MGRM » Topics » Pro Forma Information under SFAS 123 for Periods Prior to fiscal 2006

This excerpt taken from the MGRM 10-K filed Mar 12, 2008.

Pro Forma Information under SFAS 123 for Periods Prior to fiscal 2006

Prior to the adoption of SFAS 123R, the Company accounted for stock-based awards under the intrinsic method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and made pro forma footnote disclosures as required by Statement of Financial Accounting Standards No. 148, “Accounting For Stock-Based Compensation—Transition and Disclosure,” which amended Statement of Financial Accounting Standards No. 123, “Accounting For Stock-Based Compensation.” Under the intrinsic method, no stock-based compensation expense had been recognized in the consolidated statements of operations because the exercise price of the stock options granted equaled the fair market value of the underlying stock on the date of grant. Pro forma net loss and pro forma net loss per share disclosed in the footnotes to the financial statements were estimated using the Black-Scholes option-pricing model.

The fair value of options granted prior to 2006 had been estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 3.7% to 4.4%; weighted-average expected term of stock options from grant date of 6.1 years; volatility factor of 88%; and a dividend yield of zero. The weighted-average grant date fair value of stock options granted to employees in 2005 was $1.73. The total fair value of stock options vested in 2005 was $5.6 million.

 

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MONOGRAM BIOSCIENCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

December 31, 2007

 

The fair value of employee stock purchases, in 2005, was based on an offering period starting December 1, 2004, which had been estimated using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 2.4% to 3.0%; expected term from 0.5 year to 2.0 years; volatility factor from 50% to 78%; and a dividend yield of zero.

The following table provides the Company’s pro forma information as if the fair value method had been applied to the stock-based compensation calculation:

 

     Year Ended December 31,  
     2005  
     (In thousands, except per share data)  

Net loss:

  

As reported

   $ (37,586 )

Adjustments:

  

Stock-based compensation expense (adjustment) included in reported net loss

     (2,914 )

Stock-based compensation expense for employee awards determined under SFAS 123

     (3,661 )
        

Pro forma net loss

     (44,161 )

Preferred stock dividend

     (162 )
        

Pro forma loss applicable to common stockholders

   $ (44,323 )
        

Loss per common share:

  

As reported

   $ (0.31 )
        

Pro forma

   $ (0.36 )
        
This excerpt taken from the MGRM 10-K filed Mar 9, 2007.

Pro Forma Information under SFAS 123 for Periods Prior to fiscal 2006

Prior to the adoption of SFAS 123R, the Company accounted for stock-based awards under the intrinsic method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and made pro forma footnote disclosures as required by Statement of Financial Accounting Standards No. 148, “Accounting For Stock-Based Compensation—Transition and Disclosure,” which amended Statement of Financial Accounting Standards No. 123, “Accounting For Stock-Based Compensation.” Under the intrinsic method, no stock-based compensation expense had been recognized in the statements of operations because the exercise price of the stock options granted equaled the fair market value of the underlying stock on the date of grant. Pro forma net loss and pro forma net loss per share disclosed in the footnotes to the financial statements were estimated using the Black-Scholes option-pricing model.

The fair value of options granted in 2005 had been estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 3.7% to 4.4%; weighted-average expected term of stock options from grant date of 6.1 years; volatility factor of 88%; and a dividend yield of zero. The weighted-average grant date fair value of stock options granted to employees in 2005 was $1.73. The total fair value of stock options vested in 2005 was $5.6 million.

The fair value of employee stock purchases in 2005 was based on an offering period starting December 1, 2004 which had been estimated using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 2.4% to 3.0%; expected term from 0.5 year to 2.0 years; volatility factor from 50% to 78%; and a dividend yield of zero.

 

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MONOGRAM BIOSCIENCES, INC.

NOTES TO FINANCIAL STATEMENTS—(Continued)

December 31, 2006

 

The following table provides the Company’s pro forma information as if the fair value method had been applied to the stock-based compensation calculation:

 

     Year Ended December 31,  
         2005             2004      
     (In thousands, except per share data)  

Net loss:

    

As reported

   $ (37,586 )   $ (81,430 )

Adjustments:

    

Stock-based compensation expense (adjustment) included in reported net loss

     (2,914 )     3,408  

Stock-based compensation expense for employee awards determined under SFAS 123

     (3,661 )     (3,645 )
                

Pro forma net loss

     (44,161 )     (81,667 )

Preferred stock dividend

     (162 )     (324 )
                

Pro forma loss applicable to common stockholders

   $ (44,323 )   $ (81,991 )
                

Loss per common share:

    

As reported

   $ (0.31 )   $ (1.43 )
                

Pro forma

   $ (0.36 )   $ (1.43 )
                

The Company accounts for stock option grants to non-employees in accordance with the Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” which requires the options subject to vesting to be periodically re-valued over their service periods, which approximates the vesting period. The impact of these options has not been material.

