Quarterly report pursuant to Section 13 or 15(d)

Equity

v2.4.0.8
Equity
 3 Months Ended
Mar. 31, 2014
Equity [Abstract]  
Equity
Note 7 – Equity
 
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. 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 rateh1.64%, expected volatility - 88%, expected dividend yield - 0%, and a contractual life of 5 years. As of March 31, 2014, all the warrants were outstanding.
 
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. To date 500 shares have been sold under the Sales Agreement with MLV (see Note 8 – Subsequent Event).
 
Placement Agent – During January 2014, in connection with 2014 Closing, the Company issued Laidlaw & Co. 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.
 
Approval of the Equity Incentive Plan
 
During 2013, the Company granted employees, consultant and board members 312,500 shares of restricted stock. During the quarter ended March 31, 2014, the Company granted an additional 325,167 shares of restricted stock. During the three months ended March 31, 2014, 180,104 shares were issued for shares granted under the Equity Incentive Plan. Of the total shares of restricted stock, 22,500 shares vest 1 year from the grant date, 149,167 shares have a vesting period of 4 years and 150,000 shares vest at date of grant. The remaining restricted shares granted are performance based and vest over time.
 
All restricted stock issued and outstanding is being amortized over their respective vesting periods. The unrecognized compensation expense related to the restricted stock granted at March 31, 2014 was $1,391,318. During the three months ended March 31, 2014 and 2013, the Company recorded expense of $1,410,588 and $0, respectively, related to the restricted stock granted.
 
Stock Option Plan
 
The following is a summary of stock options:
 
               
Weighted
        
               
Average
        
         
Weighted
    
Remaining
    
Aggregate
  
   
Number of
    
Average
    
Contractual
    
Intrinsic
  
   
Units
    
Exercise Price
    
Term (in years)
    
Value
  
                         
Outstanding, December 31, 2013
    
1,985,384
    
 $
3.23
      
8.34
    
 $
5,908,696
  
 Issued
    
291,500 
      
 7.86
      
10 
          
 Exercised
    
(11,655)
      
0.78
      
-
      
-
  
Outstanding, March 31, 2014
    
2,265,229
    
 $
3.84
      
8.34
    
 $
19,514,362
  
 
During the quarter ended March 31, 2014, the Company granted employees and board members 291,500 options to purchase the Company’s common stock with exercise prices ranging from $5.55 to $8.19 and a term of 10 years and vest over a 4-year period.  The fair value of $1.7 million was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.88% - 2.07% (2) expected life of 6 years, (3) expected volatility of 87.76%, and (4) zero expected dividends.
 
During quarter ended March 31, 2014, the Company received gross proceeds of $5,220 for exercise of options for 11,655 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 March 31, 2014 was $5,399,710. During the three months ended March 31, 2014 and 2013, the Company recorded option expense of $281,404 and $94,200, respectively.
 
Warrants
Following is a summary of warrant activities for the quarter ended March 31, 2014:
 
 
               
Weighted
        
               
Average
        
         
Weighted
    
Remaining
    
Aggregate
  
   
Number of
    
Average
    
Contractual
    
Intrinsic
  
   
Units
    
Exercise Price
    
Term (in years)
    
Value
  
                         
Outstanding, December 31, 2013
    
9,673,290
      
1.06
      
4.89
    
  47,396,307
  
  Granted
    
306,928
      
7.88
      
  6.63
          
  Exercised
    
(299,885
)
    
1.04
                  
Outstanding, March 31, 2014
    
9,680,333
    
$
1.28
      
4.71
    
$
107,268,785
  
 
During the quarter ended March 31, 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 2014 Closing. . 
 
During the three months ended March 31, 2014, the Company also granted a consultant warrants to purchase 100,000 shares of the Company’s common stock with exercise prices of $5.55 per share and a term of 10 years.  These warrants vest when certain milestones are met.  
  
During the quarter ended March 31, 2014, 299,885 warrants were exercised by the warrant holders. The Company issued 253,330 shares of common stock and received gross proceeds of $23,709.
 
During the quarter ended March 31, 2014 and 2013, the Company recorded stock-based compensation related to the warrants of $58,934 and $0, respectively.