|3 Months Ended|
Mar. 31, 2019
Note 4 - Equity
In January 2019, the Company sold 924,500 common shares through its at-the-market program, resulting in net proceeds of $0.4 million.
In March 2018, the Company sold an aggregate of 30,237,894 units consisting of an aggregate of 30,237,894 shares of common stock, 7,559,445 series A warrants and 22,678,393 series B warrants, with each series A warrant exercisable for one share of Common Stock at an exercise price of $0.60 per share and each series B warrant exercisable for one share of Common Stock at an exercise price of $0.70 per share, resulting in gross proceeds of $15.1 million (each unit was sold at $0.50 per unit), and net proceeds of $13.8 million after deducting expenses relating to dealer-manager fees and other offering expenses.
During the three months ended March 31, 2019, the Company granted its employees options to purchase 0.7 million shares of the Company’s common stock with an exercise price ranging from $0.40 to $0.58 per share, a term of 10 years, and a vesting period of 4 years. The options have an aggregated fair value of $0.2 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 2.45% to 2.60% (2) expected life of 6 years, (3) expected volatility range from 78.5% to 79.0%, and (4) no expected dividends. During the three months ended March 31, 2019, options to purchase 0.1 million shares were cancelled upon the termination of employment for several employees.
The fair values of all options issued and outstanding are being amortized over their respective vesting periods. The unrecognized compensation expense at March 31, 2019 was $2.5 million. During the three months ended March 31, 2019 and 2018, the Company recorded total option expense of $0.3 million and $0.6 million, respectively.
As of March 31, 2019, the Company had options to purchase 7.8 million common shares outstanding with a weighted average exercise price of $1.65 per share and a weighted average remaining contractual term of 8.01 years.
During the three months ended March 31, 2019, holders of March 2018 series A warrants exercised 2.5 million shares, resulting in proceeds of $1.5 million to the Company. . The remaining March 2018 series A warrants to purchase 5.0 million shares have expired. There were also warrants to purchase 4.9 million shares that expired during the three months ended March 31, 2019.
Following is a summary of warrant activity for the three months ended March 31, 2019:
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef