Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.19.3
Stockholders' Equity
9 Months Ended
Sep. 30, 2019
Stockholders' Equity  
Stockholders' Equity

9. Stockholders’ Equity


Common Stock Warrants


During the three months and nine months ended September 30, 2019, there were no changes in the Company’s outstanding warrants. As of September 30, 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


The Company maintains various equity compensation plans with substantially similar provisions under which it may award employees, directors and consultants incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the plans. In July 2019, the Company’s shareholders approved an increase of 4,000,000 shares in the number of shares available for grant. As of September 30, 2019, there were 4,021,160 shares remaining available for grant under these plans.


Stock Options


The following is a summary of the stock option activity for the nine months ended September 30, 2019:


 

 

Shares

 

 

Weighted

Average

Exercise

Price

 

Outstanding, December 31, 2018

 

 

465,303

 

 

$

11.60

 

Granted

 

 

2,920,021

 

 

 

1.03

 

Exercised

 

 

(2,000

)

 

 

1.06

 

Expired

 

 

(16,821

)

 

 

4.43

 

Forfeited

 

 

(203,149

)

 

 

1.46

 

Outstanding, September 30, 2019

 

 

3,163,354

 

 

$

2.54

 


The weighted average grant-date fair value of stock options granted during the nine months ended September 30, 2019 was $0.91. 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 September 30, 2019:


Dividend yield

 

 

0.0

%

Expected volatility

 

 

132.0

%

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 of the forfeiture rate. Based on these evaluations the Company currently does not apply a forfeiture rate.


The following table summarizes information about stock options outstanding at September 30, 2019:


Options Outstanding

 

 

Options Vested and Exercisable

 

Options

 

 

Weighted

Average

Remaining

Contractual

Life

(Years)

 

 

Weighted

Average

Exercise

Price

 

 

Options

 

 

Weighted

Average

Remaining

Contractual

Life

(Years)

 

 

Weighted

Average

Exercise

Price

 

3,163,354

 

 

8.9

 

 

$2.54

 

 

1,346,174

 

 

8.4

 

 

$4.18

 


Restricted Stock


The following is a summary of restricted stock and restricted stock unit activity for the nine months ended September 30, 2019:


 

 

Shares

 

Unvested, December 31, 2018

 

 

56,520

 

Granted

 

 

1,579,179

 

Vested

 

 

(747,805

)

Forfeited

 

 

(49,465

)

Unvested, September 30, 2019

 

 

838,429