XML 32 R11.htm IDEA: XBRL DOCUMENT

Stockholders' Equity

9 Months Ended

Sep. 30, 2019

Equity [Abstract]

Stockholders' Equity

NOTE 5 - Stockholders’ Equity

Common Stock

In January 2018, the Company issued 23,256 shares of common stock to directors valued at $1.72 per share, or $40,000.

In April 2018, the Company issued 176,744 shares of common stock to directors valued at $1.22 per share, or $216,264.

Between May 29, 2018 and June 1, 2018, we issued an aggregate of 1,000,000 shares of common stock upon conversion of the 1,000 shares of Series B Preferred Stock issued on April 6, 2018 (as described below under “Preferred Stock”).

In May 2018 the holder of our Note Payable converted $50,000 of the principal balance of the Note into 25,000 shares of common stock and exercised its warrant on a cashless basis resulting in the issuance of 4,800 shares of common stock.

On June 26, 2018, as part of its public offering of equity securities, the Company issued 2,040,000 shares of common stock and warrants to purchase a total of 717,000 shares of common stock (including the warrants described under “Preferred Stock” below that were issued on June 26, 2018). Each warrant has an initial exercise price of $1.08 per share. The net proceeds to the Company were approximately $2,068,900 after commissions and other offering expenses. The Company also issued Dawson James Securities, Inc., its placement agent in the public offering, a Unit Purchase Option to acquire up to 191,200 Units, at an exercise price of $1.25 per Unit, consisting of 191,200 shares of common stock and warrants to purchase up to 57,360 shares of common stock as compensation.

In January 2019, the Company issued a total of 200,000 shares of common stock to directors valued at $1.50 per share, or $300,000, with such shares to vest ratably over four quarterly installments, subject in each case to such director’s continuing service as a director.

Also in January 2019, the Company issued 88,431 shares of common stock upon the cashless exercise of Unit Purchase Options issued in our June 2018 public offering.

In January and February 2019, the Company issued a total of 70,230 shares of common stock upon the exercise of 70,230 warrants having an exercise price of $1.08 resulting in gross cash proceeds of $75,848.

In March 2019, the Company issued 1,500 shares of common stock to the Company’s Vice President of Business Development in connection with his achievement of performance milestones, with such shares vesting immediately.

Also in March 2019, the Company closed a public offering of equity securities in which it issued 1,400,800 shares of common stock and warrants to purchase a total of 420,240 shares of common stock resulting in net proceeds of approximately $1,679,230, after deducting placement agent commissions and other offering expenses payable by the Company.

In May 2019, the Company closed a private placement of equity securities in which it issued 400,000 shares of common stock and warrants to purchase a total of 220,000 shares of common stock resulting in net proceeds of approximately $515,000, after deducting placement agent commissions and other offering expenses payable by the Company.

On August 2, 2019, the Company closed a public offering of equity securities in which it issued 2,875,000 shares of common stock resulting in net proceeds of approximately $1,971,000, after deducting commissions and other offering expenses payable by the Company.

On August 15, 2019, the Company issued 25,000 shares of common stock to MHZCI, LLC, an investor relations firm engaged by the Company, as partial compensation for services to be rendered.

On September 13, 2019, Aegis Capital Corp. partially exercised its over-allotment option granted by the Company in the foregoing August 2019 public offering by purchasing an additional 200,000 shares of common stock, resulting in net proceeds of $148,800 after deducting commissions.

Deferred Compensation

In previous years and in the nine months ended September 30, 2019, the Company issued to various employees, directors, and contractors shares of the Company’s common stock, subject to restrictions, pursuant to the 2013 Equity Incentive Plan (the “2013 Plan”). Such shares were valued at the fair value at the date of issue. The fair value was expensed as compensation over the vesting period and recorded as an increase to stockholders’ equity. During the nine months ended September 30, 2019 and September 30, 2018, $228,000 and $213,449 respectively, of the unvested compensation cost related to these issues was recognized.

At September 30, 2019, there was $75,000 of unrecognized deferred compensation expense to be recognized over the remainder of the year.

