6. Common Shares

Public Offering, August 2016

During August 2016, we closed a public offering of 12,362,500 units (the “Units”), which included 1,612,500 Units issued pursuant to the full exercise of the underwriters’ over-allotment option, for net proceeds of $15,883 (the “2016 Offering”). Each Unit consisted of one common share in the capital of the Company (“Common Share”) and one-half of one Common Share purchase warrant (each full warrant, a “2016 Warrant”). A total of 6,514,625 2016 Warrants were issued, including 333,375 broker warrants issued to the underwriters. Each 2016 Warrant entitles the holder thereof to purchase one Common Share at a price of $1.92 per Common Share (subject to adjustment in certain circumstances) and is exercisable for a period of 36 months from the closing of the 2016 Offering. The 2016 Warrants, which are classified as equity, had a fair value of $3,320 at the time of the 2016 Offering. The fair value of 2016 Warrants was estimated at the grant date using the Black-Scholes option pricing model using the following assumptions: 1) expected volatility of 89%, 2) risk-free rate of 0.86%, 3) expected life of 3 years, and 4) stock price on the issue date of $1.13 per Common Share.

Other Share Issuances

During the years ended December 31, 2017, 2016 and 2015, we issued 1,625,399; 2,540,546 and 493,345 common shares, respectively, in connection with the vesting of RSUs and/or stock option exercises.

Warrants

Warrant activity is summarized in the following table:


		Weighted		Weighted
		average		average
	Warrants	exercise price		remaining life
	outstanding	per share		(yrs.)	Intrinsic value
As of December 31, 2014	15,219,802	$	5.00	0.8	$	—
Expired (issued as part of equity financing completed in 2010)	(15,219,802)
As of December 31, 2015	—		—	—		—
Issued	6,514,625
As of December 31, 2016	6,514,625		1.92	2.6		—
As of December 31, 2017	6,514,625	$	1.92	1.6	$	—

Stock-Based Compensation

Under our Stock Option Plan (the “Plan”) and our Long-Term Equity Incentive Plan (the “LTIP”), we may grant options and/or RSUs or restricted stock awards to our directors, officers, employees and consultants. The combined maximum number of our Common Shares that may be reserved for issuance under the Plan and the LTIP is a variable number equal to 10% of the issued and outstanding Common Shares on a non-diluted basis. Options and RSUs under the Plan and LTIP, respectively, are granted from time to time at the discretion of the Board, with vesting periods and other terms as determined by the Board. Stock-based compensation expense for the years ended December 31, 2017, 2016 and 2015 is as follows:


		Year Ended December 31,
	2017		2016		2015
Stock options	$	36	$	23	$	8
Restricted stock units		838		622		809
	$	874	$	645	$	817

As of December 31, 2017, stock options and RSUs had unrecognized compensation expense of $10 and $649, respectively, which is expected to be recognized over a weighted average period of 0.99 and 1.3 years, respectively.

Stock Options

A summary of option activity under the Plan as of December 31, 2017, 2016 and 2016 and changes during the period then ended is set forth in the following table:


		Weighted average		Weighted average	Aggregate
	Number of	exercise price		remaining	intrinsic
	options	per option		contractual term	value
Outstanding - December 31, 2014	2,257,500	$	1.60	3.02	$	—
Outstanding - December 31, 2015	2,257,500		1.60	2.02		—
Granted	50,000		1.11			—
Exercised	(65,500)		0.39			42
Expired	(697,500)		2.91			—
Outstanding - December 31, 2016	1,544,500	$	1.05	1.79	$	626
Expired	(400,000)		2.87
Outstanding - December 31, 2017	1,144,500	$	0.42	1.15	$	346

Exercisable - December 31, 2017	898,250	$	0.43	1.19	$	262

A summary of our unvested stock options as of December 31, 2017, 2016 and 2015 and changes during the period then ended is set forth in the following table:


				Weighted
		Weighted		average
		average		remaining
		grant-date		amortization
	Number of	fair value		period
	options	per option		(Years)
Unvested - December 31, 2014	246,250	$	0.22	3.99
Unvested - December 31, 2015	246,250		0.22	3.00
Granted	50,000		0.69
Unvested - December 31, 2016	296,250	$	0.49	1.23
Vested	(50,000)		0.69
Unvested - December 31, 2017	246,250	$	0.22	0.99

