2016. There were 6,660 restricted shares or RSUs granted to each member and they vest in three installments on August 8, 2016, 2017 and 2018 and are not subject to any performance-based conditions.

Based on the terms above, each share had a value of $11.26 per share for a total of $0.4 million for all five board members. Stock compensation of $0.4 million for all five board members will be amortized over the service period between January 4, 2016 and August 8, 2018. The amortization of the stock compensation for all board members is expected to be approximately $0.1 million per year.

Stock Options

The fair value of stock options is amortized on a straight line basis over the requisite service periods of the respective awards. Stock-based compensation expense related to stock options was $4.9 million, $0.3 million and $0 for the years ended December 31, 2015, 2014 and 2013, respectively. Stock compensation expense is included within general and administrative expenses on the accompanying consolidated statements of income. As of December 31, 2015, the unamortized value of options was $11.0 million and is expected to be expensed over a period of 2.6 years.

On December 11, 2014, the Company granted stock options for the purchase of 13,480 shares of its Class A common stock at an exercise price of $498 per share under the 2012 Stock Incentive Plan (the “Lindblad Plan”) to two officers of the Company. At the merger date, the Company assumed the 13,480 outstanding Lindblad stock options granted under the Lindblad Plan and converted such options into options to purchase an aggregate of 3,821,696 shares of common stock of the Company with an exercise price of $1.76 per share. Under the assumption agreement, the exercise proceeds, service period and other terms remained the same, except for the vesting dates and option term. There were no incremental costs resulting from the modification of the equity awards and the requisite service is expected to be rendered with no change in the service period. Therefore, the total recognized compensation cost for the equity awards remains the fair value at the original grant date (ASC 718-20). The original grant date value per share for the equity awards was $1,423.62 per share and at the merger date, the original grant date value was converted to $3.81 per share.

During September 2015, 1,272,625 option shares vested and were exercised. The option shares were issued using cashless transactions, approved by management, and were used in exchange for the required exercise proceeds and payment of any related payroll withholding taxes. Using a fair value of $9.30 per share and an exercise price of $1.76 per share, 240,841 shares were transferred to provide the $2.2 million in exercise proceeds required for the transactions. Using a fair value of $9.30 per share, 524,662 shares were transferred to provide the $4.9 million in proceeds required to pay the payroll withholding taxes for the transactions. The balance of the option shares of 507,122 shares were issued as a result of the transactions.

The Company estimated the fair value of employee stock options using the Black-Scholes option pricing model. The fair values of employee stock options granted under the Lindblad Plan and 2015 Plan were estimated using the following assumptions:

	December 11, 2014 Option Grants			November 10, 2015 Option Grants
Stock price	$	5.02		$	10.58
Exercise price	$	1.76		$	10.58
Dividend yield		0	%		0	%
Expected volatility		60.0	%		60.0	%
Risk-free interest rate		2.19	%		1.72	%
Expected term		5.11 years			5.11 years

The following table is a summary of activity under the Lindblad Plan and 2015 Plan:

				Weighted		Weighted		Weighted
				Average		Average		Average		Aggregate
				Exercise		Grant Date		Contractual		Intrinsic
	* Shares			* Price		* Fair Value		Life (Years)		* Value
Options outstanding as of December 31, 2012		1,992,782		$	0.11	$	3.27		10.0	$	6,622,583
Granted		-			-		-
Exercised		-			-		-
Forfeited		-			-		-
Options outstanding as of December 31, 2013		1,992,782			0.11	$	3.27		9.0		6,926,869
Granted		3,821,696			1.76		3.81
Exercised		(1,182,798	)		0.11		3.27
Forfeited		-			-		-
Options outstanding as of December 31, 2014		4,631,680			1.47	$	3.72		9.7		16,315,198
Granted		300,000			10.58		5.54
Exercised		(2,082,609	)		1.12		3.60
Forfeited		-			-		-
Options outstanding as of December 31, 2015		2,849,071		$	2.69	$	9.02		3.7	$	18,032,173
Vested and expected to vest after December 31, 2015		2,849,071		$	2.69	$	9.02		3.7	$	18,032,173
Exercisable as of December 31, 2012		1,992,782		$	0.11	$	3.27
Vested		-			-		-
Exercised		-			-		-
Forfeited		-			-		-
Exercisable as of December 31, 2013		1,992,782			0.11		3.27
Vested		-			-		-
Exercised		(1,182,798	)		1.12		3.60
Forfeited		-			-		-
Exercisable as of December 31, 2014		809,984			0.11		3.27
Vested		1,272,625			1.76		3.81
Exercised		(2,082,609	)		1.12		3.60
Forfeited		-			-		-
Exercisable as of December 31, 2015		-

*Option shares and values were adjusted for conversion at the merger date, July 8, 2015.