Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v3.20.1
Stockholders' Equity
12 Months Ended
Dec. 31, 2019
Stockholders' equity:  
Stockholders' Equity

 8. Stockholders’ Equity

 

2019 Private Placement

 

On May 9, 2019, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (collectively, the “Investors”) for the private placement of 2,426,455 shares of the Company’s common stock at $3.10 per share (the “2019 PIPE”). The Company received aggregate gross proceeds of approximately $7.5 million, before deducting offering expenses aggregating approximately $94,000.

 

The Purchase Agreement also contains representations and warranties by the Company and the Investors and covenants of the Company and the Investors (including indemnification from the Company in the event of breaches of its representations and warranties), certain information rights and other rights, obligations and restrictions, which the Company believes are customary for transactions of this type.

 

Issuance of Common Stock in Lieu of Cash Payments

 

Under the terms of the Amended and Restated Non-Employee Director Compensation Plan, each non-employee member of the Company’s Board of Directors may elect to receive all or part of his or her director fees in shares of the Company’s common stock. Director fees, whether paid in cash or in shares of common stock, are payable quarterly on the last day of each fiscal quarter. The number of shares of common stock issued to directors is determined by dividing the product of: (i)(a) the fees otherwise payable to each director in cash, times (b) the percentage of fees the director elected to receive in shares of common stock, by (ii) the volume weighted average price per share of common stock over the last five trading days of the quarter. During the years ended December 31, 2019 and 2018, 29,861 shares and 57,386 shares, respectively, were issued to directors as payment for director fees, amounting to $117,163 and $113,665, in 2019 and 2018, respectively, in lieu of cash.

 

Stock Incentive Plans

 

The Company has various share-based compensation plans and share-based compensatory contracts (collectively, the “Plans”) under which it has granted share-based awards, such as stock grants, and incentive and non-qualified stock options, to employees, directors, consultants and advisors. Awards may be subject to a vesting schedule as set forth in individual award agreements. Certain of the Plans also have provided for cash-based performance bonus awards.

 

Since October 2017, the Company has granted share-based awards under the Company’s Second Amended and Restated 2013 Incentive Compensation Plan (the “2013 Plan”). Under the 2013 Plan, a total of 1,956,250 shares of the Company’s common stock are reserved for issuance. Of this amount, stock grants of 394,377 shares have been awarded and option grants, net of options terminated, expired or forfeited, of 1,086,234 shares were outstanding as of December 31, 2019. Accordingly, 475,639 shares remained available for grants under the 2013 Plan as of that date.

 

Activity with respect to stock options issued by the Company is summarized as follows: 

    Options Outstanding     Options Exercisable    

Range of
Exercise Prices

    Weighted-
average
Exercise
price
per
share
   

Intrinsic
Value (1)

Outstanding at January 1, 2018     1,238,199             $ 1.95     $ 385.60     $ 12.47     $78,486
Exercisable at January 1, 2018             567,210                              
Activity during the year ended December 31, 2018                                            
Granted     167,500             $ 1.40     $ 2.18     $ 1.81     $11,050
Cancelled or forfeited     (19,303 )           $ 1.95     $ 385.60     $ 18.77      
Outstanding at December 31, 2018     1,386,396             $ 1.40     $ 385.60     $ 11.09     $11,050
Exercisable at December 31, 2018             973,498                             -
Activity during the year ended December 31, 2019                                            
Granted     256,601             $ 1.65     $ 4.11     $ 3.44     $348,828
Exercised     (3,025 )           $ 1.74     $ 2.60     $ 1.89      
Cancelled or forfeited     (805 )           $ 2.60     $ 385.60     $ 95.37      
Outstanding at December 31, 2019     1,639,167             $ 1.40     $ 83.60     $ 9.87     $2,892,027
Exercisable at December 31, 2019             1,293,121                             $2,244,783

 

  (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options.

