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Stockholders' Equity
 3 Months Ended
Apr. 01, 2017
Stockholders' Equity  
Stockholders' Equity

Note 8—Stockholders’ Equity

 

Serial Preferred Stock

 

The Company’s authorized capital stock includes 10,000,000 shares of serial preferred stock, with a par value of $0.001 per share. No shares of preferred stock were outstanding at April 1, 2017 or December 31, 2016. Subsequent to April 1, 2017, the Company designated 1,000,000 of its shares of preferred stock as Series A preferred stock and established the rights, preferences and privileges of this series (see Note 10).

 

Common Stock

 

On September 23, 2016, the Company completed the 2016 Offering, pursuant to which it sold 9,200,000 shares of its common stock at a price to the public of $1.25 per share.  The net proceeds to the Company from the 2016 Offering were $10.3 million, after deducting underwriting discounts and commissions and offering expenses paid by the Company.

 

Stock-Based Compensation

 

The Company has stock-based compensation awards outstanding pursuant to its Amended and Restated 2006 Equity Incentive Plan, as re-approved by the Company’s stockholders on June 8, 2016 (the “Amended 2006 Plan”), under which a variety of stock-based awards, including stock options, may be granted to employees and non-employee service providers of the Company. In addition to awards granted pursuant to the Amended 2006 Plan, the Company periodically grants equity-based awards outside the Amended 2006 Plan to certain new hires as an inducement to enter into employment with the Company.

 

Subject to certain adjustments, as of April 1, 2017, the Company was authorized to issue a maximum of 10,205,566 shares of its common stock pursuant to awards granted under the Amended 2006 Plan. Pursuant to the terms of the Amended 2006 Plan, the maximum number of shares of common stock subject to the plan automatically increased on the first day of each calendar year from January 1, 2007 through January 1, 2016, by the lesser of (i) 5.0% of the number of shares of common stock issued and outstanding as of the first day of the applicable calendar year, and (ii) 1,200,000 shares of common stock, subject to adjustment for certain corporate actions. Beginning January 1, 2017, the automatic annual increase to the number of shares of common stock that may be issued pursuant to awards granted under the Amended 2006 Plan is equal to the lesser of (i) 2.5% of the number of shares of common stock issued and outstanding as of the first day of the applicable calendar year, and (ii) 1,200,000 shares of common stock, subject to adjustment for certain corporate actions. As of April 1, 2017, the Company had 743,700 shares of common stock available for issuance pursuant to future awards to be granted under the Amended 2006 Plan. Stock options granted under the Amended 2006 Plan generally vest at a rate of at least 25% per year over four years and expire 10 years from the date of grant.

 

The following table summarizes the Company’s stock option activity in the three months ended April 1, 2017:

 

 

 

 

 

 

 

 

 

 

 

Options Outstanding

 

 

 

 

 

 

Weighted-

 

 

 

 

 

 

Average

 

 

 

Number of

 

 

Exercise

 

 

    

Shares

    

 

Price

 

 

 

(in thousands)

 

 

 

Options outstanding at December 31, 2016

 

 

8,798

 

$

1.46

Options granted

 

 

1,020

 

 

1.02

Options exercised

 

 

(83)

 

 

0.74

Options expired/forfeited

 

 

(397)

 

 

1.66

Options outstanding at April 1, 2017

 

 

9,338

 

$

1.41

 

The intrinsic value of stock options exercised in the three months ended April 1, 2017 was $19,000.

 

The following table presents the assumptions used to calculate the weighted-average grant date fair value of stock options granted by the Company during the periods presented:

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

April 1,

 

April 2,

 

 

    

2017

 

2016

 

Expected term (in years)

 

 

6.1

 

 

6.1

 

Expected volatility

 

 

87

%  

 

113

%

Risk-free interest rate

 

 

2.09

%

 

1.66

%

Expected dividends

 

 

 -

 

 

 -

 

Weighted-average grant date fair value per share

 

$

0.75

 

$

0.63

 

 

As of April 1, 2017, the amount of unearned stock-based compensation estimated to be expensed from the Company’s 2017 fiscal year through the Company’s 2019 fiscal year related to unvested stock options is approximately $2.4 million, net of estimated forfeitures. The weighted-average period over which the unearned stock-based compensation is expected to be recognized is approximately 2.6 years. If there are any modifications or cancellations of the underlying unvested awards, the Company may be required to accelerate, increase or cancel any remaining unearned stock-based compensation expense or calculate and record additional expense. Future stock-based compensation expense and unearned stock-based compensation expense will increase to the extent the Company grants additional stock options or other stock-based awards.

 

Warrants

 

The following is a summary of the Company’s warrant activity for the year ended December 31, 2016 and the quarter ended April 1, 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

Number of

 

Average

 

 

Shares

 

Exercise

 

    

(in thousands)

    

Price

Warrants outstanding - January 2, 2016

 

 

7,633

 

$

0.59

Warrant granted

 

 

 -

 

 

 -

Warrants exercised

 

 

(2,709)

 

 

0.47

Warrants outstanding - December 31, 2016

 

 

4,924

 

$

0.66

Warrant granted

 

 

 -

 

 

 -

Warrants exercised

 

 

 -

 

 

 -

Warrants outstanding - April 1, 2017

 

 

4,924

 

$

0.66