Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.2.0.727
Stockholders' Equity
6 Months Ended
Jun. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
Note 4.   Stockholders’ Equity 
 
We have granted share-based compensation awards to employees, board members and service providers. Awards may consist of common stock, restricted common stock, restricted common stock units, warrants, or stock options. Our stock options and warrants have lives of up to ten years from the grant date. The stock options and warrants vest either upon the grant date or over varying periods of time. The stock options we grant provide for option exercise prices equal to or greater than the fair market value of the common stock at the date of the grant. Restricted stock units grant the holder the right to receive fully paid common shares with various restrictions on the holder’s ability to transfer the shares. Vesting of the restricted stock units is similar to that of stock options. As of June 30, 2015, we have approximately 42.6 million shares of common stock reserved for issuance upon the exercise of such awards.
 
Share-based compensation expense included in the statements of operations for the three and six months ended June 30, 2015 and 2014 was as follows:
 
 
 
Three Months Ended June 30,
 
 
 
2015
 
2014
 
 
 
 
 
 
 
Research and development expenses
 
$
294,574
 
$
244,985
 
General and administrative expenses
 
 
331,385
 
 
296,041
 
Total
 
$
625,959
 
$
541,026
 
  
 
 
Six Months Ended June 30,
 
 
 
2015
 
2014
 
 
 
 
 
 
 
Research and development costs
 
$
572,754
 
$
478,558
 
General and administrative expenses
 
 
743,063
 
 
2,503,467
 
Total
 
$
1,315,817
 
$
2,982,025
 
 
Included in general and administrative expenses for the six months ended June 30, 2014 is approximately $2.0 million related to the extension of the term of a common stock purchase warrant based on the holder achieving certain performance based milestones.
 
No income tax benefit was recognized in the consolidated statements of operations for stock-based compensation for the years presented due to the Company’s net loss position.
 
Stock Options A summary of stock option activity during the six months ended June 30, 2015 and related information is included in the table below:
 
 
 
 
 
 
Weighted-
 
Weighted-
 
 
 
 
 
 
 
 
 
 Weighted-
 
Average
 
 
 
 
 
 
 
 
 
Average
 
Remaining
 
 
 
 
 
 
 
 
 
Exercise
 
Contractual
 
Aggregate
 
 
 
Number of Options
 
Price
 
Life (in years)
 
Intrinsic Value
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at January 1, 2015
 
 
18,986,395
 
$
1.89
 
 
5.1
 
$
20,306,807
 
Granted
 
 
540,901
 
$
3.61
 
 
 
 
 
 
 
Exercised
 
 
(33,053)
 
$
1.64
 
 
 
 
$
68,400
 
Forfeited
 
 
(232,611)
 
$
2.27
 
 
 
 
 
 
 
Outstanding at June 30, 2015
 
 
19,261,632
 
$
1.94
 
 
4.8
 
$
11,043,872
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at June 30, 2015
 
 
15,480,734
 
$
2.03
 
 
4.1
 
$
8,243,906
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested and expected to vest
 
 
19,255,386
 
$
1.94
 
 
4.8
 
$
11,043,872
 
  
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
Weighted-
 
Average
 
 
 
 
 
 
 
 
 
Average
 
Remaining
 
 
 
 
 
Number of Options
 
Exercise
 
Contractual
 
Aggregate
 
Range of Exercise Prices
 
Outstanding
 
Price
 
Life (in years)
 
Intrinsic Value
 
$0.50 - $1.00
 
 
7,000,000
 
$
0.80
 
 
5.1
 
$
7,980,000
 
$1.01 - $2.00
 
 
4,101,336
 
$
1.19
 
 
6.4
 
 
3,063,872
 
$2.01 - $3.00
 
 
2,122,669
 
$
2.50
 
 
4.3
 
 
 
 
$3.01 - $5.00
 
 
6,037,627
 
$
3.57
 
 
3.7
 
 
 
 
 
 
 
19,261,632
 
$
1.94
 
 
4.8
 
$
11,043,872
 
 
The Company uses the Black-Scholes option pricing model for “plain vanilla” options and other pricing models as appropriate to calculate the fair value of options. Significant assumptions used in these models include:
 
 
 
Six Months Ended June 30,
 
 
 
2015
 
 
2014
 
 
 
 
 
 
 
 
Annual dividend
 
-
 
 
-
 
Expected life (in years)
 
5.8 - 6.0
 
 
4.0 - 8.5
 
Risk free interest rate
 
1.70% - 1.78%
 
 
1.12% - 2.50%
 
Expected volatility
 
69.3% - 71.8%
 
 
68.8% - 100.0%
 
 
The options granted in the six months ended June 30, 2015 and 2014 had weighted average grant date fair values of $2.26 and $2.16, respectively.
 
Unrecognized compensation cost for unvested stock option awards outstanding at June 30, 2015 was approximately $4,412,000 to be recognized over approximately 2.2 years.
 
