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Stockholders' Equity
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9 Months Ended | ||||||||||||||||||||||||||||||
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Sep. 30, 2012
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| Stockholders Equity [Abstract] | |||||||||||||||||||||||||||||||
| Stockholders Equity | 5. Stockholders' Equity Common and Preferred Stock On December 1, 2010, we entered into an Agreement and Plan of Merger, or the merger agreement, with Transave. Under the terms of the merger agreement, the Transave stockholders received an aggregate of 2.6 million newly issued shares of the Company's common stock and 9.2 million shares of the Company's newly created convertible Series B Preferred Stock. They also received an aggregate of approximately $0.6 million in cash. Collectively, the shares of the Company's common stock and the Company's Series B Preferred Stock (on an as converted basis) issued in connection with the merger represented approximately 47% of the capital stock of the Company on a fully diluted basis. On March 1, 2011, we held a special meeting of our shareholders to consider proposals relating to the conversion of our Series B Preferred Stock and a one-for-ten reverse stock split of the common stock. At the special meeting of shareholders, the shareholders approved all of those proposals. As a result of the approval of the conversion of the Series B Preferred Stock, all 91.7 million shares of the Series B Preferred Stock outstanding (on a pre-reverse stock-split basis) were automatically and immediately converted into 91.7 million shares of our common stock. In addition, we filed Articles of Amendment to our Articles of Incorporation, as amended, to affect a one-for-ten reverse stock split of our common stock. The Amendment became effective on March 2, 2011. As a result of the Amendment, each holder of ten shares of common stock immediately prior to the effectiveness of the reverse stock split became the holder of one share of our common stock. Shareholders received a cash payment in lieu of any fractional shares of common stock they were entitled to receive. The following table (in thousands) summarizes the conversion of the shares of the Series B Preferred Stock and the reverse stock split.
As a result of the conversion of the Series B Preferred Stock, we recorded a non-cash charge for the beneficial conversion feature of the Series B Preferred Stock in the amount of $9.2 million, which reduced net income available to holders of our common shares and, in turn, reduced our earnings per common share on a basic and diluted basis by $0.48. The charge represents the $1.00 difference between the conversion price of the Series B Preferred Stock of $7.10 per share and its carrying value of $6.10 per share. The carrying value of the Series B Preferred Stock was based on its fair value at issuance, which was estimated using the common stock price reduced for a lack of marketability between the acquisition date (or issuance date) and the anticipated date of conversion. In June 2012, the Company amended its Articles of Incorporation to delete all provisions regarding the issuance of the Series B Preferred Stock. On September 28, 2012, we completed a registered direct offering of 6,304,102 shares of our common stock, at a price of $4.07 per share resulting in net proceeds of $25.7 million. Stock Warrants Stock warrant activity for the nine months ended September 30, 2012 consisted of issuance of 0.3 million warrants with a weighted average price of $2.94 and an expiration date of June 29, 2017 and the expiration of 0.2 million warrants outstanding with a weighted average price of $11.00. As of September 30, 2011, we had 0.2 million warrants outstanding with a weighted average price of $11.00 and an expiration date of May 4, 2012. See Note 7 for further information about the outstanding warrants. The Company recognized no stock-based compensation expense related to warrants for the three and nine month periods ended September 30, 2012 and 2011, respectively. |
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