Quarterly report pursuant to Section 13 or 15(d)

Equity

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Equity
3 Months Ended
Mar. 31, 2018
Equity [Abstract]  
Equity

Note 4 - Equity 

 

In March 2018, the Company sold an aggregate of 30,237,894 units consisting of an aggregate of 30,237,894 shares of common stock, 7,559,445 series A warrants and 22,678,393 series B warrants, with each series A warrant exercisable for one share of Common Stock at an exercise price of $0.60 per share and each series B warrant exercisable for one share of Common Stock at an exercise price of $0.70 per share, resulting in gross proceeds to Actinium of approximately $15.1 million (each unit was sold at $0.50 per unit), and net proceeds of approximately $13.9 million after deducting expenses relating to dealer-manager fees and other offering expenses. The Company received $56,284 of the subscription in April 2018. This amount was included in prepaid expense and other current assets on the balance sheet as of March 31, 2018.

 

Stock Options

 

During the three months ended March 31, 2018, the Company granted its employees 840,000 options to purchase the Company’s common stock with an exercise price ranging from $0.39 to $0.72 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of approximately $377,000 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate range from 2.35% to 2.72% (2) expected life of 6 years, (3) expected volatility range from 80.09% to 80.46%, and (4) zero expected dividends. The estimated option life was determined based on the “simplified method,” giving consideration to the overall vesting period and the contractual terms of the award.

 

The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at March 31, 2018 was approximately $3.1 million. During the three months ended March 31, 2018 and 2017, the Company recorded total option expense of approximately $0.6 million and $0.9 million, respectively.

 

Warrants

 

Following is a summary of warrant activities for the three months ended March 31, 2018:

 

    Number of Units     Weighted
Average
Exercise
Price
    Weighted
Average
Remaining
Contractual
Term
(in years)
    Aggregate
Intrinsic
Value
 
Outstanding, December 31, 2017     25,662,340       1.89       3.62       995,373  
Granted     30,241,538       1.23       2.13          
Exercised     -                          
Cancelled     -                          
Outstanding, March 31, 2018     55,903,878       1.23       2.66       546,959  
                                 
Exercisable, March 31, 2018     55,708,878       1.21       2.66       546,959  

 

As discussed above, in March 2018, the Company sold an aggregate of 30,237,894 units consisting of an aggregate of 30,237,894 shares of common stock, 7,559,445 series A warrants and 22,678,393 series B warrants. The series A warrants are exercisable for a period of 1 year at an exercise price of $0.60 per share. The transaction date relative fair value of the series A warrants of $0.5 million was determined utilizing the Black-Scholes option pricing model. Variables used in the Black-Scholes option-pricing model include (1) discount rate of 2.06%, (2) expected term of 1 years, (3) expected volatility of 71%, and (4) zero expected dividends. The series B warrants are exercisable for a period of 2.5 years at an exercise price of $0.70 per share. The transaction date relative fair value of the series B warrants of $2.5 million was determined utilizing the Black-Scholes option pricing model. Variables used in the Black-Scholes option-pricing model include (1) discount rate of 1.33%, (2) expected term of 2.5 years, (3) expected volatility of 71%, and (4) zero expected dividends.