Quarterly report pursuant to Section 13 or 15(d)

Equity

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Equity
9 Months Ended
Sep. 30, 2014
Equity [Abstract]  
Equity

Note 7 – Equity

 

On December 9, 2013, the Company entered into another engagement agreement with its placement agent for the 2013 Common Stock Offering, ‘the Offering”) The Offering was completed in two tranches, on December 9, 2013 and January 10, 2014. The agreement entered on December 9, 2013 had similar terms as the 2012 agreement, including a cash fee equal to 10% of the gross proceeds raised, a non-accountable expense reimbursement equal to 2% of the gross proceeds raised and warrants to purchase shares of the Company’s Common Stock in an amount equal to 10% of the shares of common stock issued or issuable. Subsequent to the closing of the 2013 offering, the placement agent continued to provide certain financial advisory services to the Company until three months after the Company had up-listed its securities for trading on a U.S. National Exchange for a monthly fee of $25,000.

 

On December 27, 2013, the Company completed the first sale of the Offering pursuant to a Unit Purchase Agreement, with certain accredited investors (the “Investors”) pursuant to which: the Investors agreed to purchase (i) an aggregate of 554,310 shares (the “Shares”) of common stock at $6.00 per share and (ii) five-year warrants to purchase an aggregate of 138,577 shares of common stock at an exercise price of $9.00 per share. The Company received $3,325,860 in gross proceeds from the sale of securities. 

 

In January 2014, the Company completed the final tranche of a private placement of the Company’s common stock and warrants and received approximately $3.3 million total gross proceeds from accredited investors (“2014 Closing”). The Company paid its placement agent total cash fees of approximately $395,000 and paid attorney fees of $40,000 for their services resulting in net proceeds of $2,873,557. In the 2014 Closing, the Company sold 551,810 shares of common stock at $6.00 per share and granted 137,952 units of five-year warrants with an exercise price of $9.00 per share. The warrants are exercisable for a period of five years from the date of issuance. The transaction date fair value of the warrants of $0.6 million was determined utilizing the Black-Scholes option pricing model utilizing the following assumptions: risk free interest rate - 1.64%, expected volatility - 88%, expected dividend yield - 0%, and a contractual life of 5 years. During the nine months ended September 30, 2014, 83,332 warrants were exercised.

 

On March 24, 2014, the Company filed a shelf registration statement on Form S-3 (the “Registration Statement”) which was effective on April 17, 2014. This Registration Statement contained two prospectuses: (i) a base prospectus which covers the offering, issuance and sale by the Company of up to $200,000,000 of its common stock, preferred stock, warrants and/or units; and (ii) a sales agreement prospectus covering the offering, issuance and sale by us of up to a maximum aggregate offering price of $75,000,000 of its common stock that may be issued and sold under a sales agreement (the “ Sales Agreement ” ) with MLV & Co. LLC ( “ MLV ” ) dated March 24, 2014. The Company will pay MLV in cash, upon the sale of common stock pursuant to the Sales Agreement, an amount equal to 3.0% of the gross proceeds from the sale of common stock. On April 28, 2014, the Company issued 500 shares and received net proceeds of $6,000 under the Sales Agreement with MLV.

 

Placement Agent – During January 2014, in connection with the Common Stock Offering, the Company issued the Placement Agent warrants to purchase an aggregate of 68,976 shares of common stock with an exercise price of $9.00 per share. The transaction date fair value of the warrants of $0.2 million was determined utilizing the Black-Scholes option pricing model utilizing the following assumptions: risk free interest rate – 1.64%, expected volatility - 88%, expected dividend yield - 0%, and a contractual life of 5 years.

 

Public Offering - On June 30, 2014, the Company received gross proceeds of $12,525,000 from the public offering of 1,670,000 shares of the Company’s common stock, $0.001 par value per share at a price to the public of $7.50 per share less underwriting discounts. The Company paid an underwriting discount of $876,750, paid the other offering expenses of $125,000, and paid attorney and auditor fees of $72,000 resulting in net proceeds of $11,451,250.. Under the terms of the underwriting agreement, the Company also granted the underwriters a 30-day option to purchase up to an additional 250,000 shares of common stock to cover over-allotments, if any, at the offering price.

