XML 31 R19.htm IDEA: XBRL DOCUMENT
v3.19.1

Stockholders' Equity and Stock-Based Compensation | 3 Months Ended
--- | ---
Mar. 31, 2019
Equity [Abstract] |
Stockholders' Equity and Stock-Based Compensation | NOTE 13. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Common Stock In March 2019, the Company issued 15,000 shares of its restricted common stock, with a fair value of $75, for commission expenses incurred during the three months ended March 31, 2019. During the three months ended March 31, 2019, the Company issued 273,984 shares of its common stock related to the cashless exercise of 384,000 common stock warrants with an exercise price of $1.79. During the three months ended March 31, 2019, the Company issued 90,055 shares of its common stock related to the exercise of 90,055 common stock warrants with an exercise price of $1.79, and received net proceeds of $162. During the three months ended March 31, 2019, 34,090 shares of the Company’s common stock underlying RSUs issued to directors vested, but the issuance and delivery of these shares are deferred until the director resigns. Stock Option Plan On September 17, 2007, the Company’s Board of Directors and stockholders adopted the Company’s 2007 Incentive Stock and Awards Plan, which was subsequently amended on November 5, 2008, February 26, 2012, July 18, 2012, May 2, 2013 and September 27, 2013 (as amended, the “2007 Plan”). The 2007 Plan reached its term in September 2017, and we can no longer issue additional awards under this plan, however, options previously issued under the 2007 Plan will remain outstanding until they are exercised, reach their maturity or are otherwise cancelled/forfeited. On June 13, 2017, the Company’s Board of Directors and stockholders adopted the Company’s 2017 Incentive Stock and Awards Plan (the “2017 Plan” together with the 2007 Plan, the “Plans”). As of March 31, 2019, the 2017 Plan provides for the issuance of a maximum of 2,000,000 shares of the Company’s common stock. The purpose of the Plans are to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in the Company’s development and financial success. Under the Plans, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Internal Revenue Code, non-qualified stock options, restricted stock units and restricted stock. The Plans are administered by the Compensation Committee of the Company’s Board of Directors. The Company had 1,146,640 shares available for future issuances under the 2017 Plan at March 31, 2019. Stock Options A summary of stock option activity under the Plans for the three months ended March 31, 2019 is as follows:
|  | Number of shares |  |  | Weighted Avg. Exercise Price |  |  | Weighted Avg. Remaining Contractual Life |  |  | Aggregate Intrinsic Value |
Options outstanding - January 1, 2019 |  |  | 2,482,009 |  |  | $ | 5.10 |  |  |  |  |  |  |  |  |
Options granted |  |  | 291,000 |  |  | $ | 6.30 |  |  |  |  |  |  |  |  |
Options exercised |  |  | - |  |  | $ | - |  |  |  |  |  |  |  |  |
Options cancelled/forfeit |  |  | (44,287 | ) |  | $ | 6.24 |  |  |  |  |  |  |  |  |
Options outstanding - March 31, 2019 |  |  | 2,728,722 |  |  | $ | 5.21 |  |  |  | 5.76 |  |  | $ | 5,994 |
Options exercisable |  |  | 1,398,665 |  |  | $ | 4.74 |  |  |  | 6.02 |  |  | $ | 3,763 |
Options vested and expected to vest |  |  | 2,604,215 |  |  | $ | 5.17 |  |  |  | 5.78 |  |  | $ | 5,815 |
The aggregate intrinsic value in the table above represents the total pre-tax amount of the proceeds, net of exercise price, which would have been received by option holders if all option holders had exercised and immediately sold all options with an exercise price lower than the market price on March 31, 2019, based on the closing price of the Company’s common stock of $4.98 on that date. During the three months ended March 31, 2019, the Company granted stock options to certain employees. The stock options were granted with an exercise price equal to the current market price of the Company’s common stock, as reported by the securities exchange on which the common stock was then listed, at the grant date and have contractual terms of 10 years. Vesting terms for options granted to employees and consultants during the three months ended March 31, 2019 typically included one of the following vesting schedules: 25% of the shares subject to the option vest and become exercisable on the first anniversary of the grant date and the remaining 75% of the shares subject to the option vest and become exercisable quarterly in equal installments thereafter over three years; and 100% of the shares subject to the option vest on a quarterly basis in equal installments over three years. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plan) and in the event of certain modifications to the option award agreement. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model. Beginning on April 1, 2018, the Company began calculating expected volatility based solely on the historical volatilities of the common stock of the Company. In the past, the expected volatility was based on the historical volatilities of the common stock of the Company and comparable publicly traded companies, the Company previously utilized this methodology based on its estimate that it had limited relevant historical data regarding the volatility of its stock price on which to base a meaningful estimate of expected volatility. The expected term of options granted to employees and directors was determined in accordance with the “simplified approach,” as the Company has limited, relevant, historical data on employee exercises and post-vesting employment termination behavior. The expected risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The financial statement effect of forfeitures is estimated at the time of grant and revised, if necessary, if the actual effect differs from those estimates. For option grants to employees and directors, the Company assigns a forfeiture factor of 10%. These factors could change in the future, which would affect the determination of stock-based compensation expense in future periods. Utilizing these assumptions, the fair value is determined at the date of grant. The table below illustrates the fair value per share determined by the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees:
|  | 2019 |
Weighted-average fair value of options granted |  | $ | 3.71 |
Expected terms (in years) |  |  | 5.8 - 6.1 |
Expected volatility |  |  | 64% - 67 | %
Risk-free interest rate |  |  | 2.54% - 2.68 | %
Dividend yield |  |  | - |
The following table summarizes information about stock options outstanding and exercisable at March 31, 2019:
|  |  | Options Outstanding |  |  | Options Exercisable |
|  |  |  |  |  | Weighted |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Average |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Remaining |  |  | Weighted |  |  |  |  |  | Weighted |
Range of |  |  |  |  |  | Contractual |  |  | Average |  |  |  |  |  | Average |
Exercise |  |  | Number |  |  | Life in |  |  | Exercise |  |  | Number |  |  | Exercise |
Prices |  |  | Outstanding |  |  | Years |  |  | Price |  |  | Exercisable |  |  | Price |
$1.47 - $2.60 |  |  |  | 828,748 |  |  |  | 7.48 |  |  | $ | 2.04 |  |  |  | 479,534 |  |  | $ | 2.13 |
$2.76 - $4.22 |  |  |  | 535,871 |  |  |  | 6.73 |  |  | $ | 3.96 |  |  |  | 449,399 |  |  | $ | 3.98 |
$5.61 - $6.30 |  |  |  | 390,350 |  |  |  | 8.47 |  |  | $ | 6.21 |  |  |  | 98,096 |  |  | $ | 5.97 |
$6.64 - $8.99 |  |  |  | 968,723 |  |  |  | 2.69 |  |  | $ | 8.00 |  |  |  | 366,606 |  |  | $ | 8.24 |
$42.80 |  |  |  | 5,030 |  |  |  | 1.37 |  |  | $ | 42.80 |  |  |  | 5,030 |  |  | $ | 42.80 |
$1.47 - $42.80 |  |  |  | 2,728,722 |  |  |  | 5.76 |  |  | $ | 5.21 |  |  |  | 1,398,665 |  |  | $ | 4.74 |
