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Shareholders' Equity

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Shareholders' Equity

10. SHAREHOLDERS’ EQUITY

At-the-Market Offering

On January 5, 2018, we entered into a common stock sales agreement with a financial institution pursuant to which we may offer and sell, through the sales agent, common stock representing an aggregate offering price of up to $2.5 million through an at-the-market continuous offering program. During the three months ended September 30, 2018, we issued 357,680 shares of common stock at an average price of $1.52 per share for total proceeds of approximately $0.5 million. Since the beginning of the program in January 2018 through September 30, 2018, we have issued 1,288,537 shares of common stock at an average price of $1.41 for total net proceeds after offering expenses of approximately $1.8 million, leaving $0.7 million available to be issued under the at-the-market offering program.

Warrants

On December 21, 2016, the Company completed a registered direct offering of 1,000,000 shares of common stock at a gross price of $1.50 per share. Concurrently, the investors received warrants to purchase 1,000,000 shares of common stock of the Company at an exercise price of $2.05 per share for a period of five years from closing. The total net proceeds received by the Company were approximately $1.32 million. The fair value of the warrants upon issuance was $1.24 million, with the remaining $80 thousand 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. As of September 30, 2018, and December 31, 2017, the Company had a warrant liability of $722 thousand and $1.2 million, respectively. As a result of common stock issuances made during the nine months ended September 30, 2018, the warrant exercise price was reduced from $2.05 to $1.13 per share pursuant to the original warrant agreement.

Stock Options

From time to time, the Company grants stock options to directors, executive officers, employees and contractors of the Company under its Amended and Restated 2012 Equity and Performance Incentive Plan (the “2012 Plan”). Stock options, when exercised, are settled through the payment of the exercise price in exchange for new shares of stock underlying the option. These awards typically expire ten years from the grant date.

For the nine months ended September 30, 2018 and 2017, no stock options were granted, exercised, forfeited and 69,225 options expired. As of September 30, 2018, there was $58 thousand of unrecognized expense related to unvested stock options that were previously granted, which will be recognized as stock-based compensation expense through November 2019. Presented below is information about stock options outstanding and exercisable as of September 30, 2018 and December 31, 2017:

		September 30, 2018								December 31, 2017
		Shares				Price ⁽¹⁾				Shares				Price ⁽¹⁾

Stock options outstanding			320,462			$	6.52				389,687			$	8.05

Stock options exercisable			210,462			$	9.32				274,132			$	10.79

⁽¹⁾

Represents the weighted average price.

The following table summarizes information for stock options outstanding and exercisable at September 30, 2018:

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

	56,786			$	9.00			$	9.00			$	9.00				6.3				56,786			$	9.00
	49,504				12.48				12.48				12.48				4.8				49,504				12.48
	29,171				13.92				17.10				14.74				3.7				29,171				14.74
	15,001				22.62				30.24				24.03				4.8				15,001				24.03
	60,000				0.72				0.72				0.72				8.9				60,000				0.72
	110,000				1.16				1.16				1.16				9.1				-				-

	320,462			$	0.72			$	30.24			$	6.52				7.2				210,462			$	9.32

Common Stock Grants

In May 2018, the Company granted 485,168 unrestricted shares of stock to Company employees and accordingly recorded $596 thousand of stock-based compensation expense. For the nine months ended September 30, 2018 and 2017, total stock-based compensation expense related to stock grants was $623 thousand and $289 thousand, respectively. As of September 30, 2018, there was no unrecognized expense related to common stock grants.