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SEC Filings

10-Q
INCONTACT, INC. filed this Form 10-Q on 11/09/2016
Entire Document
 

 

 

We utilize the Black-Scholes model to determine the estimated fair value for grants of stock options. The Black-Scholes model requires the use of subjective and complex assumptions to determine the fair value of stock-based awards, including the option’s expected term, expected dividend yield, the risk-free interest rate and the price volatility of the underlying stock. The expected dividend yield is zero, based on our historical dividend rates and our intent to not declare dividends for the foreseeable future. Risk-free interest rates are based on U.S. Treasury rates. Volatility is based on historical stock prices over a period equal to the estimated life of the option. Stock options are issued with exercise prices representing the current market price of our common stock on the date of grant.  Stock options issued are generally subject to a four-year vesting period with a contractual term of ten years.

The grant date fair value of the restricted stock award is determined using the closing market price of the Company’s common stock on the grant date, with the associated compensation expense amortized over the vesting period of the restricted stock awards, net of estimated forfeitures.

We estimated the fair value of options granted under our employee stock-based compensation arrangements at the date of grant using the following weighted-average expected assumptions:  

 

 

Nine Months Ended September 30,

 

 

2016

 

 

2015

 

Dividend yield

None

 

 

None

 

Volatility

 

49%

 

 

 

49%

 

Risk-free interest rate

 

1.90%

 

 

 

1.70%

 

Expected life (years)

5.8

 

 

5.7

 

 

During the nine months ended September 30, 2016, we granted 536,000 stock options with exercise prices ranging from $8.36 to $8.43 and a weighted-average fair value of $3.95 and 1,065,000 restricted stock awards and units with a weighted-average fair value of $8.85.

As of September 30, 2016, there was $6.3 million of unrecognized compensation cost related to non-vested stock-based compensation awards granted under our stock-based compensation plans. The compensation cost is expected to be recognized over a weighted average period of 1.4 years.

 

 

NOTE 12. RELATED PARTY TRANSACTIONS

We paid our Chairman of the Board of Directors (the “Chairman”) $7,000 per month during the nine months ended September 30, 2016 and 2015 for consulting and other activities, and such amounts have been recognized in our financial statements as general and administrative expenses.  Amounts payable to the Chairman for such services were $7,000 and $7,000 at September 30, 2016 and December 31, 2015, respectively.  

As a result of the May 2014 acquisition of Uptivity, we are a party to an agreement to sell software and services with a company that is owned by two employees and other minority shareholders of inContact.  Revenue related to this agreement included in our Condensed Consolidated Statement of Operations and Comprehensive Loss was approximately $12,000  and $28,000 for the three and nine months ended September 30, 2016, respectively.  Related accounts receivable at September 30, 2016 and 2015 was $0 and $3,000, respectively.

The principal location of the employees from the May 2014 acquisition of Uptivity is in Columbus, Ohio.  Their facility is a 36,000 square foot office that is leased from Cabo Leasing LLC, which is owned by two employees and other minority shareholders of inContact.  The amount of rent for this facility included in our Condensed Consolidated Statement of Operations and Comprehensive Loss was approximately $200,000 and $600,000 for the three and nine months ended September 30, 2016, respectively.

In October 2015, inContact entered into a referral agreement with a sales lead generation company in which two employees and other minority shareholders hold individual minority ownership interests.  We pay commissions under this agreement based on sales generated.  The amount of commission expense included in our Consolidated Statement of Operations and Comprehensive Loss was approximately $34,000 and $101,000 for the three and nine months ended September 30, 2016.  There was a recorded payable of $11,000 on the balance sheet as of September 30, 2016, specific to this agreement.  

In connection with the proposed merger with NICE Ltd. we have entered into a referral and reseller agreement. No transactions have occurred under this agreement as of September 30, 2016.

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