Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.19.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Stockholders' Equity

NOTE 4 - Stockholders’ Equity

 

Common Stock

 

In the first quarter of 2018, the Company issued 23,256 shares of common stock for services valued at $40,000.

 

In January 2019, the Company issued 200,000 shares of common stock to directors valued at $1.50 per share, or $300,000, with such shares to vest ratably over four quarterly installments, subject in each case to such director’s continuing service as a director.

 

Also in January 2019, the Company issued 88,431 shares of common stock upon the cashless exercise of Unit Purchase Options issued in our June 2018 public offering.

 

In January and February 2019, the Company issued a total of 70,230 shares of common stock upon the exercise of 70,230 warrants having an exercise price of $1.08 resulting in gross cash proceeds of $75,848.

 

In March 2019, the Company issued 1,500 shares of common stock to the Company’s Vice President of Business Development in connection with his achievement of performance, with such shares vesting immediately. 

 

Also in March 2019, the Company closed a public offering of equity securities in which it issued 1,400,800 shares of common stock and warrants to purchase a total of 420,240 shares of common stock resulting in net proceeds of approximately $1,679,230, after deducting placement agent commissions and other offering expenses payable by the Company.

 

Deferred Compensation

 

In previous years and in the three months ended March 31, 2019, the Company issued to various employees, directors, and contractors shares of the Company’s common stock, subject to restrictions, pursuant to the 2013 Equity Incentive Plan (the “2013 Plan”). Such shares were valued at the fair value at the date of issue. The fair value was expensed as compensation over the vesting period and recorded as a reduction of stockholders’ equity. During the three months ended March 31, 2019 and March 31, 2018, $78,000 and $21,217, respectively, of the unvested compensation cost related to these issues was recognized.

 

As of March 31, 2019 and December 31, 2018, the balance of unvested compensation to be recognized was $225,000 and $21,355, respectively, and is recorded as prepaid stock compensation as of those dates.

 

Stock Options

 

In October 2018, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Plan by 900,000 shares of our common stock to a total of 1,650,000 shares. As of March 31, 2019, an aggregate of 750 shares and 97,429 shares of common stock were reserved for issuance under the 2011 Plan and the 2013 Plan, respectively.

 

During the three months ended March 31, 2019, the Company granted options to purchase a total of 209,956 shares of common stock to 18 employees with vesting periods ranging from immediately upon issuance to 4 years beginning January 2019. 

 

During the three months ended March 31, 2018, the Company granted options to purchase a total of 193,688 shares of common stock to 10 employees with vesting periods ranging from 22 days to 4 years beginning March, 2018. 

 

The Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company’s stock on the dates of grant. Stock options are typically granted throughout the year and generally vest over four years of service and expire ten years from the date of the award, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period for each stock option award.

 

Total share-based compensation expense included in the consolidated statements of operations for the three months ended March 31, 2019 and 2018 is $254,206 and $161,522, of which $176,206 and $140,305 is related to stock options, respectively.

 

The fair value of share-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the three months ended March 31, 2019 and 2018:

 

Assumptions:

 

    2019     2018  
Dividend yield     0.00       0.00  
Risk-free interest rate     2.19-2.54 %     2.86-2.94 %
Expected volatility     105.2-106.1 %     137.2-137.3 %
Expected life (in years)     5       10  

 

Option activity for the three months ended March 31, 2019 and the year ended December 31, 2018 was as follows:

 

          Weighted Average    

Weighted

Average

       
          Exercise     Remaining     Aggregate  
          Price     Contractual     Intrinsic  
    Options     ($)     Life (Yrs.)     Value ($)  
Options outstanding at December 31, 2017   299,938     4.57     6.03     -  
Granted     534,329       1.45       6.31       -  
Exercised     -       -       -       -  
Forfeited or cancelled     (8,000 )     4.59       -       -  
Options outstanding at December 31, 2018     826,267       2.49       6.22       131,829  
Granted     209,956       1.60       4.81       30,737  
Exercised     -       -       -       -  
Forfeited or cancelled     -       -       -       -  
Options outstanding March 31, 2019     1,036,223       2.31       5.94       162,566  
Options expected to vest in the future as of March 31, 2019     425,893       2.18       5.94       78,339  
Options exercisable at March 31, 2019     610,330       2.40       5.94       84,227  
Options vested, exercisable, and options expected to vest at March 31, 2019     1,036,223       2.31       5.94       162,566  

 

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock for those awards that have an exercise price currently below the $1.68 closing price of our Common Stock on March 29, 2019. 165,208 of the 2019 option grants have an exercise price currently below $1.68.

 

At March 31, 2019, there was $414,562 of unrecognized share-based compensation expense related to unvested share options with a weighted average remaining recognition period of 3.21 years.

 

Warrants

 

Warrant activity for the three months ended March 31, 2019 and 2018 was as follows:

 

          Weighted Average    

Weighted

Average

 
          Exercise     Remaining  
          Price     Contractual  
    Warrants     ($)     Life (Yrs.)  
Warrants outstanding at December 31, 2017     1,645,500       3.97       3.84  
Granted     -       -       -  
Exercised     -       -       -  
Forfeited or cancelled     -       -       -  
Options outstanding at March 31, 2018     1,645,500       3.97          
                         
Options outstanding at December 31, 2018     3,050,600       2.75       3.86  
Granted     420,240       1.61       4.96  
Exercised     (70,230 )     1.08       -  
Forfeited or cancelled     -       -       -  
Options outstanding at March 31, 2019     3,400,610       2.64       3.63