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Stockholders' Equity
 9 Months Ended
Sep. 30, 2012
Stockholders' Equity [Abstract]  
Stockholders' Equity

8. Stockholders’ Equity

The following is a summary of the Company’s authorized and issued common and preferred stock as of September 30, 2012 and December 31, 2011:

                                 
    Authorized     Issued     Outstanding as of  
        September 30,
2012		     December 31,
2011		  

Common Stock, par $0.001

     300,000,000       137,055,380       137,055,380       134,968,394  

Series A Preferred Stock, par $0.001

     1,000       817       —         —    

Series B Preferred Stock, par $0.001

     1,000       750       —         —    

Series C Preferred Stock, par $0.001

     1,091       1,091       26       26  

Series D Preferred Stock, par $0.001

     1,966,292       1,966,292       —         —    

Common Stock

In June 2012, the Company entered into a sales agreement (the “Sales Agreement”) with an outside placement agent (the “Placement Agent”) to sell shares of its common stock with aggregate gross proceeds of up to $25.0 million from time to time, through an “at-the-market” equity offering program under which the Placement Agent will act as sales agent. Under the Sales Agreement, the Company will set the parameters for the sale of shares, including the number of shares to be issued, the time period during which sales are requested to be made, limitation on the number of shares that may be sold in any one trading day and any minimum price below which sales may not be made. The Sales Agreement provides that the Placement Agent will be entitled to compensation for its services in an amount equal to 3.0% of the gross proceeds from the sales of shares sold through the Placement Agent under the Sales Agreement. The Company has no obligation to sell any shares under the Sales Agreement, and may at any time suspend solicitation and offers under the Sales Agreement.

During the three and nine months ended September 30, 2012, the Company sold a total of 2,086,986 shares of common stock under the Sales Agreement. The sales were made at a weighted average price of $0.61 per share with net proceeds to the Company of $1.2 million.

In December 2011, the Company completed an underwritten public offering relating to the sale and issuance of 7,699,712 units to certain institutional investors, consisting of 7,699,712 shares of common stock and warrants to purchase an aggregate of up to 5,774,784 additional shares of common stock. These units, which were purchased for $0.5195 per unit, include the partial exercise of the underwriter’s overallotment option of 962,465 additional units at the public offering price. The units consist of one share of common stock and 0.75 of a warrant to purchase one share of common stock. The warrants have a term of five years and an exercise price of $0.65 per share. The Company may call the warrants if the closing bid price of the common stock has been at least $1.30 over 20 trading days and certain other conditions are met. The Company received net proceeds from the transaction of approximately $3.7 million, after deducting the underwriter’s discounts and other offering expenses payable by the Company. The Company valued the registered warrants issued in connection with the December 2011 financing as of the issuance date using the Black Scholes pricing model and recorded a current liability on the consolidated balance sheet. The warrants were subsequently revalued and the Company recorded the change in fair value of $635,000 and $751,000 to “Change in fair value of common stock warrants” on the condensed consolidated statement of operations for the three and nine months ended September 30, 2012, respectively. As of September 30, 2012, none of these warrants had been exercised.

In January 2011, the Company entered into investor purchase agreements with investors relating to the issuance and sale of (a) 21,130,400 shares of common stock, and (b) warrants to purchase a total of 10,565,200 shares of common stock with an exercise price of $1.40 per share, for an aggregate purchase price of approximately $24.3 million. The shares of common stock and warrants were sold in units, consisting of one share of common stock and a warrant to purchase 0.50 of a share of common stock, at a purchase price of $1.15 per unit. The Warrants have a five-year term from the date of issuance and are first exercisable commencing on the 180th day after the date of issuance. The Company may call the warrants if the closing bid price of the common stock has been at least $2.80 over 20 trading days and certain other conditions are met. The Company received net proceeds from the transaction of approximately $23.0 million, after deducting the placement agent’s fee and estimated offering expenses payable by the Company. The Company valued the registered warrants issued in connection with the January 2011 financing as of the issuance date using the Black Scholes pricing model and recorded a current liability on the condensed consolidated balance sheet. The warrants were subsequently revalued and the Company recorded the change in fair value of $488,000 and $277,000 to “Change in fair value of common stock warrants” on the condensed consolidated statement of operations for the three and nine months ended September 30, 2012, respectively. As of September 30, 2012, none of these warrants had been exercised.

