Annual report pursuant to Section 13 and 15(d)

Stock Options, Common Stock and Warrants (Tables)

v2.4.0.8
Stock Options, Common Stock and Warrants (Tables)
 12 Months Ended
Dec. 31, 2013
Equity [Abstract]  
Schedule of Convertible, Redeemable Preferred Stock

Common Stock

The following is a summary of activity of the Company's common stock for the twelve months ended December 31, 2013 (in thousands):
GEE Common Stock
Common Stock
 
Amount
 
Common Non-Voting Stock
 
Amount
Balance - January 1, 2013
23,405

 
$
2

 
—

 
$
—

Exchange of warrants for common stock
898

 
—

 
—

 
—

Recapitalized as a result of Row 44 Merger
15,373

 
2

 
4,750

 
1

Stock purchase of AIA
—

 
—

 
14,368

 
1

Repurchased and retired common stock held by certain executives
(103
)
 
—

 
—

 
—

Issuance of stock to former executive
104

 
—

 
—

 
—

Asset purchase of PMG
432

 
—

 
—

 
—

Issuance of common stock
15,793

 
1

 
—

 
—

Balance - December 31, 2013
55,902

 
$
5

 
19,118

 
$
2

Schedule of Stock Options, Valuation Assumptions
Fair values of the stock options at December 31, 2013 were determined using the Black-Scholes model and the following level 3 assumptions:

 
2013
Expected life (in years)
2.0 - 4.0

Risk-free interest rate
0.77% - 1.75%

Expected stock volatility
50% - 65%

Expected dividend yield
0.00
%
Row 44 warrants issued during the years ended December 31, 2012 and 2011 were valued under the Black-Scholes valuation model using the following Level 3 assumptions:

 
2012
 
2011
Common Stock Value (per share)
$2.91 - $9.34

 
$
2.91

Expected Term
5-7 years

 
7

Risk-free Interest Rate
0.72% - 2.57%

 
2.57
%
Expected Stock Volatility
50
%
 
50
%
Dividend Yield
—
%
 
—
%
Fair values were determined on the grant date using the Black-Scholes model and the following level 3 assumptions for the years ended December 31, 2012 and 2011, respectively:

 
2012
 
2011
Stock Value (per share)
$
2.91

 
N/A

Weighted-average expected term
5.58 years

 
—

Risk-free rate
1.00
%
 
—

Expected stock volatility
48
%
 
—

Dividend yield
0
%
 
—

Schedule of Share-based Compensation, Stock Options, Activity
Of the 1,496,699 Row 44 stock options outstanding under the plan, 1,392,491 were exchanged for shares of Global Eagle stock, 103,000 options were forfeited and 7,708 options were exchanged for cash of $22,000 as follows:

  
Row 44 2011 Equity Incentive Plan
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (in years)
 
Aggregate Intrinsic Value
Outstanding at December 31, 2011
306,000

 
$
4.38

 
6.91
 
$
—

Granted
1,395,000

 
—

 
—

 
—

Exercised
(5,000
)
 
—

 
—

 
—

Expired or Canceled
(27,000
)
 
—

 
—

 
—

Forfeited
(172,000
)
 
—

 
—

 
—

Outstanding at December 31, 2012
1,496,699

 
$
3.21

 
7.95
 
$
9,187

Exercisable at December 31, 2012
1,496,699

 
$
3.21

 
7.95
 
$
9,187

Granted
—

 
—

 
—
 
—

Exercised-cashless (Global Eagle)
(1,392,491
)
 
3.21

 
—
 
—

Exercised-cash
(7,708
)
 
2.91

 
—
 
—

Forfeited
(96,500
)
 
2.91

 
—
 
—

Outstanding - January 31, 2013
—

 
$
—

 
—
 
$
—

Stock option activity for year ended December 31, 2013 is as follows:

Global Eagle Stock Option Plan
Shares
 
Weighted Average Exercise Price
 
Weighted Average Remaining Contractual Term (in years)
 
Aggregate Intrinsic Value
Outstanding at January 31, 2013
—

 
$
—

 
—
 
$
—

Granted
6,535,000

 
10.68

 
4.33
 
27,863,150

Exercised
—

 
—

 
—
 
—

Forfeited
(1,250,000
)
 
9.92

 
—
 
—

Outstanding at December 31, 2013
5,285,000

 
10.86

 
4.38
 
21,670,650

Exercisable at December 31, 2013
115,625

 
9.49

 
2.67
 
622,594

Expected to vest after December 31, 2013
5,169,375

 
$
10.89

 
4.42
 
$
21,048,056

Schedule of Share-based Compensation, Stock Options, by Exercise Price Range
The following is a summary of the Company's stock options outstanding at December 31, 2013:

Range of Exercise Price
 
Number Outstanding
 
Weighted Average Remaining Contractual Term (in years)
 
Weighted Average Exercise Price
 
Number Exercisable
 
Weighted Average Exercise Price
$14.55 - $16.06
 
1,075,000

 
4.98
 
15.10

 
—

 
$
—

$9.79 - $14.54
 
3,485,000

 
4.18
 
9.94

 
62,500

 
10.00

$8.88 - $9.78
 
725,000

 
4.44
 
8.97

 
53,125

 
8.88

 
 
5,285,000

 
4.38
 
10.86

 
115,625

 
$
9.49

Schedule of Share-based Compensation Expense Allocation
Stock-based compensation expense related to all employee and non-employee stock-based awards was as follows for the years ended December 31, 2013 and 2012, and 2011 (in thousands):

 
Year ended December 31,
Stock-based compensation expense:
2013
 
2012
 
2011
Cost of sales
$
—

 
$
2

 
$
7

Sales and marketing expenses
—

 
2

 
9

Product development
—

 
3

 
43

General and administrative
4,536

 
1,634

 
34

Total stock-based compensation expense
$
4,536

 
$
1,641


$
93


Schedule of Share-based Compensation, Warrants, Activity
The following is a summary of Global Eagle warrants for the year ended December 31, 2013:

Global Eagle Warrants
 
Number of Warrants
 
Weighted Average Exercise price
 
Weighted Average Remaining Contractual Term (in years)
Outstanding at January 31, 2013
 
25,992,500

 
$
11.50

 
5.00
Granted
 
666,667

 
11.50

 

Exercised
 
—

 
—

 

Purchased
 
(500,000
)
 
11.50

 
 
Exchanged for Global Eagle common stock
 
(2,921,450
)
 
11.50

 
 
Forfeited
 
—

 
—

 

Outstanding and exercisable at December 31, 2013
 
23,237,717

 
$
11.50

 
4.08
The following is a summary of activity for Row 44 warrants for common stock convertible into GEE common stock for the three years in the period ended December 31, 2013:

Row 44 Warrants for Common Stock - Upon Exercise Convertible to Global Eagle Common Stock
Number of Warrants
 
Weighted Average Exercise price
 
Weighted Average Remaining Contractual Term (in years)
Outstanding December 31, 2011
2,359,512

 
$
0.33

 
6.29
Granted
2,766,495

 
2.17

 
 
Exercised
(2,226,900)

 
0.00

 
 
Forfeited
—

 
—

 
 
Outstanding - December 31, 2012
$
2,899,107

 
$
2.34

 
4.92
Granted
82,721

 
—

 

Exercised
(2,259,931)

(1)
0.00

 

Forfeited
—

 
—

 

Outstanding - January 31, 2013
721,897

 
$
9.38

 
4.03
Granted
—

 
—

 

Exercised
—

 
—

 

Forfeited
—

 
—

 

Outstanding - December 31, 2013
721,897

 
$
9.38

 
3.37
Exercisable at December 31, 2013
721,897

 
$
9.38

 
3.37
Schedule of Share-based Compensation, Warrants, by Exercise Price Range
The following is a summary of all Global Eagle warrants outstanding at December 31, 2013:

 
Exercise Price per Warrant
 
Number of Warrants
 
Class of Shares
 
Weighted Average Remaining Life (in years)
 
$
11.50

 
15,571,050

 
Public Warrants
 
4.08
Total outstanding
 
 
15,571,050

 
 
 
 
 
11.50

 
666,667

 
Sponsor Warrants
 
4.07
 
$
11.50

 
7,000,000

 
Sponsor Warrants
 
4.08
 Total outstanding
 
 
23,237,717

 
 
 
4.08
The following is a summary of all Row 44 warrants converted to warrants to purchase GEE common stock (exercise price per warrant and number of warrants presented using the conversion ratio to Global Eagle common stock used in the Row 44 Merger) outstanding at December 31, 2013:

 
Weighted Average Exercise Price per Warrant (as converted)
 
Number of Warrants (as converted)
 
Weighted Average Remaining Life (in years)
Common stock warrants
$
9.38

 
721,897

 
3.12
Series C Preferred stock warrants
$
8.74

 
734,451

 
3.44