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SHAREHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

SHAREHOLDERS' EQUITY

8.	SHAREHOLDERS’ EQUITY

Preferred Stock

The Company’s articles of incorporation authorize the issuance of up to 100,000 shares of preferred stock, $0.01 par value. Shares of preferred stock may be issued with such dividend, liquidation, voting and conversion features as may be determined by the Board of Directors without shareholder approval. As discussed in Note 5, in February 2016 the Board of Directors approved the designation of 50,000 shares of Series A Convertible Preferred Stock in connection with the disposition of the Company’s mining segment.

Warrants

On December 21, 2016, the Company completed a registered direct offering of 1.0 million shares of common stock at a net price of $1.50 per share. Concurrently, the investors received warrants to purchase 1.0 million shares of Common Stock of the Company at an exercise price of $2.05 per share, subject to adjustment, for a period of five years from closing. The total net proceeds received by the Company was approximately $1.32 million. The fair value of the warrants upon issuance was $1.24 million, with the remaining $0.08 million being attributed to common stock. The warrants contain a dilutive issuance and other liability provisions which cause the warrants to be accounted for as a liability. Such warrant instruments are initially recorded as a liability and are accounted for at fair value with changes in fair value reported in earnings.

Stock Options

For the three months ended March 31, 2017 and 2016, total stock-based compensation expense related to stock options was $18,000 and $21,000 respectively. As of March 31, 2017, there was $62,000 of unrecognized expense related to unvested stock options, which will be recognized as stock-based compensation expense through January 2018. For the three months ended March 31, 2017, no stock options were granted, exercised, forfeited or expired. Presented below is information about stock options outstanding and exercisable as of March 31, 2017 and December 31, 2016:

		March 31, 2017								December 31, 2016
		Shares				Price ⁽¹⁾				Shares				Price ⁽¹⁾

Stock options outstanding			390,525			$	20.64				390,525			$	20.64

Stock options exercisable			381,640			$	20.79				376,084			$	20.97

⁽¹⁾

Represents the weighted average price.

The following table summarizes information for stock options outstanding and exercisable at March 31, 2017:

Options Outstanding																				Options Exercisable
Number				Exercise Price												Remaining				Number				Weighted
of				Range								Weighted				Contractual				of				Average
Shares				Low				High				Average				Term (years)				Shares				Exercise Price

	56,786			$	9.00			$	9.00			$	9.00				7.8				51,231			$	9.00
	49,504				12.48				12.48				12.48				6.3				49,504				12.48
	98,396				13.92				17.10				15.01				2.5				98,396				15.01
	185,839				22.62				30.24				29.35				1.0				182,509				29.48

	390,525			$	9.00			$	30.24			$	20.64				3.2				381,640			$	20.97

As of March 31, 2017, no shares are available for future grants under the Company’s stock option plans. Based upon the closing price for the Company’s common stock of $0.89 per share on March 31, 2017, there was no intrinsic value related to stock options outstanding as of March 31, 2017.

Restricted Stock Grants

In January 2015, the Board of Directors granted 340,711 shares of restricted stock under the 2012 Equity Plan to four officers of the Company. These shares originally vested annually over a period of three years. However, during 2015 vesting was accelerated for three of the four officers in connection with severance agreements for an aggregate of 240,711 shares. The remaining 100,000 shares vested for 33,333 shares in both January 2016 and January 2017 and the remaining shares will vest for 33,334 shares in January 2018. The fair market value of the 340,711 shares on the date of grant was approximately $511,000. On September 23, 2016, the Board of Directors granted restricted stock to each member of the Board for 58,500 shares per Board member for an aggregate grant of 351,000 shares. The vesting of 292,500 of such shares was accelerated in May 2017 in connection with the resignations of members of the Company’s Board of Directors. The closing price of the Company’s common stock on the grant date was $1.74, which is expected to result in an aggregate compensation charge of $611,000 as the stock vests. For the three months ended March 31, 2017 and 2016, total stock-based compensation expense related to restricted stock grants was $88,000 and $13,000 respectively. As of March 31, 2017, there was $84,000 of unrecognized expense related to unvested restricted stock grants, which will be recognized as stock-based compensation expense through January 2018.