This excerpt taken from the MGRM 10-Q filed Nov 7, 2006.

Pro Forma Information under SFAS 123 for Periods Prior to fiscal 2006

Prior to the adoption of SFAS 123R, the Company accounted for stock-based awards under the intrinsic method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and made pro forma footnote disclosures as required by Statement of Financial Accounting Standards No. 148, “Accounting For Stock-Based Compensation—Transition and Disclosure,” which amended Statement of Financial Accounting Standards No. 123, “Accounting For Stock-Based Compensation.” Under the intrinsic method, no stock-based compensation expense had been recognized in the condensed statements of operations because the exercise price of the stock options granted equaled the fair market value of the underlying stock on the date of grant. Pro forma net loss and pro forma net loss per share disclosed in the footnotes to the condensed financial statements were estimated using the Black-Scholes option-pricing model.

The fair value of options granted during the three and nine months ended September 30, 2005 had been estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 3.7% to 4.2%; weighted-average expected term of stock options from grant date of 6.1 years; volatility factor of 88%; and a dividend yield of zero. The weighted-average grant date fair value of stock options granted to employees during the three and nine months ended September 30, 2005 was $1.87 and $1.74, respectively. The total fair value of stock options vested during the three and nine months ended September 30, 2005 was $1.0 million and $3.0 million, respectively.

 

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For the three and nine months ended September 30, 2005, the fair value of employee stock purchases was based on an offering period starting December 1, 2004 which had been estimated using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 2.4% to 3.0%; expected term from 0.5 year to 2.0 years; volatility factor from 50% to 78%; and a dividend yield of zero.

The following table provides the Company’s pro forma information as if the fair value method had been applied to the stock-based compensation calculation:

 

     Three Months Ended     Nine Months Ended  
     September 30, 2005     September 30, 2005  
     (In thousands, except per share data)  

Net loss:

    

As reported

   $ (9,611 )   $ (16,283 )

Adjustments:

    

Stock-based compensation adjustment included in reported net loss

     (596 )     (2,026 )

Stock-based compensation expense for employee awards determined under SFAS 123

     (858 )     (2,499 )
                

Pro forma net loss

     (11,065 )     (20,808 )

Preferred stock dividend

     —         (162 )
                

Pro forma loss applicable to common stockholders

   $ (11,065 )   $ (20,970 )
                

Loss per common share:

    

As reported

   $ (0.08 )   $ (0.13 )
                

Pro forma

   $ (0.09 )   $ (0.17 )
                

The Company accounts for stock option grants to non-employees in accordance with the Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” which requires the options subject to vesting to be periodically re-valued over their service periods, which approximates the vesting period. Stock-based compensation expenses for non-employees were $2,000 and $27,000 for the three and nine months ended September 30, 2006, respectively, and $10,000 and $49,000 for the corresponding periods in 2005.

This excerpt taken from the MGRM 10-Q filed Aug 9, 2006.

Pro Forma Information under SFAS 123 for Periods Prior to fiscal 2006

Prior to the adoption of SFAS 123R, the Company accounted for stock-based awards under the intrinsic method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and made pro forma footnote disclosures as required by Statement of Financial Accounting Standards No. 148, “Accounting For Stock-Based Compensation—Transition and Disclosure,” which amended Statement of Financial Accounting Standards No. 123, “Accounting For Stock-Based Compensation.” Under the intrinsic method, no stock-based compensation expense had been recognized in the condensed statements of operations because the exercise price of the stock options granted equaled the fair market value of the underlying stock on the date of grant. Pro forma net loss and pro forma net loss per share disclosed in the footnotes to the condensed financial statements were estimated using the Black-Scholes option-pricing model.

The fair value of options granted during the three and six months ended June 30, 2005 had been estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 3.7% to 4.2%; weighted-average expected term of stock options from grant date of 6.1 years; volatility factor of the expected market price of Monogram Biosciences’ common stock of 88%; and a dividend yield of zero. The weighted-average grant date fair value of stock options granted to employees during the three and six months ended June 30, 2005 was $1.96 and $1.73, respectively. The total fair value of stock options vested during the three and six months ended June 30, 2005 was $0.6 million and $2.0 million, respectively.