 

On July 10, 2014, the underwriter exercised their over-allotment option to purchase an additional 157,123 shares from the Company for $7.50 per share. Including the exercise of the over-allotment option of $1.2 million, in gross proceeds, Actinium’s offering totaled 1,827,123 shares, representing gross proceeds of approximately $13.7 million and approximately $12.6 million net after deducting the underwriting discount and the other offering expenses.

  

Approval of the Equity Incentive Plan

 

During the nine months ended September 30, 2013, the Company granted employees, consultants and board members 180,000 shares of restricted stock. During the nine months ended September 30, 2014, the Company granted 602,907 shares of restricted stock and cancelled 50,000 shares of restricted stock. Of the total shares of restricted stock granted, 20,000 shares vest 3 months from the grant date, 30,240 shares vest 1 year from the grant date, 202,667 shares have a vesting period of 4 years and 350,000 shares vest at the date of grant. The remaining restricted shares granted are performance based and upon the achievement of certain milestones.

 

Stock Option Plan

 

Following is a summary of option activities for the nine months ended September 30, 2014:

 

    Number of Units     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (in years)     Aggregate Intrinsic Value  
Outstanding, December 31, 2013     1,985,384     $ 3.23       8.34     $ 5,908,696  
Issued     1,323,100       8.89       10.00       -  
Exercised     (310,400 )     0.96       -       -  
Outstanding, September 30, 2014     2,998,084       5.98       8.60       5,731,296  
                                 
Exercisable, September 30, 2014     643,206     $ 1.04       6.27     $ 3,734,610  

 

During the nine months ended September 30, 2014, the Company granted employees and its board members 1,323,100 options to purchase the Company’s common stock with exercise prices ranging from $5.55 to $11.95 and a term of 10 years with vesting over a 4-year period.  The options have an aggregated fair value of $8.6 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.84% - 2.07% (2) expected life of 6 years, (3) expected volatility of 86.56% to 87.76%, and (4) zero expected dividends.

 

During the nine months ended September 30, 2014, the Company received gross proceeds of $275,153 for exercise of options for 310,400 shares of the Company’s common stock.

 

All options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2014 was $10,953,856. During the three months ended September 30, 2014 and 2013, the Company recorded option expense of $734,799 and $95,971, respectively. During the nine months ended September 30, 2014 and 2013, the Company recorded option expense of $1,623,994 and $284,371, respectively.

 

Warrants

 

Following is a summary of warrant activities for the nine months ended September 30, 2014:

 

    Number of Units     Weighted Average Exercise Price     Weighted Average Remaining Contractual Term (in years)     Aggregate Intrinsic Value  
                         
Outstanding, December 31, 2013     9,673,290     $ 1.06       4.89     $ 47,396,307  
Granted     406,928       8.81       7.46       -  
Exercised     (2,117,304 )     0.96       -       -  
Forfeited     (29,167 )     6.70       -       -  
Outstanding, September 30, 2014     7,933,747       1.47       4.15       42,641,772  
                                 
Exercisable, September 30, 2014     7,733,747     $ 1.28       4.01     $ 42,641,772  

 

During the nine months ended September 30, 2014, the Company granted warrants to purchase 137,952 shares of the Company’s common stock to investors and warrants to purchase 68,976 shares of the Company’s common stock to its placement agent in connection with the January 2014 closing.

 

During the nine months ended September 30, 2014, the Company also granted two consultants warrants to purchase 200,000 shares of the Company’s common stock with exercise prices ranging from $5.55 to $11.66 per share and a term of 10 years. These warrants vest when certain milestones are met. The fair value of the February 2014 and June 2014 were $0.6 million and $1.2 million, respectively.

 

During the nine months ended September 30, 2014, 2,117,304 warrants were exercised by the warrant holders. The Company issued 1,984,524 shares of common stock and received gross proceeds of $116,936.

 

During the three months ended September 30, 2014 and 2013, the Company did not record any stock-based compensation related to the warrants. During the nine months ended September 30, 2014 and 2013, the Company recorded stock-based compensation related to the warrants of $98,224 and $0, respectively.