XML 135 R21.htm IDEA: XBRL DOCUMENT
v3.20.1

Note 13 - Capital Stock | 12 Months Ended
--- | ---
Dec. 31, 2019
Notes to Financial Statements |
Shareholders' Equity and Share-based Payments [Text Block] |
13. |  | Capital Stock and Stock-Based Compensation
Common Stock On February 5, 2008, the Company’s Board of Directors adopted a Shareholder Rights Plan and declared a dividend distribution of one preferred stock purchase right for each outstanding share of the Company’s common stock to shareholders of record as of the close of business on February 6, 2008. These rights were not initially exercisable and would trade with the shares of the Company’s common stock. The rights would become exercisable under various conditions according to the terms of the plan. The Shareholder Rights Plan expired, with no rights having become exercisable, in accordance with its terms on the close of business on February 6, 2018. Preferred Stock The Company’s Board of Directors has the authority to issue up to 5.0 million shares of preferred stock and to determine the price privileges and other terms of the shares. The Board of Directors may exercise this authority without any further approval of stockholders. As of December 31, 2019, the Company had no preferred stock issued or outstanding. Employee Stock Purchase Plan (as amended, the ESPP) In 2000, the Company approved the ESPP. Under this ESPP, participating employees can authorize the Company to withhold a portion of their base pay during consecutive six -month payment periods for the purchase of shares of the Company’s common stock. At the conclusion of the period, participating employees can purchase shares of the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock at the beginning or end of the period. Shares are issued under the ESPP for the six -month periods ending June 30 and December 31. On May 16, 2019, the stockholders of the Company approved an increase of 350,000 shares of common stock in the number of shares available for issuance under the ESPP. Following such amendment, 1,400,000 shares of common stock are authorized for issuance, of which 1,081,404 shares were issued as of December 31, 2019. There were 190,642 and 89,308 shares issued under the ESPP during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there were 318,596 shares available for issuance under the plan. Third Amended and Restated 2000 Stock Option and Incentive Plan (as amended, the Third A&R Plan) On May 25, 2011, the stockholders of the company approved the Third A&R Plan, which such plan currently authorizes the grant of stock options and stock-based awards to officers, employees, non-employee directors and other key persons of the Company and its subsidiaries. The Third Amendment to the Third A&R Plan (the Amendment) was adopted by the Board of Directors on April 2, 2018. Such Amendment was approved by the stockholders at the Company’s 2018 Annual Meeting of Stockholders. Pursuant to the Amendment, the aggregate number of shares authorized for issuance under the Third A&R Plan was increased by 3,400,000 shares to 20,908,929. Restricted Stock Units with a Market Condition (the Market Condition RSUs) On August 3, 2015, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2015 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of these 2015 Market Condition RSUs was cliff-based and linked to the achievement of a relative total shareholder return of the Company’s common stock from August 3, 2015 to the earlier of (i) August 3, 2018 or (ii) upon a change of control (measured relative to the Russell 3000 index and based on the 20 -day trading average price before each such date). As of August 3, 2018, certain of the target total shareholder returns were achieved, and as a result, 69,667 of the 2015 Market Condition RSUs vested. The remaining 2015 Market Condition RSUs did not vest and were canceled. In 2018, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2018 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of the 2018 Market Condition RSUs is based on a graded-vesting schedule ( one third at the end of each year for three years) and linked to the achievement of a relative total shareholder return of the Company’s common stock from May 24, 2018 to the earlier of (i) May 24, 2019 or (ii) upon a change of control (measured relative to the NASDAQ Biotechnology index and based on the 20 -day trading average price before each such date). In 2019, the Compensation Committee of the Board of Directors of the Company approved and granted deferred stock awards of Market Condition RSUs (the 2019 Market Condition RSUs) to certain members of the Company’s management team under the Third A&R Plan. The vesting of the 2019 Market Condition RSUs is based on a graded-vesting schedule ( one third at the end of each year for three years) and linked to the achievement of a relative total shareholder return of the Company’s common stock from the 2019 Market Condition RSUs grant date to the earlier of (i) the anniversary date of the grant or (ii) upon a change of control (measured relative to the NASDAQ Biotechnology index and based