For the three and six months ended June 30, 2005, the fair value of employee stock purchases was based on an offering period starting December 1, 2004 which had been estimated using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 2.4% to 3.0%; expected term from 0.5 year to 2.0 years; volatility factor from 50% to 78%; and a dividend yield of zero.

 

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The following table provides the Company’s pro forma information as if the fair value method had been applied to the stock-based compensation calculation:

 

     Three Months Ended
June 30, 2005
    Six Months Ended
June 30, 2005
 
     (In thousands, except for per share data)  

Net income (loss):

    

As reported

   $ 688     $ (6,672 )

Adjustments:

    

Stock-based compensation adjustment included in reported net income (loss)

     666       (1,430 )

Stock-based compensation expense for employee awards determined under SFAS 123

     (2,333 )     (3,601 )
                

Pro forma net loss

     (979 )     (11,703 )

Preferred stock dividend

     (76 )     (162 )
                

Pro forma loss applicable to common stockholders

   $ (1,055 )   $ (11,865 )
                

Net income (loss) per common share, basic:

    

As reported

   $ —       $ (0.06 )
                

Pro forma

   $ (0.01 )   $ (0.10 )
                

Net income (loss) per common share, diluted:

    

As reported

   $ —       $ (0.06 )
                

Pro forma

   $ (0.01 )   $ (0.10 )
                

The Company accounts for stock option grants to non-employees in accordance with the Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” which requires the options subject to vesting to be periodically re-valued over their service periods, which approximates the vesting period. Stock-based compensation expenses for non-employees were $15,000 and $25,000 for the three and six months ended June 30, 2006, respectively, and $19,000 and $38,000 for the corresponding periods in 2005.

This excerpt taken from the MGRM 10-Q filed May 10, 2006.

Pro Forma Information under SFAS 123 for Periods Prior to fiscal 2006

Prior to the adoption of SFAS 123R, the Company accounted for stock-based awards under the intrinsic method of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”) and made pro forma footnote disclosures as required by Statement of Financial Accounting Standards No. 148, “Accounting For Stock-Based Compensation—Transition and Disclosure,” which amended Statement of Financial Accounting Standards No. 123, “Accounting For Stock-Based Compensation.” Under the intrinsic method, no stock-based compensation expense had been recognized in the condensed statements of operations because the exercise price of the stock options granted equaled the fair market value of the underlying stock on the date of grant. Pro forma net loss and pro forma net loss per share disclosed in the footnotes to the condensed financial statements were estimated using the Black-Scholes option-pricing model.

The fair value of options granted during the three months ended March 31, 2005 had been estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of 4.2%; weighted-average expected term of stock options from grant date of 6.1 years; volatility factor of the expected market price of Monogram Biosciences’ common stock of 88%; and a dividend yield of zero. The weighted average grant date fair value of stock options granted to employees during the three months ended March 31, 2005 was $1.72. The total fair value of stock options vested during the three months ended March 31, 2005 was $4.8 million.

For the three months ended March 31, 2005, the fair value of employee stock purchases was based on an offering period starting December 1, 2004 which had been estimated using the Black-Scholes option-pricing model with the following assumptions: risk-free interest rate from 2.4% to 3.0%; expected term from 0.5 year to 2.0 years; volatility factor from 50% to 78%; and a dividend yield of zero.

 

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The following table provides the Company’s pro forma information for the three months ended March 31, 2005 as if the fair value method had been applied to the stock-based compensation calculation (in thousands, except for per share data):

 

    

Three Months Ended

March 31, 2005

 

Net loss:

  

As reported

   $ (7,360 )

Adjustments:

  

Stock-based compensation adjustment included in reported net loss

     (2,078 )

Stock-based compensation expense for employee awards determined under SFAS 123

     (1,268 )
        

Pro forma net loss

     (10,706 )

Preferred stock dividend

     (86 )
        

Pro forma loss applicable to common stockholders

   $ (10,792 )
        

Loss per common share:

  

As reported

   $ (0.06 )
        

Pro forma

   $ (0.09 )
        

The Company accounts for stock option grants to non-employees in accordance with the Emerging Issues Task Force Consensus No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” which requires the options subject to vesting to be periodically re-valued over their service periods, which approximates the vesting period. Stock-based compensation expenses for non-employees were $9,800 and $19,000 for the three months ended March 31, 2006 and 2005, respectively.

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