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Shareholders' Equity

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Shareholders' Equity

10. 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 three months ended March 31, 2018, the Company issued 640,163 shares of common stock at an average price of $1.46 for total net proceeds before offering expenses of approximately $935 thousand. Offering expenses, including broker fees and legal costs related to the at-the-market offering totaled $59 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 $80 thousand being attributed to common stock. The warrants have been classified as liabilities due to features in the warrant agreement that give the warrant holder an option to require the Company to redeem the warrant at a calculated fair value in the event of a “Fundamental Transaction,” as defined in the warrant agreement. The fair value of the warrants was $417 thousand and $425 thousand at March 31, 2019 and December 31, 2018, respectively.

Pursuant to the warrant agreement, the warrant exercise price was reduced from $2.05 to $1.13 per share as a result of common stock issuances made during the three-month period ended March 31, 2018.

Stock Options

From time to time, the Company may grant stock options under its incentive plan covering shares of common stock to employees of the Company. 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 both the three months ended March 31, 2019 and 2018, total stock-based compensation expense related to stock options was $13 thousand. As of March 31, 2019, there was $32 thousand of unrecognized expense related to unvested stock options, which will be recognized as stock-based compensation expense through November 2019. For the three months ended March 31, 2019 and 2018, no stock options were granted, exercised, forfeited or expired. Presented below is information about stock options outstanding and exercisable as of March 31, 2019 and December 31, 2018:

		March 31, 2019								December 31, 2018
		Shares				Price ⁽¹⁾				Shares				Price ⁽¹⁾

Stock options outstanding			320,462			$	6.52				320,462			$	6.52

Stock options exercisable			279,212			$	7.31				265,462			$	7.63

⁽¹⁾

Represents the weighted average price.

The following table summarizes information for stock options outstanding and for stock options exercisable at March 31, 2019:

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				8.5				128750			$	0.95
	106,290				9.00				12.48				10.62				5.1				106,290				10.62
	29,171				13.92				17.10				14.74				3.2				29,171				14.74
	15,001				22.62				30.24				24.03				4.3				15,001				24.03

	320,462			$	0.72			$	30.24			$	6.52				6.7				279,212			$	7.31