Quarterly report pursuant to Section 13 or 15(d)

Equity

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Equity
3 Months Ended
Mar. 31, 2015
Equity [Abstract]  
Equity

Note 8 - Equity

 

On February 11, 2015, the Company completed an underwritten offering of 4,444,444 shares of its common stock and warrants to purchase an aggregate of 3,333,333 shares of its common stock at a price to the public of $4.50 per share. The warrants will be exercisable for a period of 4 years at an exercise price of $6.50 per share and have a relative fair value of $3,540,659 on the issuance date. The Company received net proceeds of approximately $18.5 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and excluding the underwriters’ over-allotment option. In addition, the Company granted the underwriters a 30-day option to purchase up to an additional 666,666 shares of common stock and warrants to purchase 499,999 shares of common stock solely to cover over-allotments, if any. The underwriter did not exercise the over-allotment option. 

  

During the three months ended March 31, 2015, the Company issued 1,085,618 common shares for cashless exercise of warrants.

 

Restricted Stock

 

During the three months ended March 31, 2015, the Company granted 239,662 shares of restricted common stock to consultants with a fair value of $1,237,250 based on the stock price on the grant dates. Of the 239,662 restricted share awards granted in 2015, 164,662 shares vested at the date of grant and 75,000 vest over a six-month vesting period. During the three months ended March 31, 2015, the Company issued common shares totaling 203,412 from restricted shares. As of March 31, 2015, 238,973 shares related to the granting of restricted stock remain outstanding and unissued to common stock.

 

Stock Options

 

Following is a summary of option activities for the three months ended March 31, 2015:

 

    Number of Units     Weighted 
Average 
Exercise 
Price
    Weighted 
Average 
Remaining 
Contractual 
Term 
(in years)
    Aggregate 
Intrinsic 
Value
 
Outstanding, December 31, 2014     3,013,084     $ 5.98       8.35     $ 4,728,842  
Granted     536,000       3.57       9.89       -  
Outstanding, March 31, 2015     3,549,084       5.62       8.37       1,398,935  
                                 
Exercisable, March 31, 2015     1,143,885     $ 2.79       6.99     $ 1,102,619  

  

On February 18, 2015, the Company granted its employees and board members 531,000 options to purchase the Company’s common stock with an exercise price of $3.58 per share, a term of 10 years, and a vesting period of 4 years.  The options have an aggregated fair value of $1.4 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 1.69% (2) expected life of 6 years, (3) expected volatility of 86.29%, and (4) zero expected dividends. During the three months ended March 31, 2015, the Company recorded $38,739 in stock-based compensation in relation to these options.

 

On March 9, 2015, the Company its granted employees 5,000 options to purchase the Company’s common stock with an exercise price of $2.91 per share, a term of 10 years, and a vesting period of 4 years.  The options have an aggregated fair value of $11,000 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.83% (2) expected life of 6 years, (3) expected volatility of 86.29%, and (4) zero expected dividends. During the three months ended March 31, 2015, the Company recorded $159 in stock-based compensation in relation to these options.

 

All options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at March 31, 2015 was $10.8 million. During the three months ended March 31, 2015 and 2014, the Company recorded total option expense of $1.0 million and $0.3 million, respectively.

 

Warrants

 

Following is a summary of warrant activities for the three months ended March 31, 2015:

 

    Number of Units     Weighted 
Average 
Exercise 
Price
    Weighted 
Average 
Remaining 
Contractual 
Term 
(in years)
    Aggregate 
Intrinsic 
Value
 
                         
Outstanding, December 31, 2014     7,634,058     $ 1.64       3.97     $ 34,317,224  
Granted     3,333,333       6.50       3.87       -  
Exercised     (1,080,843 )             -       -  
Outstanding, March 31, 2015     9,886,548       3.43       3.69       8,239,536  
                                 
Exercisable, March 31, 2015     9,599,811     $ 3.30       3.53     $ 8,239,536  

  

On February 11, 2015, the Company completed an underwritten offering of 4,444,444 shares of its common stock and warrants to purchase an aggregate of 3,333,333 shares of its common stock at a price of $4.50 per share. The warrants will be exercisable for a period of 4 years at an exercise price of $6.50 per share. The transaction date relative fair value of the warrants of $3,540,659 was determined utilizing the Black-Scholes option pricing model utilizing.

 

During the three months ended March 31, 2015, 1,080,843 warrants were exercised by the warrant holders. The Company issued 1,085,618 shares of common stock as a result of these exercises.

 

During the three months ended March 31, 2015 and 2014, the Company recorded stock-based compensation related to the warrants of $56,516 and $58,934, respectively.