REG - MyCelx Tech. Corp. MyCelx Tech. Corp.. - Final Results <Origin Href="QuoteRef">MYXR.L</Origin> - Part 3

Mycelx TechnologiesAnnouncement

17/05/2016 07:07

- Part 3: For the preceding part double click  ID:nRSQ4047Yb 

                                                   
 Outstanding at 31 December 2014  1,151,274  $3.79                      5.5                                                     $2,544,210              
                                                                                                                                                        
 Granted                          299,000    $2.15                      6.0                                                     $346,840                
 Exercised                        (170,007)  $0.86                                                                                                      
 Forfeited                        (454,711)  $4.03                                                                                                      
 Outstanding at 31 December 2015  825,556    $3.48                      5.8                                                     $1,476,970              
 Exercisable at 31 December 2015  550,556                                                                                                               
 
 
A summary of the status of unvested options as of 31 December 2015 and changes
during the years ended 31 December 2015 and 2014 is presented below: 
 
 Unvested Options              Shares     Weighted-Average Fair Value at Grant Date  
 Unvested at 31 December 2013  386,710    $2.11                                      
 Granted                       100,000    $3.78                                      
 Vested                        (361,707)  $1.98                                      
 Forfeited                     (20,001)                                              
 Unvested at 31 December 2014  105,002    $3.83                                      
                                                                                     
 Granted                       299,000    $1.16                                      
 Vested                        (38,334)   $3.92                                      
 Forfeited                     (116,668)                                             
 Unvested at 31 December 2015  249,000    $1.16                                      
 
 
As of 31 December 2015, total unrecognised compensation cost of $233,000 was
related to unvested share-based compensation arrangements awarded under the
Plan. 
 
Stock warrants 
 
On 29 July 2011, the Company and one of its consultants entered into a warrant
agreement for the consultant's assistance in connection with the Company's
initial public offering on 4 August 2011. Pursuant to this agreement, the
Company agreed to grant to the consultant warrants to subscribe for Common
Shares representing 1.5 percent of the total shares outstanding immediately
following the initial public offering, or 193,843 warrant shares. The warrant
vested upon the August 2011 issuance of the shares. The exercise price of the
warrants is 210 pence per share. The warrants are exercisable in whole or in
part at any time in the period between 5 August 2011 and 5 August 2016. In May
2013, the consultant exercised 113,843 warrants for consideration paid to the
Company and proceeds of approximately $371,000 were received. 
 
The warrants are exercisable, at the election of the consultant, without
payment of the exercise price, for such number of Common Shares as is
calculated in accordance with a formula set out in the warrant agreement. In
summary, that formula operates by calculating the notional net gain that the
shareholder would have made if it had exercised its warrants at the exercise
price and then sold its shares at the current market value. The formula then
uses the notional net gain to calculate such lesser number of Common Shares
that the shareholder would need to acquire (at nil acquisition cost) in order
to achieve the same notional net gain. In the event that the shareholder
exercises the warrants (or any part) in this manner, the warrants are deemed
to have been exercised in respect of such number of Common Shares as would
have been required in order to achieve the same notional net gain had the
warrants been exercised at the exercise price. 
 
In addition, either the consultant or the Company may elect, in certain
circumstances, including a merger or sale of substantially all of the assets
of the Company, to receive or provide (as the case may be) a cash payment, in
substitution for the warrants, calculated in accordance with a formula set out
in the warrant agreement. As a result, the fair value of the outstanding
warrants is classified as a liability in accordance with ASC 480 -
Distinguishing Liabilities from Equity. As discussed in Note 2, the fair value
of the warrants is measured utilising a Monte Carlo valuation model with the
following assumptions: 
 
                                                           31 December 2015  31 December 2014  
 Closing price per share of common  stock                  $0.37             $2.73             
 Exercise price per share                                  $2.15             $2.27             
 Expected volatility                                       49.0%             51.0%             
 Risk-free interest rate                                   0.74%             0.74%             
 Remaining expected term of underlying securities (years)  0.6               1.6               
 
 
In addition, as of the valuation dates, management assessed the probabilities
of future financing assumptions in the Monte Carlo valuation model. 
 
