Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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

9. Stockholders’ Equity


Common Stock Warrants


During the three months ended March 31, 2019, there were no changes in the Company’s outstanding warrants. As of March 31, 2019, the Company has outstanding warrants to purchase 9,030,730 shares of common stock issuable at a weighted-average exercise price of $1.89 per share.


Equity Compensation Plans


Stock Options


The following is a summary of the stock option activity for the three months ended March 31, 2019:


 

 

Shares

 

 

Weighted

Average

Exercise

Price

 

Outstanding, December 31, 2018

 

 

465,303

 

 

$

11.60

 

Granted

 

 

2,630,821

 

 

 

1.06

 

Expired

 

 

(1,338

)

 

 

20.54

 

Forfeited

 

 

(86,032

)

 

 

1.76

 

Outstanding, March 31, 2019

 

 

3,008,754

 

 

$

2.66

 


The weighted average grant-date fair value of stock options granted during the three months ended March 31, 2019 was $0.80. The fair value of each stock option was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions for stock options granted during the three months ended March 31, 2019:


Dividend yield

 

 

0.0

%

Expected volatility

 

 

131.1

%

Risk-free interest rate

 

 

2.5

%

Expected lives (years)

 

 

5.5

 


The risk-free interest rate is based on U.S. Treasury interest rates at the time of the grant whose term is consistent with the expected life of the stock options. The Company used an average historical stock price volatility based on an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms, as the Company had limited to no trading history for its common stock. Expected term represents the period that the Company’s stock option grants are expected to be outstanding. The Company elected to utilize the “simplified” method to estimate the expected term. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option.


Expected dividend yield was considered to be 0% in the option pricing formula since the Company had not paid any dividends and had no plans to do so in the future. As required by ASC 718, the Company reviews recent forfeitures and stock compensation expense. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Additionally, the Company conducts a sensitivity analysis. Based on these evaluations the Company currently does not apply a forfeiture rate.


The Company recognized $1,155,121 and $133,807 in stock-based compensation expense for the three months ended March 31, 2019 and 2018, respectively for the Company’s stock option awards.


The following table summarizes information about stock options outstanding at March 31, 2019:


Options Outstanding

 

 

Options Vested and Exercisable

 

Balance

as of

3/31/2019

 

 

Weighted

Average

Remaining

Contractual

Life

(Years)

 

 

Weighted

Average

Exercise

Price

 

 

Balance

as of

3/31/2019

 

 

Weighted

Average

Remaining

Contractual

Life

(Years)

 

 

Weighted

Average

Exercise

Price

 

3,008,754

 

 

9.4

 

 

$2.66

 

 

1,256,273

 

 

9.0

 

 

$4.28

 


As of March 31, 2019, the unrecognized stock-based compensation expense related to unvested stock options was $3,088,286 which is expected to be recognized over a weighted average period of approximately 16.5 months.


Restricted Stock


The following is a summary of restricted stock and restricted stock unit activity for the three months ended March 31, 2019:


 

 

Shares

 

Unvested, December 31, 2018

 

 

56,520

 

Granted

 

 

1,579,179

 

Vested

 

 

(747,805

)

Forfeited

 

 

(49,215

)

Unvested, March 31, 2019

 

 

838,679

 


The Company recognized $905,183 and $238,086 in stock-based compensation expense related to restricted stock and restricted stock unit awards during the three months ended March 31, 2019 and March 31, 2018, respectively.


As of March 31, 2019, there are 186,800 shares remaining available for grant under the Company’s equity compensation plans.