 

The following table summarizes information about stock options at December 31, 2019 (contractual life expressed in years):

 

      Options Outstanding     Options Exercisable  
Range of Exercise Prices     Number
Outstanding
    Weighted -
Average
Remaining
Contractual
Life
    Weighted -
Average
Exercise
Price Per
Share
    Number
Exercisable
    Weighted -
Average
Remaining
Contractual
Life
    Weighted -
Average
Exercise
Price Per
Share
 
  $1.40-$45.20       1,563,540       7.72     $ 7.01       1,217,494       7.42     $ 8.17  
  $46.40--$83.60       75,627       1.88     $ 69.09       75,627       1.88     $ 69.09  
          1,639,167       7.45     $ 9.87       1,293,121       7.10     $ 11.73  

 

The per share weighted average grant date fair value of options granted during the years ended December 31, 2019 and 2018 was $1.72 and $0.95, respectively. A summary of the status of the Company’s nonvested stock options during the years ended December 31, 2019 and 2018 is presented below:

 

Nonvested Stock Options   Shares     Weighted -
Average
Per Share
Grant Date
Fair Value
 
Nonvested, January 1, 2018     670,989     $ 1.45  
Activity during the year ended December 31, 2018                
Granted     167,500       0.95  
Forfeited     (15,327 )     25.22  
Vested     (442,879 )     1.71  
Nonvested, December 31, 2018     380,283       0.94  
Activity during the year ended December 31, 2019                
Granted     256,601       1.72  
Exercised     (2,725 )     1.89  
Forfeited     (580 )     42.66  
Vested     (287,533 )     1.35  
Nonvested, December 31, 2019     346,046     $ 1.46  

 

The Company records share-based compensation expense on a straight-line basis over the related vesting period. For the years ended December 31, 2019 and 2018, share-based compensation expense was:

 

Years Ended December 31,
2019   2018
$    799,111   $    1,231,379

 

As of December 31, 2019, approximately $553,221 of unrecognized compensation cost related to share-based compensation arrangements granted under the Plans. That cost is expected to be recognized over a weighted-average period of 1.71 years.

 

The assumptions used in calculating the fair value under the Black-Scholes option-pricing model are as follows: 

    Years Ended December 31,  
    2019     2018  
Dividend yield     0%       0%  
Expected Volatility     52.17% to 52.90%       51.58% to 54.21%  
Risk free Interest rates     1.39% to 1.72%       2.77% to 3.00%  
Expected lives (in years)     5.5 to 6.0       5.8  

 

Warrants 

Warrants have generally been issued in connection with financing transactions and for terms of up to five years. Common stock warrant activity for the years ended December 31, 2019 and 2018 is as follows:

 

      Shares     Weighted -
Average
Exercise
Price
 
Outstanding at January 1, 2018       8,949,078     $ 4.12  
Activity during the year ended December 31, 2018                  
        Exercised       (221,773 )   $ 2.15  
       Terminated       (50,824 )   $ 6.64  
Outstanding at December 31, 2018       8,676,481     $ 4.17  
Activity during the year ended December 31, 2019                  
       Exercised       (2,928,681 )   $ 2.20  
       Terminated       (215,533 )   $ 35.32  
Outstanding at December 31, 2019       5,532,267     $ 4.00  

 

Information regarding outstanding warrants at December 31, 2019 is as follows (contractual life expressed in years):

 Exercise
Price

    Number
Outstanding
    Weighted -
Average
Remaining
Contractual
Life
   

Intrinsic

Value (1)

 
$ 1.83       1,540       0.96     $ 4,574  
$ 2.20       4,025,167       2.40       10,465,434  
$ 5.50       1,110,580       1.67        
$ 16.23       242,021       0.96        
$ 21.10       152,084       0.96        
$ 40.00       875       0.07        
          5,532,267       2.15     $ 10,470,008  

 

  (1) Intrinsic value is calculated as the estimated fair value of the Company's stock at December 31, 2019 less the warrant exercise price of in-the-money warrants.