11. Employee benefit plan 
 
The Company maintains an active defined contribution retirement plan for its
employees (the "Benefit Plan"). All employees satisfying certain service
requirements are eligible to participate in the Benefit Plan. The Company
makes cash contributions each payroll period up to specified percentages of
employees' contributions as approved by the Board of Directors. In September
2015, the Company changed its policy of making contributions under which it
chose not to contribute to the plan. The Company may elect to change its
policy in the future. The Company's contributions to the Benefit Plan were
approximately $72,000 and $97,000 for the years ended 31 December 2015 and
2014, respectively. 
 
12. Commitments and contingencies 
 
Operating leases - The Company leases certain facilities and equipment under
non-cancelable operating leases which expire at varying times between January
2018 and May 2019. Certain of these leases have escalating rent payments which
result in the Company recording a deferred rent liability. 
 
Future minimum lease payments under the operating leases, together with the
present value of minimum lease payments as of 31 December 2015 are as
follows: 
 
 Year Ending 31 December           FutureLease Payments US$000  
 2016                         307  
 2017                         314  
 2018                         116  
 2019                         45   
 Total future lease payments  782  
 
 
Rent expense for the years ended 31 December 2015 and 2014 was approximately
$613,000 and $453,000, respectively. 
 
13. Related party transactions 
 
The Company has held a patent rights purchase agreement since 2009 with a
shareholder as described in Note 5. 
 
14. Segment and geographic information 
 
ASC 280-10, Disclosures About Segments of an Enterprise and Related
Information (ASC 280-10), establishes standards for reporting information
about operating segments. ASC 280-10 requires that the Company report
financial and descriptive information about its reportable operating segments.
Operating segments are components of an enterprise for which separate
financial information is available that is evaluated regularly by the chief
operating decision maker (CODM) in deciding how to allocate resources and in
assessing performance. The Company's CODM is the Chief Executive Officer
(CEO). While the CEO is apprised of a variety of financial metrics and
information, the business is principally managed on an aggregate basis as of
31 December 2015. For the year ended 31 December 2015, the Company's revenues
were generated primarily in the Middle East and the United States (U.S.).
Additionally, the majority of the Company's expenditures and personnel either
directly supported its efforts in the Middle East and the U.S., or cannot be
specifically attributed to a geography. Therefore, the Company has only one
reportable operating segment. 
 
Revenues from customers by geography are as follows: 
 
 Year ending 31 December  2015    2014    
 Middle East              10,604  10,322  
 United States            1,897   2,512   
 Other                    1,091   747     
 Total                    13,592  13,581  
 
 
Equipment leased to customers by geography is as follows: 
 
 Year ending 31 December  2015   2014   
 Middle East              6,301  5,180  
 United States            1,813  1,171  
 Other                    496    269    
 Total                    8,610  6,620  
 
 
15. Concentrations 
 
At 31 December 2015, two customers, one with three contracts with three
separate plants, represented 74 percent of accounts receivable. During the
year ended 31 December 2015, the Company received 78 percent of its gross
revenue from two customers, one with three separate plants. 
 
At 31 December 2014, two customers, one with four contracts with three
separate plants, represented 78 percent of accounts receivable. During the
year ended 31 December 2014, the Company received 65 percent of its gross
revenue from one customer with three separate plants. 
 
16. Subsequent Events 
 
The Company discloses material events that occur after the balance sheet date
but before the financials are issued. In general, these events are recognized
in the financial statements if the conditions existed at the date of the
balance sheet, but are not recognized if the conditions did not exist at the
balance sheet date. Management has evaluated subsequent events through 16 May
2016, the date the financial statements were available to be issued, and no
events have occurred which require further disclosure. 
 
Forward Looking Statements 
 
This Annual Report contains certain statements that are or may be
"forward-looking statements". These statements typically contain words such as
"intends", "expects", "anticipates", "estimates" and words of similar import.
All the statements other than statements of historical facts included in this
Annual Report, including, without limitation, those regarding the Company's
financial position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating to the
Company's products and services) are forward-looking statements. By their
nature, forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future and
therefore undue reliance should not be placed on such forward-looking
statements. There are a number of factors that could cause the actual results,
performance or achievements of the Company to be materially different from
future results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
numerous assumptions regarding the Company's present and future business
strategies and the environment in which the Company will operate in the future
and such assumptions may or may not prove to be correct. Forward-looking
statements speak only as at the date they are made. Neither the Company nor
any other person undertakes any obligation (other than, in the case of the
Company, pursuant to the AIM Rules for Companies) to update publicly any of
the information contained in this Annual Report, including any forward-looking
statements, in the light of new information, change in circumstances or future
events. 
 
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