No stock options were granted for the years ended December 31, 2017 and 2015. The fair value of stock options granted during the years ended December 31, 2016 to employees, directors and consultants was estimated at the grant date using the Black-Scholes option pricing model using the following assumptions:



	2016
Expected volatility	77.68	%
Risk-free interest rate	1.12	%
Expected life (years)	5
Dividend yield	N/A
Forfeiture assumption	0	%

Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Expected price volatility is based on the historical volatility of our common shares. Changes in the subjective input assumptions can materially affect the fair value estimate. The expected term of the options granted represents the period of time that the options granted are expected to be outstanding. The risk-free rate for the periods within the contractual term of the option is based on the U.S. Treasury yield curve in effect at the date of grant.

Restricted Stock Units

The following table summarizes the RSU activity under the LTIP as of December 31, 2017, 2016 and 2015 and changes during the years then ended:


		Weighted average
	Number	grant-date fair
	of units	value per unit
Unvested - December 31, 2014	3,692,829	$	0.74
Cancelled/forfeited	(841,038)		0.73
Vested	(493,345)		1.62
Granted	1,727,000		0.27
Unvested - December 31, 2015	4,085,446	$	0.44
Vested	(2,475,046)		0.32
Granted	1,057,987		0.84
Unvested - December 31, 2016	2,668,387	$	0.49
Cancelled/forfeited	(441,084)		0.34
Vested, net of shares withheld	(1,625,399)		0.38
Granted	966,003		0.82
Unvested - December 31, 2017	1,567,907	$	0.85

During the year ended December 31, 2017, the Company withheld shares equivalent to the employee withholding tax obligation which resulted from RSUs vesting in the period. Shares withheld are considered cancelled/forfeited.

A portion of the RSU awards vest on a fixed future date provided the recipient continues to be affiliated with Vista on that date. Other RSU awards vest subject to certain performance and market criteria, including the accomplishment of certain corporate objectives and the Company’s share price performance. The vesting period for all RSUs is at least one year.

Weighted Average Common Shares


	At December 31,
	2017	2016	2015
Basic common shares	98,627,255	89,064,260	82,571,182
Effect of dilutive stock-based awards	—	—	1,183,898
Diluted common shares	98,627,255	89,064,260	83,755,080

Stock options to purchase 1,144,500 common shares, unvested RSUs representing 1,567,907 common shares and 6,514,625 warrants were outstanding at December 31, 2017 but were not included in the computation of diluted weighted average common shares outstanding because their effect would have been anti-dilutive. Stock options to purchase 1,544,500 common shares, unvested RSUs representing 2,668,387 common shares and 6,514,625 warrants were outstanding at December 31, 2016 but were not included in the computation of diluted weighted average common shares outstanding because their effect would have been anti-dilutive. Stock options to purchase 2,257,500 common shares and unvested RSUs representing 2,901,548 common shares were outstanding at December 31, 2015 but were not included in the computation of diluted weighted average common shares outstanding because their effect would have been anti-dilutive.

During November 2017, the Company entered into an At-the-Market offering agreement (the “ATM Agreement”) with H. C. Wainwright & Co., LLC (“Wainwright”), under which the Company may, but is not obligated to, issue and sell shares of the Company’s common stock through Wainwright as sales manager in an At-the-Market offering under a prospectus supplement for aggregate sales proceeds of up to $10,000 (the “ATM Program”). The ATM Agreement will remain in full force and effect until the earlier of August 31, 2020, or the date that the ATM Agreement is terminated in accordance with the terms therein. Offers or sales of common shares under the ATM Program will be made only in the United States and no offers or sales of common shares under the Agreement will be made in Canada. The common stock will be distributed At-the-Market prices prevailing at the time of sale. As a result, prices of the common stock sold under the ATM Program may vary during the period of distribution. The ATM Agreement provides that Wainwright will be entitled to compensation for its services at a commission rate of 2.0% of the gross sales price per share of common stock sold. The Company reimbursed certain legal expenses of Wainwright totaling $50 and incurred additional accounting, legal, and regulatory costs of approximately $156 in connection with establishing the ATM Program. Such costs have been expensed as incurred during 2017. At December 31, 2017 no offers or sales had been made under the ATM Program.