RSUs We have granted restricted stock units (RSUs) to certain employees that entitle the holders to receive shares of our common stock upon vesting and subject to certain restrictions regarding the exercise of the RSUs. The fair value of RSUs granted is based upon the market price of the underlying common stock as if they were vested and issued on the date of grant.
 
A summary of our restricted stock unit activity for the six months ended June 30, 2015 is as follows:
 
 
 
 
 
Weighted-
 
 
 
 
 
Average
 
 
 
Number of
 
Grant Date
 
 
 
RSU's
 
Fair Value
 
 
 
 
 
 
Outstanding at January 1, 2015
 
 
447,275
 
$
2.18
 
Granted
 
 
-
 
 
 
 
Vested and converted to common shares
 
 
-
 
 
 
 
Forfeited
 
 
-
 
 
 
 
Outstanding at June 30, 2015
 
 
447,275
 
$
2.18
 
 
 
 
 
 
 
 
 
Exercisable at June 30, 2015
 
 
447,275
 
$
2.18
 
 
Stock Purchase Warrants Warrants to purchase common stock were issued to certain officers, directors, stockholders and service providers. We have also issued warrants in conjunction with debt offerings and equity raises and at various times replacement warrants were issued in conjunction with warrant exercises.
 
A summary of warrant activity for the six months ended June 30, 2015 follows:
 
 
 
 
 
 
 
 
 
 
Weighted-
 
 
 
 
 
 
 
 
 
Weighted-
 
 
Average
 
 
 
 
 
 
 
 
 
Average
 
 
Remaining
 
Aggregate
 
 
 
Number of
 
Exercised
 
 
Contractual Life
 
Intrinsic
 
 
 
Warrants
 
Price
 
 
(in years)
 
Value
 
 
 
 
 
 
 
 
Outstanding at January 1, 2015
 
 
21,422,346
 
$
2.30
 
 
 
3.8
 
$
15,984,739
 
Granted
 
 
-
 
 
 
 
 
 
 
 
 
 
 
Exercised
 
 
(1,724,606)
 
$
1.94
 
 
 
 
 
 
 
 
Forfeited
 
 
(24,794)
 
$
2.13
 
 
 
 
 
 
 
 
Outstanding at June 30, 2015
 
 
19,672,946
 
$
2.34
 
 
 
3.6
 
$
6,951,728
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exercisable at June 30, 2015
 
 
19,672,946
 
$
2.34
 
 
 
3.6
 
$
6,951,728
 
 
Common Stock
In January, 2014, we closed a registered direct offering of 6,872,859 shares of common stock at a price of $2.91 per share. We received aggregate gross proceeds of $20 million and net proceeds of approximately $18,630,000 from the offering. In connection with the offering, we also issued 3,436,435 common stock purchase warrants; the warrants have an exercise price of $3.64, a term of five years and are classified within equity. This offering was made pursuant to our $50 million shelf registration statement declared effective by the SEC on September 13, 2013 (Registration No. 333-190936). Additionally, as a result of this transaction an advisor to the Company met certain capital raising milestones and consequently, the term of their common stock purchase warrant was extended to 5 years.
 
In 2014, we issued 249,163 shares of common stock as a result of sales under our At the Market Offering Agreement. The shares were sold at an average price of $3.55 per share and we received approximately $838,000 in net proceeds.
 
In 2014, we issued a total of 1,234,428 shares of our common stock upon the exercise of outstanding common stock purchase warrants and stock options. The warrants and options were exercised at an average exercise price of $1.44. We received approximately $1,714,000 of net proceeds from the exercises.
 
In 2014, we issued a total of 712,539 shares of our common stock upon the cashless and partial-cashless exercise of 1,194,372 outstanding common stock purchase warrants and stock options. The warrants and options were exercised at an average price of $1.03. We received approximately $20,000 of net proceeds from the exercises.
 
In 2014, we issued 568 shares of common stock upon conversion of certain outstanding RSU’s. We received no proceeds from this transaction.
 
In 2014, we issued 805,972 shares of common stock upon the conversion by the lender of $1 million of principal payments due under our March 2013 long-term debt in accordance with the terms of the loan and security agreement (see Note 3). We received no proceeds from this conversion.
 
In October 2014, we issued 28,119 shares of common stock and common stock purchase warrants to purchase 133,329 to various parties in conjunction with our loan amendment (see Note 3).
 
In the six months ended June 30, 2015, we issued 812,423 shares of common stock as a result of sales under our At the Market Offering Agreement. The shares were sold at an average price of $3.77 per share and we received approximately $2,932,000 in net proceeds.
 
In the six months ended June 30, 2015, we issued 1,705,400 shares of common stock upon the exercise of outstanding common stock purchase warrants. The warrants were exercised at an average exercise price of $1.94. We received approximately $3,074,000 of net proceeds from the exercises.
 
In the six months ended June 30, 2015, we issued 52,259 shares of our common stock upon the cashless exercise of 209,000 outstanding common stock purchase warrants and stock options. The warrants and options were exercised at an average price of $1.72. We received no proceeds from the exercises.