Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Stockholders' Equity

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Note 4 - Stockholders' Equity
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
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, common stock purchase warrants, or common stock purchase options. Our common stock purchase options and stock purchase warrants have lives of up to
ten
years from the grant date. Awards vest either upon the grant date or over varying periods of time. The stock options provide for exercise prices equal to or greater than the fair 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. As of
September 30, 2018,
we have approximately
6.1
million shares of common stock reserved for issuance upon the exercise of share-based compensation awards.
 
We typically record share-based compensation expenses on a straight-line basis over the requisite service period. Share-based compensation expenses included in the statements of operations are as follows:
 
    Three Months Ended September 30,
    2018   2017
         
Research and development expenses   $
22,917
    $
185,492
 
General and administrative expenses    
111,778
     
144,263
 
Total   $
134,695
    $
329,755
 
 
    Nine Months Ended September 30,
    2018   2017
         
Research and development expenses   $
110,417
    $
993,927
 
General and administrative expenses    
459,856
     
510,216
 
Total   $
570,273
    $
1,504,143
 
 
Stock Options
 
A summary of stock option activity and related information for the
nine
months ended
September 30, 2018
follows:
 
    Number of Options   Weighted-
Average
Exercise
Price
  Weighted-
Average
Remaining
Contractual
Life (in years)
  Aggregate
Intrinsic Value
                 
Outstanding at January 1, 2018    
1,894,077
    $
19.76
     
4.7
    $
108,000
 
Granted    
488,640
    $
1.13
     
 
     
 
 
Exercised    
-
    $
-
     
 
    $
-
 
Forfeited    
(550,215
)   $
34.52
     
 
     
 
 
Outstanding at September 30, 2018    
1,832,502
    $
10.37
     
5.6
    $
-
 
                                 
Exercisable at September 30, 2018    
1,300,538
    $
14.08
     
4.9
    $
-
 
 
Range of Exercise Prices   Number of Options
Outstanding
  Weighted-
Average
Exercise
Price
  Weighted-
Average
Remaining
Contractual
Life (in years)
  Aggregate
Intrinsic Value
$1.00
-
$3.50
   
638,640
    $
1.15
     
7.7
    $
-
 
$3.51
-
$13.00
   
682,076
    $
9.59
     
5.2
     
-
 
$13.01
-
$26.00
   
343,782
    $
14.79
     
3.3
     
-
 
$26.01
-
$39.00
   
65,504
    $
30.85
     
2.7
     
-
 
$39.01
-
$56.00
   
102,500
    $
45.03
     
4.8
     
-
 
 
   
1,832,502
    $
10.37
     
5.6
    $
-
 
 
 
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:
 
      Nine Months Ended September 30,  
      2018       2017  
Annual dividend    
 
-
 
     
 
-
 
 
Expected life (in years)    
 2.5
-
5.3 
     
 0.3
-
5.5 
 
Risk free interest rate    
 2.7%
-
2.8% 
     
 0.8%
-
1.9% 
 
Expected volatility    
 97%
-
117% 
     
 62%
-
83% 
 
 
Options granted in the
nine
months ended
September 30, 2018
and
2017,
had a weighted average grant date fair value of
$0.77
and
$3.19
per share, respectively.
 
Unrecognized compensation cost for unvested stock option awards outstanding at
September 30, 2018
was approximately
$363,000
to be recognized over approximately
1.3
years.
 
RSUs
 
We have granted restricted stock units (RSUs) to certain employees and board members 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 grant date fair value of RSUs is based upon the market price of the underlying common stock on the date of grant.
 
In the
nine
months ended
September 30, 2018,
we granted
45,046
RSU’s. RSUs granted in the
nine
months ended
September 30, 2018
and
2017,
had a weighted average grant date fair value of
$1.11
and
$5.37,
respectively.
 
RSUs vesting in the
nine
months ended
September 30, 2018
had a total value of approximately
$25,000.
 
At
September 30, 2018,
we had
56,281
outstanding RSUs with a weighted average grant date fair value of
$3.24
and a total intrinsic value of approximately
$60,000.
No
RSUs were converted in the
nine
months ended
September 30, 2018.
Unrecognized compensation cost for unvested RSUs at
September 30, 2018
was approximately
$37,000
to be recognized over approximately
0.75
years.
 
Restricted Stock
 
We have granted restricted stock to certain board members that vest quarterly over the grant year. The grant date fair value of the restricted stock is based upon the market price of the common stock on the date of grant.
 
In the
nine
months ended
September 30, 2018,
we granted
45,046
shares of restricted stock. Restricted stock granted in the
nine
months ended
September 30, 2018
and
2017,
had a weighted average grant date fair value of
$1.11
and
$3.63,
respectively.
 
Restricted stock vesting in the
nine
months ending
September 30, 2018,
had a weighted average grant date fair value of
$2.65
and a total intrinsic value of approximately
$81,000.
 
At
September 30, 2018,
we had
33,785
shares of restricted stock outstanding with an average grant date fair value of
$1.11.
Unrecognized compensation cost for unvested restricted stock awards at
September 30, 2018
was approximately
$38,000
to be recognized over approximately
0.75
years.
 
Stock Purchase Warrants.
 
We have issued warrants to purchase common stock to certain officers, directors, stockholders and service providers as well as in conjunction with debt and equity offerings and at various times replacement warrants were issued as an inducement for warrant exercises.
 
In
May 2016
and
August 2017,
we issued a total of
1,746,173
and
2,250,000
common stock purchase warrants, respectively in conjunction with our offerings. Such warrants are classified as liabilities due to the existence of certain net cash settlement provisions
contained in the warrants. At
September 30, 2018,
after giving effect to exercises,
2,982,709
of these common stock purchase warrants remain outstanding and are recorded at fair value as mark-to-market liabilities (see Note
3
).
 
A summary of outstanding warrants at
September 30, 2018
follows:
 
Range of Exercise
Prices
  Number of
Warrants
Outstanding
  Range of Expiration Dates
$1.11
-
$5.79
   
3,017,326
   
May 2021 - August 2024
$12.80
-
$12.90
   
39,296
   
January 2022
$16.20
-
$16.30
   
174,544
   
March 2020
$22.10
-
$27.90
   
153,755
   
March 2019 - January 2021
$34.50
-
$39.00
   
5,784
   
October 2019
$39.10
-
$39.20
   
230,772
   
October 2020 - October 2021
$47.30
-
$52.20
   
275,897
   
January 2019 - July 2019
 
   
3,897,374
   
 
 
Preferred and Common Stock
 
We have outstanding
1,000,000
shares of Series A
4.5%
Convertible Preferred Stock issued in
December 2016.
Shares of the Series A
4.5%
Convertible Preferred Stock are convertible into
3,887,387
shares of the Company’s common stock subject to certain ownership restrictions.