As of March 31, 2019, there was approximately $3,513 of total unrecognized compensation expense related to unvested stock options granted under the Plans. That expense is expected to be recognized over the weighted-average remaining vesting period of 1.3 years. The stock-based compensation expense for all stock options was $283 during the three months ended March 31, 2019. Restricted Stock Units RSU awards are granted subject to certain vesting requirements and other restrictions, including performance and market-based vesting criteria. The grant date fair value of the RSUs, which has been determined based upon the market value of the Company’s common stock on the grant date, is expensed over the vesting period of the RSUs. Unvested portions of RSUs issued to consultants are remeasured on an interim basis until vesting criteria is met. During the three months ended March 31, 2019, 135,000 RSUs with a fair market value of $851 were issued to certain employees; the RSUs vest in full on the third year anniversary of the grant date. A summary of the Company’s RSU activity and related information for the three months ended March 31, 2019 is as follows:
|  | Number of RSUs |  |  | Weighted Average Grant Date Fair Value |
RSUs unvested - January 1, 2019 |  |  | 1,275,680 |  |  | $ | 2.16 |
RSUs granted |  |  | 135,000 |  |  | $ | 6.30 |
RSUs vested |  |  | (34,090 | ) |  | $ | 2.20 |
RSUs cancelled/forfeit |  |  | - |  |  |  |  |
RSUs unvested at March 31, 2019 |  |  | 1,376,590 |  |  | $ | 2.56 |
As of March 31, 2019, the total unrecognized compensation expense related to unvested RSUs was approximately $1,900, which is expected to be recognized over a weighted-average period of 0.3 years, based on estimated and actual vesting schedules of the applicable RSUs. The stock-based compensation for RSUs during the three months ended March 31, 2019 was $430. Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders, underwriters, settlement agreements and other non-employees for services rendered or to be rendered in the future. A summary of warrant activity for the three months ended March 31, 2019 is as follows:
|  | Number of Shares Subject to Warrants Outstanding |  |  | Weighted Avg. Exercise Price |
Warrants outstanding - January 1, 2019 |  |  | 2,206,973 |  |  | $ | 1.91 |
Granted |  |  | - |  |  |  |  |
Exercised |  |  | (474,055 | ) |  |  | 1.79 |
Expired |  |  | - |  |  |  |  |
Warrants outstanding and exercisable - March 31, 2019 |  |  | 1,732,918 |  |  | $ | 1.94 |
Weighted average remaining contractual life of the outstanding warrants in years - March 31, 2019 |  |  | 2.79 |  |  |  |  |
A list of the warrants outstanding as of March 31, 2019 is included in the following table:
|  | Warrants Outstanding and Exercisable
|  |  |  | Warrants |  |  | Exercise |  |  | Expiration
Warrant Series |  | Issue Date |  | Outstanding |  |  | Price |  |  | Date
Lender warrants |  | 5/11/2015 |  |  | 125,000 |  |  | $ | 1.79 |  |  | 5/11/2025
Settlement warrants |  | 8/16/2016 |  |  | 40,000 |  |  | $ | 3.75 |  |  | 8/16/2021
PIPE investor and placement agent warrants |  | 12/27/2016 |  |  | 952,532 |  |  | $ | 1.79 |  |  | 12/27/2019
Lender warrants |  | 7/19/2017 |  |  | 615,386 |  |  | $ | 2.08 |  |  | 7/19/2024
|  |  |  |  | 1,732,918 |  |  | $ | 1.94 |  |  |
Subsidiary Stock-Based Transactions Mayfield Pharmaceuticals, Inc. In February 2019, the Company agreed to issue 1,000,000 shares of Mayfield’s common stock to Elle in connection with acquisition of certain drug candidate intellectual property and rights. Following the issuance of Mayfield common stock to Elle, and as of March 31, 2019, the Company owned 72% of the equity interests in Mayfield. Mayfield is a consolidated subsidiary; the Company reports the operating results of Mayfield and allocates the noncontrolling interests to the non-majority partners. Stock-Based Compensation Summary The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows:
|  | For the |  |  | For the |
|  | Three Months Ended |  |  | Three Months Ended |
|  | March 31, 2019 |  |  | March 31, 2018 |
Employees - selling, general and administrative |  | $ | 638 |  |  |  | 593 |
Directors - selling, general and administrative |  |  | 75 |  |  |  | 50 |
Consultants - selling, general and administrative |  |  | 75 |  |  |  | 108 |
Total |  | $ | 788 |  |  | $ | 751 |

X
- References No definition available. + Details
Name: | us-gaap_EquityAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration