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Shareholders' Equity

9 Months Ended

Sep. 30, 2020

Stockholders' Equity Note [Abstract]

Shareholders' Equity

11. SHAREHOLDERS’ EQUITY

Warrants

In December 2016, the Company completed a registered direct offering of 100,000 shares of common stock at a net gross price of $15.00 per share. Concurrently, the investors received warrants to purchase 100,000 shares of common stock of the Company at an exercise price of $20.05 per share, for a period of five years from the final closing date of June 21, 2017. The warrants include anti-dilution rights. 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. On September 29, 2020, the Company received proceeds of $565 thousand related to the exercise of warrants to purchase 50,000 shares of 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 $137 thousand and $73 thousand at September 30, 2020 and December 31, 2019, respectively

Pursuant to the original warrant agreement, as a result of common stock issuances made during the year ended December 31, 2018, the warrant exercise price was reduced from $20.50 to $11.30 per share. The warrant exercise price was further reduced to $5.25 as a result of the registered direct offering of 315,810 shares of common stock which was completed on October 2, 2020 (See Note 16 Subsequent Events).

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.

Total stock-based compensation expense related to stock options was $0 and $26 thousand for the nine months ended September 30, 2020 and 2019, respectively. As of September 30, 2020, all stock options had vested. During the nine months ended September 30, 2020 and 2019, no stock options were granted, exercised, or forfeited. During the nine months ended September 30, 2020 stock options to purchase 166 shares expired. Presented below is information about stock options outstanding and exercisable as of September 30, 2020 and December 31, 2019. All shares and prices per share have been adjusted for the Reverse Stock Split.

		September 30, 2020								December 31, 2019
		Shares				Price				Shares				Price

Stock options outstanding			31,367			$	64.78				31,533			$	66.04

Stock options exercisable			31,367			$	64.78				31,533			$	66.04

The following table summarizes information for stock options outstanding and for stock options exercisable at September 30, 2020:

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

	16,500			$	7.03			$	11.60			$	10.00				7.3				16,500			$	10.00
	10,622				90.00				124.80				106.20				3.6				10,622				106.20
	2,913				139.20				171.00				147.39				1.7				2,913				147.39
	1,332				226.20				251.40				232.48				3.2				1,332				232.48

	31,367			$	7.20			$	251.40			$	64.78				5.2				31,367			$	64.78

In January 2020, the Company granted 48,000 restricted shares to the Company’s Chief Executive Officer, of which 24,000 shares vest after one year and 24,000 vest after two years. In addition, the Company granted a total of 28,000 restricted shares to members of the Board, which vest on January 28, 2021. For the nine months ended September 30, 2020, the Company recognized $170 thousand in stock compensation expense related to these restricted stock grants. At September 30, 2020, the unrecognized expense related to the restricted stock grants was $202 thousand.