XML 29 R20.htm IDEA: XBRL DOCUMENT
v3.22.1

STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION | 3 Months Ended
--- | ---
Mar. 31, 2022
Equity [Abstract] |
STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION | NOTE 14. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Preferred Stock At March 31, 2022 and December 31, 2021, the Company had 5,000,000 shares of preferred stock, $0.001 par value, authorized and no shares of preferred stock issued and outstanding. Common Stock During the three months ended March 31, 2022, the Company issued 53,594 shares of common stock to Mark L. Baum, the Company’s Chief Executive Officer, upon the cashless exercise of options to purchase 125,000 shares at an exercise price of $2.40 per share. The Company withheld from Mr. Baum 36,014 shares as consideration for the cashless exercise and an additional 35,392 shares for payroll tax obligations totaling $295,000. 50,000 RSUs granted in February 2019 to Andrew R. Boll, the Company’s Chief Financial Officer, vested, and in February 2022, the Company issued 29,395 shares of common stock to Mr. Boll, net of 20,605 shares of common stock withheld for payroll tax withholdings totaling $162,000. 50,000 RSUs granted in February 2019 to John P. Saharek, the President of ImprimisRx, vested, and in February 2022, the Company issued 24,077 shares of common stock to Mr. Saharek, net of 25,923 shares of common stock withheld for payroll tax withholdings totaling $204,000. 35,000 RSUs granted in February 2019 vested, and in February 2022, the Company issued 20,298 shares of common stock, net of 14,702 shares of common stock withheld for payroll tax withholdings totaling $116,000. During the three months ended March 31, 2022, the Company issued 1,000 shares of common stock and received net proceeds of $4,000 upon the exercise of options to purchase 1,000 shares of common stock with exercise price of $3.95 per share. During the three months ended March 31, 2022, 9,644 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 applicable 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 which was subsequently amended on June 3, 2021 (as amended, the “2017 Plan” together with the 2007 Plan, the “Plans”). As of March 31, 2022, the 2017 Plan provides for the issuance of a maximum of 6,000,000 shares of the Company’s common stock. The purposes 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 of 1986, as amended, 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 2,229,399 shares available for future issuances under the 2017 Plan at March 31, 2022. Stock Options A summary of stock option activity under the Plans for the three months ended March 31, 2022 is as follows: SCHEDULE OF STOCK OPTION PLAN ACTIVITY
|  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |  |  | Aggregate Intrinsic Value |
Options outstanding – January 1, 2022 |  |  | 3,039,546 |  |  | $ | 5.52 |  |  |  |  |  |  |  |  |
Options granted |  |  | 170,250 |  |  | $ | 7.60 |  |  |  |  |  |  |  |  |
Options exercised |  |  | (126,000 | ) |  | $ | 2.41 |  |  |  |  |  |  |  |  |
Options cancelled/forfeited |  |  | - |  |  | $ | - |  |  |  |  |  |  |  |  |
Options outstanding – March 31, 2022 |  |  | 3,083,796 |  |  | $ | 5.76 |  |  |  | 5.01 |  |  | $ | 4,781,000 |
Options exercisable |  |  | 2,408,629 |  |  | $ | 5.29 |  |  |  | 4.61 |  |  | $ | 4,639,000 |
Options vested and expected to vest |  |  | 3,083,796 |  |  | $ | 5.76 |  |  |  | 5.01 |  |  | $ | 4,781,000 |
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 shares underlying options with an exercise price lower than the market price on March 31, 2022, based on the closing price of the Company’s common stock of $6.82 on that date. During the three months ended March 31, 2022, the Company granted stock options to certain employees and a consultant. 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 during the three months ended March 31, 2022 included the following vesting schedule: 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. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the Plans) 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. 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 using the Black-Scholes-Merton option pricing model with the following assumptions used for valuing options granted to employees: SCHEDULE OF FAIR VALUE ASSUMPTIONS
|  | 2022 |
Weighted-average fair value of options granted |  | $ | 4.65 |
Expected terms (in years) |  |  | 6.11 |
Expected volatility |  |  | 70 | %
Risk-free interest rate |  |  | 1.54 | %
Dividend yield |  |  | - |
The following table summarizes information about stock options outstanding and exercisable at March 31, 2022: SCHEDULE OF STOCK OPTION OUTSTANDING AND EXERCISABLE
|  |  | Options Outstanding |  |  | Options Exercisable |