The Company accounts for registered common stock warrants issued in July 2009, January 2011 and December 2011 under the authoritative guidance on accounting for derivative financial instruments indexed to, and potentially settled in, a company’s own stock, on the understanding that in compliance with applicable securities laws, the registered warrants require the issuance of registered securities upon exercise and do not sufficiently preclude an implied right to net cash settlement. The Company classifies registered warrants on the condensed consolidated balance sheet as a current liability which is revalued at each balance sheet date subsequent to the initial issuance. Determining the appropriate fair-value model and calculating the fair value of registered warrants requires considerable judgment, including estimating stock price volatility and expected warrant life. The Company develops its estimates based on historical data. A small change in the estimates used may have a relatively large change in the estimated valuation. The Company uses the Black-Scholes pricing model to value the registered warrants. Changes in the fair market value of the warrants are reflected in the condensed consolidated statement of operations as “Change in fair value of common stock warrants.”

Warrants

The following table summarizes the warrants outstanding as of September 30, 2012 and December 31, 2011:

 

                                             
    Exercise
Price		     Expiration Date   As of September 30, 2012     As of December 31, 2011  

Issued in Connection With:

       Number of
Warrants		     Common Stock
Warrant Liability		     Number of
Warrants		     Common Stock
Warrant Liability		  

December 2011 financing

   $ 0.65     December 6, 2016     5,774,784     $ 2,714,148       5,774,784     $ 1,963,427  

January 2011 financing

   $ 1.40     January 27, 2016     10,565,200       3,446,367       10,565,200       3,169,560  

July 2009 financing

   $ 3.38     July 1, 2014     333,333       2,433       333,333       43,332  

Warrants assumed in June 2009 Merger

   $
 		  0.05-
1.28		  
  		   March 24, 2013-
April 28, 2016		     4,920,527       —         4,920,527       —    

August 2007 consulting services

   $ 3.00     August 3, 2012     —         —         150,000       —    
               

 

 

    

 

 

    

 

 

    

 

 

  

Total

                 21,593,844     $ 6,162,948       21,743,844     $ 5,176,319  
               

 

 

    

 

 

    

 

 

    

 

 

  

In August 2012, warrants expired to purchase 150,000 shares of our common stock issued in connection with consulting services received in August 2007.

In October 2011, warrants expired to purchase 2,364,394 shares of our common stock issued in connection with our October 2006 registered offering with foreign investors.

Stock Options

The Company has one active stock and cash-based incentive plan, the Amended and Restated 2007 Omnibus Incentive Plan (the “Incentive Plan”), pursuant to which the Company has granted stock options and restricted stock awards to executive officers, directors and employees. The plan was adopted on March 31, 2007, approved by the stockholders on May 4, 2007, approved by the stockholders as amended on May 2, 2008, and approved by the stockholders as amended and restated on August 25, 2009 and May 14, 2010. On May 14, 2010 the stockholders approved to increase the aggregate number of shares available for grant under the Incentive Plan by 2,000,000 shares and to provide that the aggregate number of shares available for grant under the plan will automatically increase on January 1 of each year beginning in 2011 by a number of shares equal to the lesser of (1) 2,055,331 shares or (2) such lesser number of shares as the Board of Directors may determine. On January 1, 2012 the number of securities available for future issuance increased by 2,055,331 shares. At September 30, 2012, the Incentive Plan reserved 9,860,662 shares of common stock for issuance upon exercise of incentive awards granted and to be granted at future dates. At September 30, 2012, the Company had 1,800,414 shares of common stock available for future grants under the plan, and 240,000 shares of vested restricted stock and options to purchase 7,505,035 shares of common stock outstanding under the plan. The awards granted and available for future grant under the Incentive Plan generally vest over three years and have a maximum contractual term of ten years. The Incentive Plan terminates by its terms on March 31, 2017.

The Incentive Plan supersedes all of the Company’s previous stock option plans, which include the Amended 2000 Stock Option Plan and the VGX Equity Compensation Plan, under which the Company had options to purchase 1,456,434 and 7,577,516 shares of common stock outstanding, respectively, at September 30, 2012. The terms and conditions of the options outstanding under these plans remain unchanged.