NOTE 8 - STOCKHOLDERS’ EQUITY

SHELF REGISTRATION

In February 2017, we filed a shelf registration statement on Form S-3 with the SEC to sell, from time to time, in one or more offerings, up to $75,000 of our common stock, preferred stock, warrants, debt securities, subscription rights, and units. In April 2017 the shelf registration statement was declared effective by the SEC. Under this shelf registration statement, we completed an underwritten public offering in June 2017. In connection with the public offering, we issued 2,185,000 shares of common stock, including 285,000 shares of common stock pursuant to the exercise of the underwriters’ over-allotment option, at the public offering price of $13.50 per share. Net proceeds from the issuance of common stock was $27,800.

In April 2018, we filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”) to provide access to additional capital, if needed. Pursuant to the shelf registration statement, we may from time to time offer to sell in one or more offerings shares of our common stock or other securities having an aggregate value of up to $175,000 (which includes approximately $60,000 of unsold securities that were previously registered on our currently effective registration statements). The shelf registration statement relating to these securities became effective on April 16, 2018. As of December 31, 2018, there is $133,438 remaining available under the shelf registration statement.

In June 2018, we completed an underwritten public offering in which we sold an aggregate of 2,375,000 shares of our common stock at a public offering price of $17.50 per share. We realized net proceeds of approximately $38,900 after deducting underwriting discounts and estimated offering expenses.

SHARE REPURCHASE PROGRAM

Pursuant to our stock repurchase plan, we may repurchase up to 450,000 shares of our common stock. We have repurchased a total of 384,000 shares for approximately $5,000 over the life of the plan. Management will periodically assess repurchasing additional shares, depending on our cash position, market conditions, financial covenants and other factors. While the program remains in place, we did not repurchase any shares during 2018 or 2017.

STOCK AND STOCK OPTION PLANS

We have one active equity plan, the 2018 Incentive Award Plan (the “2018 Plan”). The 2018 Plan, approved by our shareholders, is intended to replace our 2009 Equity Incentive Plan, as amended (the “2009 Plan”), however, the terms and conditions of the 2009 Plan will continue to govern any outstanding awards granted thereunder.

Employees and consultants of the Company, its subsidiaries and affiliates, as well as members of our board, are eligible to receive awards under the 2018 Plan. The 2018 Plan provides for the grant of stock options, including incentive stock options (“ISOs”)and nonqualified stock options (“NQSOs”), stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance bonus awards, performance stock units awards, other stock or cash-based awards and dividend equivalents to eligible individuals. We generally grant stock options with exercise prices equal to the fair market value at the time of grant. The options generally vest over three to four years and are exercisable for a period of five to ten years beginning with the date of grant.

The number of shares available for issuance under 2018 Plan is equal to the sum of (i) 750,000 shares, (ii) any shares subject to issued and outstanding awards under the 2009 Plan as of the effective date of the 2018 Plan that expire, are cancelled or otherwise terminate following the effective date of the 2018 Plan. We have 1,639,000 options granted and outstanding pursuant to the 2018 Plan as of December 31, 2018.

We use the Black-Scholes option valuation model to value employee stock awards. We estimate stock price volatility based upon our historical volatility. Estimated option life and forfeiture rate assumptions are derived from historical data. For stock-based compensation awards with graded vesting, we recognize compensation expense using the straight-line amortization method.

Total compensation expense recognized in the Consolidated Statements of Comprehensive Loss for stock based awards was $1,687 and $593 for 2018 and 2017, respectively.

The following table summarizes the assumptions used to develop their fair value for the year ending December 31, 2018 and 2017:

	2018			2017
Risk-free interest rate		2.81	%		1.60	%
Expected volatility		.45			.41
Expected life in years		4.00			3.69
Dividend yield		-			-

As of December 31, 2018, we reserved shares of common stock for future issuance as follows:

Options outstanding			1,639,000
Options available for future grant			108,000
Shares reserved			1,747,000

The following table summarizes activity under all Plans during the year ended December 31, 2018 and 2017.

	2018					2017
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Shares			Price		Shares			Price
Outstanding at the beginning of the year		1,014,000		$	9.22		614,000		$	6.47
Granted		803,000			11.48		575,000			11.30
Exercised		(30,000	)		6.43		(80,000	)		5.55
Canceled		(148,000	)		13.21		(95,000	)		7.16
Outstanding at the end of the year		1,639,000		$	10.02		1,014,000		$	9.22
Options exercisable at the end of the year		585,000		$	8.59		247,000		$	6.34
Weighted average fair value of options granted during the year	$	7.80				$	3.63

The following table summarizes the outstanding and exercisable options and their exercise prices as of December 31, 2018:

		Options Outstanding						Options Exercisable
Range of Exercise Prices		Number Outstanding		Weighted-Average Remaining Contractual Life (Years)		Weighted-Average Exercise Price		Number Exercisable and Vested		Weighted-Average Exercise Price

$	1.68 –8.81		529,000		1.95	$	4.58		303,000	$	6.18
	8.82 – 13.39		595,000		3.31		10.88		223,000		10.36
	13.40–16.27		515,000		3.95		14.62		59,000		14.27
$	1.68–16.27		1,639,000		2.67	$	10.02		585,000	$	8.59

The aggregate intrinsic value of options outstanding and options exercisable is $748 and $11, respectively, at December 31, 2018.