Stock Options

In October 2018, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Plan by 900,000 shares of our common stock to a total of 1,650,000 shares.

In July 2019, at the Annual Meeting of Stockholders of the Company, the Company’s stockholders approved an amendment to the 2013 Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2013 Plan by 750,000 shares of our common stock to a total of 2,400,000 shares.

In August 2019, the Company terminated its 2011 Equity Incentive Plan.

As of September 30, 2019, an aggregate of 640,122 shares of common stock were reserved for issuance under the 2013 Plan.

During the nine months ended September 30, 2019, the Company granted options to purchase a total of 440,263 shares of common stock to 21 employees and 2 consultants with vesting periods ranging from immediately upon issuance to 4 years beginning January 2019.

During the nine months ended September 30, 2018, the Company granted options to purchase a total of 404,769 shares of common stock to 17 employees and 1 consultant with vesting periods ranging from immediately upon issuance to 4 years beginning March 2018.

The Company generally grants stock options to employees and directors at exercise prices equal to the fair market value of the Company’s stock on the dates of grant. Stock options are typically granted throughout the year and generally vest over four years of service and expire five years from the date of the award, unless otherwise specified. The Company recognizes compensation expense for the fair value of the stock options over the requisite service period for each stock option award.

Total share-based compensation expense included in the consolidated statements of operations for the nine months ended September 30, 2019 and 2018 is $628,768 and $783,167 of which $400,768 and $569,718 is related to stock options, respectively.

The fair value of share-based awards was estimated using the Black-Scholes model with the following weighted-average assumptions for the nine months ended September 30, 2019 and 2018:

Assumptions:

		2019				2018
Dividend yield			0.00				0.00
Risk-free interest rate			1.42-2.53	%			2.68-3.05	%
Expected volatility			105.2-106.1	%			111.4-137.3	%
Expected life (in years)			5				5-10

Option activity for the nine months ended September 30, 2019 and the year ended December 31, 2018 was as follows:

						Weighted Average				Weighted Average
						Exercise				Remaining				Aggregate
						Price				Contractual				Intrinsic
		Options				($)				Life (Yrs.)				Value ($)
Options outstanding at December 31, 2017			299,938				4.57				7.33
Granted			534,329				1.45				6.58
Exercised			-				-				-
Forfeited or cancelled			(8,000	)			4.59				-
Options outstanding at December 31, 2018			826,267				2.49				6.47
Granted			440,263				1.46				4.89
Exercised			-				-				-
Forfeited or cancelled			(15,500	)			1.76				-
Options outstanding September 30, 2019			1,251,030				2.14				5.41				-
Options expected to vest in the future as of September 30, 2019			446,582				1.66				5.07				-
Options exercisable at September 30, 2019			804,448				2.40				5.61				-
Options vested, exercisable, and options expected to vest at September 30, 2019			1,251,030				2.14				5.41				-

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of our common stock for those awards that have an exercise price currently below the $0.70 closing price of our common stock on September 30, 2019. None of the 2019 option grants have an exercise price currently below $0.70.

At September 30, 2019, there was $399,258 of unrecognized share-based compensation expense related to unvested share options with a weighted average remaining recognition period of 3.09 years.

Warrants

Warrant activity for the nine months ended September 30, 2019 and 2018 was as follows:

						Weighted Average				Weighted Average
						Exercise				Remaining
						Price				Contractual
		Warrants				($)				Life (Yrs.)
Warrants outstanding at December 31, 2017			1,645,500				3.97				4.11
Granted			1,607,000				1.30				4.64
Exercised			(24,000	)			2.00				-
Forfeited or cancelled			-				-				-
Warrants outstanding at September 30, 2018			3,228,500				2.65				4.14

Warrants outstanding at December 31, 2018			3,050,600				2.75				3.86
Granted			640,240				1.60				4.68
Exercised			(70,230	)			1.08				-
Forfeited or cancelled			-				-				-
Warrants outstanding at September 30, 2019			3,620,610				2.58				3.37