Quarterly report pursuant to Section 13 or 15(d)

Equity

v3.5.0.2
Equity
 9 Months Ended
Sep. 30, 2016
Equity [Abstract]  
Equity

Note 8 - Equity

 

During the nine months ended September 30, 2016, the Company issued 3,504,493 shares of common stock for gross proceeds of $6.8 million as part of its At-The-Market (“ATM”) sales agreement with an investment bank.

 

During the nine months ended September 30, 2016, the Company issued 125,862 common shares for the cashless exercise of warrants.

 

During the nine months ended September 30, 2016, the Company issued 23,212 common shares for the exercise of options.

 

Restricted Stock

 

During the nine months ended September 30, 2016, the Company granted 85,750 shares of restricted common stock to two consultants with an aggregated fair value of $173,850 based on the stock prices on the grant dates. 10,750 shares vested upon execution of the consulting agreement and 75,000 shares vested in six months.

 

During the nine months ended September 30, 2016, 26,000 restricted shares vested and the Company issued common shares.

 

For the three months ended September 30, 2016 and 2015, the Company recorded approximately $0.1 million and $0.3 million, respectively, in stock-based compensation for all of the restricted shares outstanding. For the nine months ended September 30, 2016 and 2015, the Company recorded approximately $0.3 million and $3.5 million, respectively, in stock-based compensation for all of the restricted shares outstanding. 

 

Stock Options

 

Following is a summary of option activities for the nine months ended September 30, 2016:

 

    Number of Units     Weighted 
Average 
Exercise 
Price 		    Weighted 
Average 
Remaining 
Contractual 
Term 
(in years) 		    Aggregate 
Intrinsic 
Value 		 
Outstanding, December 31, 2015     3,971,583       4.34       8.01       2,964,146  
Granted     2,055,000       1.99       9.53       -  
Exercised     (23,212 )     0.78       -       -  
Cancelled     (100,000 )     1.91       -       -  
Outstanding, September 30, 2016     5,903,371       3.58       8.05       347,882  
                                 
Exercisable, September 30, 2016     2,452,200       4.66       6.33       347,882  

 

During the nine months ended September 30, 2016, the Company granted employees and board of directors 2,055,000 options to purchase the Company’s common stock with an exercise price ranging from $1.72 per share to $2.25 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of $3.0 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate range from 1.32% to 1.66% (2) expected life of 6 years, (3) expected volatility of 82.47% to 87.95%, and (4) zero expected dividends. During the nine months ended September 30, 2016, the Company recorded $0.3 million in stock-based compensation in relation to these options.

  

The fair value of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at September 30, 2016 was $7.4 million. During the three months ended September 30, 2016 and 2015, the Company recorded total option expense of $1.0 million and $0.8 million. For each of the nine months ended September 30, 2016 and 2015, the Company recorded total option expense of $2.7 million.

 

Warrants

 

Following is a summary of warrant activities for the nine months ended September 30, 2016:

 

    Number of Units     Weighted 
Average 
Exercise 
Price 		    Weighted 
Average 
Remaining 
Contractual 
Term 
(in years) 		    Aggregate 
Intrinsic 
Value 		 
                         
Outstanding, December 31, 2015     9,018,470       3.73       2.93       10,199,230  
Granted     45,000       1.67                  
Exercised     (183,718 )     -       -       -  
Outstanding, September 30, 2016     8,879,752       3.75       2.20       2,921,516  
                                 
Exercisable, September 30, 2016     8,569,752       3.63       2.02       2,921,516  

 

During the nine months ended September 30, 2016, 183,718 warrants were exercised by the warrant holders. The Company issued 125,862 shares of common stock as a result of these exercises. During the nine months ended September 30, 2016, 45,000 warrants with exercise prices ranging from $1.35 to $1.77 per share were granted.

 

During the three months ended September 30, 2016 and 2015, the Company recorded stock-based compensation expense related to the warrants of $4,966 and $57,772, respectively. During the nine months ended September 30, 2016 and 2015, the Company recorded stock-based compensation expense related to the warrants of $0.1 million and $0.2 million, respectively.