XML 95 R19.htm IDEA: XBRL DOCUMENT v3.19.2
Shareholders' Equity
 12 Months Ended
Dec. 31, 2018
Stockholders' Equity Note [Abstract]  
Shareholders' Equity

13. SHAREHOLDERS’ EQUITY

 

At-the-Market Offering

 

In January 2018, the Company entered into a common stock sales agreement with a financial institution pursuant to which the Company could 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 year ended December 31, 2018, the Company issued 1,288,537 shares of common stock at an average price of $1.41 for total net proceeds before offering expenses of approximately $1.8 million. Offering expenses, including broker fees and legal costs related to the at-the-market offering totaled $151 thousand. In January 2019, the Company terminated the at-the-market offering.

 

 

Warrants

 

In December 2016, the Company completed a registered direct offering of 1,000,000 shares of common stock at a net 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, subject to adjustment, 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 $0.08 million being attributed to common stock. The warrants contain a dilutive issuance and other provisions that 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. At December 31, 2018 and 2017, the Company had a warrant liability of $0.4 million and $1.2 million, respectively. As a result of common stock issuances made during the year ended December 31, 2018, the warrant exercise price was reduced from $2.05 to $1.13 per share pursuant to the original warrant agreement.

 

Stock Option Plans

 

In December 2001, the Board of Directors adopted, and the Company’s shareholders subsequently approved, the U.S. Energy Corp. 2001 Incentive Stock Option Plan (the “2001 ISOP”). The 2001 ISOP, as subsequently amended and approved by the Company’s shareholders, reserved for issuance 25% of the Company’s shares of common stock issued and outstanding at any time. The 2001 ISOP had a term of 10 years which expired in December 2011. Accordingly, no options may be granted under the 2001 ISOP. During 2018, all of the remaining stock options outstanding under the 2001 ISOP expired.

 

In June 2012, the Board of Directors adopted the U.S. Energy Corp. 2012 Equity and Performance Incentive Plan (the “2012 Equity Plan”). The 2012 Equity Plan, as amended and approved by shareholders in June 2015, and as further amended and approved by shareholders in July 2017, reserves for issuance to the Company’s employees and directors a total of 1,533,333 shares of the Company’s common stock. The 2012 Equity Plan has a term of 10 years and expires in June 2022. As of December 31, 2018, options for a total of 292,350 shares are outstanding under the 2012 Equity Plan and expire on various dates through January 2025.

 

Director and Advisory Board Members Option Plan. In June 2008, the Board of Directors adopted, and the shareholders subsequently approved, the 2008 Stock Option Plan for U.S. Energy Corp. Independent Directors and Advisory Board Members (the “2008 Director SOP”). The 2008 Director SOP reserved for issuance 1.0% of the Company’s shares of common stock issued and outstanding at any time. The 2008 Director SOP had an original term of 10 years. However, as a result of shareholder approval in June 2015 of an amendment to the 2012 Equity Plan, no additional options may be granted under the 2008 Director SOP. As of December 31, 2018, options for a total of 28,112 shares were outstanding under the 2008 Director SOP and expire on various dates through September 2024.

 

A summary of the combined activity in the 2001 ISOP, the 2012 Equity Plan, and the 2008 Director SOP for the years ended December 31, 2018 and 2017 is as follows:

 

   2018   2017 
   Shares   Price (1)   Shares   Price (1) 
                 
Outstanding, beginning of year   389,687   $8.05    390,525   $20.64 
Granted   -    -    170,000    1.00 
Forfeited   -    -    -    - 
Expired   (69,225)   15.12    (170,838)   29.82 
Exercised   -    -    -    - 
                     
Outstanding, end of year   320,462   $6.52    389,687   $8.05 
                     
Exercisable, end of year   265,462   $7.63    274,132   $10.79 

 

  (1) Represents the weighted average price.

 

No stock options were exercised during the years ended December 31, 2018 or 2017.

 

 

The following table summarizes information for stock options outstanding and for stock options exercisable at December 31, 2018:

 

Options Outstanding   Options Exercisable 
   Exercise Price          
Number   Range      Remaining   Number   Weighted 

of

Shares

   Low   High  

Weighted

Average

  

Contractual

Term (years)

  

of

Shares

  

Average

Exercise Price

 
                          
 170,000   $0.72   $1.16   $1.00    8.8    115,000   $0.93 
 106,290    9.00    12.48    10.62    5.3    106,290    10.62 
 29,171    13.92    17.10    14.74    3.4    29,171    14.74 
 15,001    22.62    30.24    24.03    4.5    15,001    24.03 
                                 
 320,462   $0.72   $30.24   $6.52    6.9    265,462   $7.63 

 

For the years ended December 31, 2018 and 2017, total stock-based compensation expense associated with stock options was $0.1 million and $0.3 million, respectively. As of December 31, 2018, there was $0.1 million of unrecognized expense related to unvested stock options, which will be recognized as stock-based compensation expense through November 2019. In estimating the fair value of stock options issued in 2017, the Company used the Black-Scholes option-pricing model with the following assumptions:

 

     
Expected lives (in years)   10.0 
Risk-free interest rate   2.33%
Expected volatility   80.0%
Expected dividend yield   0.0%

 

In May 2018, the Company granted 485,168 unrestricted shares of common stock to Company employees and recorded $0.6 million of stock-based compensation expense. For the year ended December 31, 2018 and 2017, total stock-based compensation related to stock grants was $0.6 million and $0.3 million, respectively. As of December 31, 2018, there was no unrecognized expense related to common stock grants.