Range of Exercise Prices |  |  | Number Outstanding |  |  | Weighted Average Remaining Contractual Life in Years |  |  | Weighted Average Exercise Price |  |  | Number Exercisable |  |  | Weighted Average Exercise Price |
$ | 1.47 - $1.73 |  |  |  | 312,887 |  |  |  | 5.70 |  |  | $ | 1.72 |  |  |  | 312,887 |  |  | $ | 1.72 |
$ | 2.23 - $2.60 |  |  |  | 313,068 |  |  |  | 4.84 |  |  | $ | 2.26 |  |  |  | 312,943 |  |  | $ | 2.26 |
$ | 2.76 - $3.50 |  |  |  | 25,500 |  |  |  | 7.95 |  |  | $ | 3.49 |  |  |  | 12,906 |  |  | $ | 3.48 |
$ | 3.95 |  |  |  | 370,000 |  |  |  | 4.00 |  |  | $ | 3.95 |  |  |  | 370,000 |  |  | $ | 3.95 |
$ | 4.08 - $6.30 |  |  |  | 578,850 |  |  |  | 5.71 |  |  | $ | 5.76 |  |  |  | 525,027 |  |  | $ | 5.85 |
$ | 6.81 - $7.37 |  |  |  | 388,995 |  |  |  | 6.27 |  |  | $ | 7.30 |  |  |  | 297,495 |  |  | $ | 7.30 |
$ | 7.52 - $7.79 |  |  |  | 221,823 |  |  |  | 8.33 |  |  | $ | 7.61 |  |  |  | 49,323 |  |  | $ | 7.66 |
$ | 7.87 |  |  |  | 600,000 |  |  |  | 3.33 |  |  | $ | 7.87 |  |  |  | 300,000 |  |  | $ | 7.87 |
$ | 7.89 - $8.98 |  |  |  | 92,673 |  |  |  | 7.47 |  |  | $ | 8.16 |  |  |  | 48,048 |  |  | $ | 8.22 |
$ | 8.99 |  |  |  | 180,000 |  |  |  | 1.09 |  |  | $ | 8.99 |  |  |  | 180,000 |  |  | $ | 8.99 |
$ | 1.47 - $8.99 |  |  |  | 3,083,796 |  |  |  | 5.01 |  |  | $ | 5.76 |  |  |  | 2,408,629 |  |  | $ | 5.29 |
As of March 31, 2022, there was approximately $1,806,000 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 4.89 years. The stock-based compensation for all stock options was $272,000 and $452,000 during the three months ended March 31, 2022 and 2021, respectively. The intrinsic value of options exercised during the three months ended March 31, 2022 was $745,000. Restricted Stock Units/Performance 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. A summary of the Company’s RSU activity (including performance stock units) and related information for the three months ended March 31, 2022 is as follows: SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY
|  | Number of RSUs |  |  | Weighted Average Grant Date Fair Value |
RSUs unvested - January 1, 2022 |  |  | 2,233,202 |  |  | $ | 6.78 |
RSUs granted |  |  | - |  |  | $ | - |
RSUs vested |  |  | (144,644 | ) |  | $ | 6.57 |
RSUs cancelled/forfeited |  |  | - |  |  |  | - |
RSUs unvested at March 31, 2022 |  |  | 2,088,558 |  |  | $ | 6.79 |
As of March 31, 2022, the total unrecognized compensation expense related to unvested RSUs was approximately $8,756,000, which is expected to be recognized over a weighted-average period of 1.33 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, 2022 and 2021 was $1,744,000 and $346,000, respectively. Warrants From time to time, the Company issues warrants to purchase shares of the Company’s common stock to investors, lenders, underwriters and other non-employees for services rendered or to be rendered in the future, or pursuant to settlement agreements. A summary of warrant activity for the three months ended March 31, 2022 is as follows: SCHEDULE OF WARRANTS ACTIVITY
|  | Number of Shares Subject to Warrants Outstanding |  |  | Weighted Average Exercise Price |
Warrants outstanding - January 1, 2022 |  |  | 373,847 |  |  | $ | 2.08 |
Granted |  |  | - |  |  |  |  |
Exercised |  |  | - |  |  |  |  |
Expired |  |  | - |  |  |  |  |
Warrants outstanding and exercisable - March 31, 2022 |  |  | 373,847 |  |  | $ | 2.08 |
Weighted average remaining contractual life of the outstanding warrants in years - March 31, 2022 |  |  | 2.3 |  |  |  |  |
Warrants outstanding and exercisable as of March 31, 2022 are as follows: SCHEDULE OF WARRANTS OUTSTANDING AND WARRANTS EXERCISABLE
Warrant Series |  | Issue Date |  | Warrants Outstanding |  |  | Exercise Price |  |  | Expiration Date
Lender warrants |  | 7/19/2017 |  |  | 373,847 |  |  | $ | 2.08 |  |  | 7/19/2024
Subsidiary Stock-Based Transactions The Company recognized $0 and $57,000 in stock-based compensation expense related to subsidiary stock options during the three months ended March 31, 2022 and 2021. Stock-Based Compensation Summary The Company recorded stock-based compensation related to equity instruments granted to employees, directors and consultants as follows: SCHEDULE OF STOCK BASED COMPENSATION GRANTED TO EMPLOYEES DIRECTORS CONSULTANTS
|  | For the Three Months Ended |
|  | March 31, |
|  | 2022 |  |  | 2021 |
Employees - selling, general and administrative |  | $ | 1,676,000 |  |  | $ | 755,000 |
Employees – research and development |  |  | 186,000 |  |  |  | - |
Directors - selling, general and administrative |  |  | 100,000 |  |  |  | 100,000 |
Consultants – research and development |  |  | 54,000 |  |  |  | - |
Total |  | $ | 2,016,000 |  |  | $ | 855,000 |

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 https://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 https://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration