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Stock Based Compensation
 12 Months Ended
Dec. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock Based Compensation Stock-Based Compensation
Equity Incentive Plans
In connection with the 2017 Merger, the Company assumed ApolloMed’s 2013 Equity Incentive Plan (the “2013 Plan”), pursuant to which 500,000 shares of the Company’s common stock were reserved for issuance thereunder. The Company issues new shares to satisfy stock option and warrant exercises under the 2013 Plan. As of December 31, 2021, there were no shares available for future grants under the 2013 Plan.
In connection with the 2017 Merger, the Company assumed ApolloMed’s 2015 Equity Incentive Plan (the “2015 Plan”), pursuant to which 1,500,000 shares of the Company’s common stock were reserved for issuance thereunder. In addition, shares that are subject to outstanding grants under the Company’s 2013 Plan, but that ordinarily would have been restored to such plans reserve due to award forfeitures and terminations, were rolled into and become available for awards under the 2015 Plan. The 2015 Plan provides for awards, including incentive stock options, non-qualified options, restricted common stock, and stock appreciation rights. The 2015 Plan was approved by ApolloMed’s stockholders at ApolloMed’s 2016 annual meeting of stockholders that was held in September 2016. As of December 31, 2021, 2020, and 2019, there were approximately 1.7 million, 0.1 million and 0.5 million shares available for future grants under the 2015 Plan, respectively.
The following table summarizes the stock-based compensation expense recognized under all of the Company’s stock plans in 2021, 2020, and 2019 and associated with the issuance of restricted shares of common stock and vesting of stock options that are included in general and administrative expenses in the accompanying consolidated statements of income recognized (in thousands):
Years ended December 31,
20212020            2019
Stock options$2,480 $1,763 $688 
Restricted stock awards4,265 1,620 252 
APC stock options— — 607 
Total share-based compensation expense$6,745 $3,383 $1,547 
Unrecognized compensation expense related to total share-based payments outstanding as of December 31, 2021 was $21.3 million.
Options
The Company’s outstanding stock options consisted of the following:
SharesWeighted-Average
Exercise Price		Weighted-Average
Remaining
Contractual
Term
(Years)		Aggregate
Intrinsic
Value
(in millions)
Options outstanding at January 1, 2021725,864 $13.25 3.75$3.4 
Options granted137,927 66.29 — — 
Options exercised(40,000)5.20 — 2.8 
Options canceled, forfeited or expired(9,826)3.89 — — 
Options outstanding at December 31, 2021813,965 $22.74 3.20$41.6 
Options exercisable at December 31, 2021618,006 $10.22 2.14$37.1 
During the years ended December 31, 2021 and 2020, stock options were exercised for 40,000 and 0.1 million shares, respectively, of the Company’s common stock, which resulted in proceeds of approximately $0.2 million and $0.3 million, respectively. The exercise price was $5.20 per share for the exercises during the year ended December 31, 2021 and ranged from $2.10 to $5.00 per share for the exercises during the year ended December 31, 2020. During the year ended December 31, 2021, no stock options were exercised pursuant the cashless exercise provision. The total intrinsic value of stock options exercised was $2.8 million, $1.8 million, and $2.7 million during the years ended December 31, 2021, 2020, and 2019, respectively. The intrinsic value of stock options is defined as the difference between the Company’s stock price on the exercise date and the grant date exercise price.
During the year ended December 31, 2021, the Company granted 0.1 million five-year stock options to certain ApolloMed executives with exercise price ranging from $23.24-$80.00. The weighted-average grant-date fair value of options granted during the years ended December 31, 2021, 2020, and 2019 was $32.63, $9.89, and $11.33, respectively. The options granted during the year ended December 31, 2021 were recognized at fair value, as determined using the Black-Scholes option pricing model as follows:
December 31, 2021Executives
Expected term3.5 years
Expected volatility
75.45% - 81.10%
Risk-free interest rate
0.19% - 1.15%
Market value of common stock
12.86-37.82
Annual dividend yield0 %
Forfeiture rate0 %

Restricted Stock Awards

The Company’s unvested restricted stock award activity for the year ended December 31, 2021 consisted of the following:
Number of
Shares		Weighted Average
Grant-Date Fair Value
Unvested as of January 1, 2021262,419$17.96
Granted 332,20250.73
Vested(39,910)17.03
Forfeited(13,204)29.88
Unvested as of December 31, 2021541,507$37.84

The Company grants restricted stock awards to employees and executives, which are earned based on service conditions. The awards will vest over a period of six months to three years in accordance with the terms of those plans. The grant date fair value of the restricted stock awards is that day’s closing market price of the Company’s common stock. During the year ended December 31, 2021, the Company granted restricted stock awards for employees totaling 0.3 million shares with a weighted-average grant-date fair value of $50.73. The weighted-average grant-date fair value of restricted stock awards granted during the years ended December 31, 2020, and 2019 was $17.56 and $18.65, respectively. The total fair value of restricted stock awards, as of their respective vesting dates during the years ended December 31, 2021, 2020, and 2019 were $1.1 million, $1.4 million, and $0, respectively.

Warrants
Common stock warrants, to purchase 1,111,111 shares of ApolloMed common stock, issued to NMM in connection with the Series A Preferred Stock investment in ApolloMed were subject to exercise through March 30, 2021, for $9.00 per share, subject to adjustment in the event of stock dividends and stock splits. As part of the 2017 Merger between NMM and ApolloMed, such warrants were distributed to former NMM shareholders on a pro rata basis utilizing the percentage of shares of NMM held by each shareholder prior to the 2017 Merger date.
Common stock warrants, to purchase 555,555 shares of ApolloMed common stock, issued to NMM in connection with the Series B Preferred Stock investment in ApolloMed were subject to exercise through March 30, 2021, for $10.00 per share, subject to adjustment in the event of stock dividends and stock splits. As part of the 2017 Merger between NMM and ApolloMed, such warrants were distributed to former NMM shareholders on a pro-rata basis utilizing the percentage of shares of NMM held by each shareholder prior to the 2017 Merger date.

Common stock warrants, to purchase 850,000 shares, for $11.00 per share, and 900,000 shares, for $10.00 per share, of ApolloMed common stock, issued to former NMM shareholders on a pro-rata basis in connection with the Merger, may be exercised at any time after issuance and through December 8, 2022, subject to adjustment in the event of stock dividends and stock splits.
The Company’s outstanding warrants consisted of the following:
SharesWeighted-Average
Exercise
Price		Weighted-Average
Remaining
Contractual
Term
(Years)		Aggregate
Intrinsic
Value
(in millions)
Warrants outstanding at January 1, 20211,878,126 $10.39 1.6314.8 
Warrants granted— — — — 
Warrants exercised(858,583)10.30 — 41.1 
Warrants forfeited(17,803)9.72 — — 
Warrants outstanding at December 31, 20211,001,740 $10.49 0.94$63.1 
Exercise Price Per
Share		Warrants
Outstanding		Weighted-
Average
Remaining
Contractual Life		Warrants
Exercisable		Weighted-
Average
Exercise Price
Per
Share
10.00 515,176 0.94515,176 10.00 
11.00 486,564 0.94486,564 11.00 
$10.00 – $11.00
1,001,740 0.941,001,740 $10.49 
During the years ended December 31, 2021 and 2020, common stock warrants were exercised for 0.9 million and 1.2 million shares of the Company’s common stock, respectively, which resulted in proceeds of approximately $8.8 million and $10.5 million, respectively. The exercise price ranged from $9.00 to $10.00 per share during year ended December 31, 2021 and December 31, 2020.