Stockholders' Equity |
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| Stockholders' Equity Note Disclosure [Text Block] |
Note 8. Stockholders’ Equity
Preferred Stock The Company’s certificate of incorporation authorizes 5,000,000 shares of $0.001 par value preferred stock. The Board of Directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series, to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further vote or action by the Company’s stockholders. The Board of Directors can also increase or decrease the number of shares of any series of preferred stock, but not below the number of shares then outstanding of that series, without any further vote or action by stockholders. The Board of Directors may authorize the issuance of preferred stock with voting or conversion rights. There were no shares of preferred stock issued or outstanding as of December 31, 2016 or December 31, 2015. Common Stock Authorized Shares The Company’s certificate of incorporation authorizes 45,000,000 shares of $0.001 par value common stock. Voting Rights Holders of common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders. The Company has not provided for cumulative voting for the election of directors in our certificate of incorporation. No Preemptive or Similar Rights Common stock is not entitled to preemptive rights, and is not subject to conversion, redemption or sinking fund provisions. Common Stock Issuances During the year ended December 31, 2016, the Company issued 2,222,308 common shares pursuant to the Company’s IPO and 1,377,531 shares in connection with the acquisition of the businesses of the Target Companies and the Target Assets and 133,333 shares in connection with the acquisition of the assets of Iron Tiger Fight Series. Stock Based Compensation Plan 2016 Equity Incentive Plan On July 30, 2016, the Board of Directors adopted the Alliance MMA 2016 Equity Incentive Plan (the “2016 Plan”). The Company may grant shares of the Company’s common stock to the Company’s directors, officers, employees or consultants. The 2016 Plan has been designed to provide the Board of Directors with an integral resource as it evaluates the Company’s compensation structure, performance incentive programs, and long-term equity targets for executives and key employees. The following is a summary of the 2016 Plan. Administration The Board intends to appoint and maintain as administrator of the 2016 Plan a Committee (the “Committee”) consisting of two or more directors who are (i) “Independent Directors” (as such term is defined under the rules of the Nasdaq Stock Market), (ii) “Non-Employee Directors” (as such term is defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended) and (iii) “Outside Directors” (as such term is defined in Section 162(m) of the United States Internal Revenue Code of 1986, as amended (the “Code”)). The Committee, subject to the terms of the 2016 Plan, will have full power and authority to designate recipients of options and restricted stock, to determine the terms and conditions of the respective option and restricted stock agreements (which need not be identical) and to interpret the provisions and supervise the administration of the 2016 Plan. The Committee will also have the authority, without limitation, to designate which options granted under the Plan will be Incentive Options and which will be Nonqualified Options. In the absence of a Committee, the Plan will be administered by the Board of Directors. Eligibility Generally, the persons who are eligible to receive grants are directors, officers and employees of, and consultants and advisors to, the Company or any subsidiary; provided that Incentive Options may be granted only to employees of the Company and any subsidiary. Stock Subject to the 2016 Plan Stock subject to grants may be authorized, but unissued or reacquired common stock. Subject to adjustment as provided in the 2016 Plan, (i) the maximum aggregate number of shares of common stock that may be issued under the 2016 Plan is 825,000. The shares of common stock subject to the 2016 Plan will consist of unissued shares, treasury shares or previously issued shares held by a subsidiary of the Company, and such number of shares of common stock will be reserved for such purpose. Any of such shares of common stock that may remain unissued and that are not subject to outstanding options at the termination of the 2016 Plan will cease to be reserved for the purposes of the 2016 Plan. Equity Awards Stock Option Grant In August 2016, the Company made its first equity grant under the 2016 Equity Incentive Plan, the Company’s Chief Financial Officer, to purchase 200,000 shares of common stock with an exercise price of $4.50. The stock options have a contractual term of 10 years, vest annually over three years in three equal annual tranches, and have a grant date fair value of $364,326 which is amortized on a straight-line basis over the vesting period of three years. The Company determined the fair value of the stock options using the Black-Scholes model. For the year ended December 31, 2016, the Company recorded stock compensation expense of $50,573, which is included in general and administrative expense in the Consolidated Statement of Operations.
A summary of the stock option activity is presented below:
Stock Grant
Effective as of June 8, 2016, an affiliate of the Company transferred 925,036 shares of Alliance MMA common stock to individuals and entities who served as employees, officers and/or directors of or service providers to Alliance. The shares were transferred at no cost. The Company determined the fair value of the common stock to be $2.80 per share and recorded stock based compensation expense of $2,595,000, which is included in general and administrative expense in the condensed consolidated statement of operations. As of December 31, 2016 and 2015, the total unrecognized expense for unvested stock options, net of expected forfeitures, was $313,753 and $0, respectively, which is expected to be amortized over a weighted-average period of 3 years.
Warrant Grant In December 2016, the Company issued Network One and employees of Network One warrants to purchase 222,230 shares of common stock with an exercise price of $7.43. The warrants are not exercisable prior to March 2, 2017 and expire on September 2, 2021. |
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