on the 20 -day trading average price before each such date). As of December 31, 2019, the target number of these restricted stock units that may be earned is 529,491 shares; the maximum amount is 150% of the target number. Stock-Based Payment Awards The Company accounts for stock-based payment awards in accordance with the provisions of FASB ASC 718, which requires it to recognize compensation expense for all stock-based payment awards made to employees and directors including stock options, restricted stock units, Market Condition RSUs and employee stock purchases related to the ESPP. The Company has elected as an accounting policy to account for forfeitures for service-based awards as they occur, with no adjustment for estimated forfeitures. Stock option and restricted stock unit activity under the Company’s Third A&R Plan for the years ended December 31, 2018 and 2019 were as follows:
|  | Stock Options |  | Restricted Stock Units |  | Market Condition RSU's
|  | Stock |  | Weighted |  | Restricted |  |  |  | Market |  |
|  | Options |  | Average |  | Stock Units |  | Grant Date |  | Condition RSU's |  | Grant Date
|  | Outstanding |  | Exercise Price |  | Outstanding |  | Fair Value |  | Outstanding |  | Fair Value
Balance at December 31, 2017 |  |  | 3,780,244 |  |  | $ | 3.95 |  |  |  | 1,796,927 |  |  | $ | 2.69 |  |  |  | 164,127 |  |  | $ | 4.81 |
Granted |  |  | 104,585 |  |  |  | 4.48 |  |  |  | 639,126 |  |  |  | 4.31 |  |  |  | 156,944 |  |  |  | 4.19 |
Exercised |  |  | (1,696,255 | ) |  |  | 3.50 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Vested (RSUs) |  |  | - |  |  |  | - |  |  |  | (845,326 | ) |  |  | 2.88 |  |  |  | (69,667 | ) |  |  | 4.81 |
Cancelled / forfeited |  |  | (231,842 | ) |  |  | 4.96 |  |  |  | (356,965 | ) |  |  | 2.84 |  |  |  | (134,460 | ) |  |  | 4.63 |
Balance at December 31, 2018 |  |  | 1,956,732 |  |  |  | 4.25 |  |  |  | 1,233,762 |  |  |  | 3.36 |  |  |  | 116,944 |  |  |  | 4.19 |
Granted |  |  | 943,424 |  |  |  | 3.28 |  |  |  | 1,652,720 |  |  |  | 2.31 |  |  |  | 605,005 |  |  |  | 1.98 |
Exercised |  |  | (3,750 | ) |  |  | 2.98 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Vested (RSUs) |  |  | - |  |  |  | - |  |  |  | (813,762 | ) |  |  | 3.29 |  |  |  | (3,778 | ) |  |  | 4.19 |
Cancelled / forfeited |  |  | (630,284 | ) |  |  | 3.96 |  |  |  | (482,270 | ) |  |  | 3.42 |  |  |  | (188,680 | ) |  |  | 4.18 |
Balance at December 31, 2019 |  |  | 2,266,122 |  |  | $ | 3.93 |  |  |  | 1,590,450 |  |  | $ | 2.27 |  |  |  | 529,491 |  |  | $ | 1.67 |
Earnings per share Basic earnings per share is based upon net income divided by the number of weighted average common shares outstanding during the period. The calculation of diluted earnings per share assumes conversion of stock options, restricted stock units and Market Condition RSUs into common stock using the treasury method. The weighted average number of shares used to compute basic and diluted earnings per share consists of the following:
|  | Year Ended December 31,
|  | 2019 |  | 2018
Basic |  |  | 37,813,580 |  |  |  | 36,453,126 |
Dillutive effect of equity awards |  |  | - |  |  |  | - |
Diluted |  |  | 37,813,580 |  |  |  | 36,453,126 |
Excluded from the shares used in calculating the diluted earnings per common share in the above table are options, restricted stock units and Market Condition RSUs of approximately 4,386,063 and 3,307,438 shares of common stock for the years ended December 31, 2019 and 2018, respectively, as the impact of these shares would be anti-dilutive. The Company’s policy is to issue stock available from its registered but unissued stock pool through its transfer agent to satisfy stock option exercises and vesting of the restricted stock units. The following table summarizes information concerning currently outstanding and exercisable options as of December 31, 2019 (Aggregate Intrinsic Value, in thousands):
|  | Options Outstanding |  | Options Exercisable
|  |  |  | Weighted |  |  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  | Average |  | Weighted |  |  |  |  |  | Average |  | Weighted |  |
Range of |  | Number |  | Remaining |  | Average |  | Aggregate |  | Shares |  | Remaining |  | Average |  | Aggregate
Exercise |  | Outstanding at |  | Contractual Life |  | Exercise |  | Intrinsic |  | Exercisable at |  | Contractual Life |  | Exercise |  | Intrinsic
Price |  | Dec. 31, 2019 |  | in Years |  | Price |  | Value |  | Dec. 31, 2019 |  | in Years |  | Price |  | Value
$1.78 | - | 2.59 |  |  | 234,399 |  |  |  | 6.48 |  |  | $ | 2.14 |  |  | $ | 213 |  |  |  | 94,069 |  |  |  | 1.94 |  |  | $ | 2.57 |  |  | $ | 45 |
2.60 | - | 2.94 |  |  | 208,414 |  |  |  | 9.52 |  |  |  | 2.84 |  |  |  | 44 |  |  |  | 10,000 |  |  |  | 7.25 |  |  |  | 2.60 |  |  |  | 5 |
2.95 | - | 3.49 |  |  | 264,571 |  |  |  | 8.00 |  |  |  | 3.23 |  |  |  | - |  |  |  | 148,400 |  |  |  | 7.45 |  |  |  | 3.27 |  |  |  | - |
3.50 | - | 3.92 |  |  | 305,839 |  |  |  | 7.32 |  |  |  | 3.74 |  |  |  | - |  |  |  | 166,431 |  |  |  | 5.76 |  |  |  | 3.70 |  |  |  | - |
3.93 | - | 4.08 |  |  | 65,849 |  |  |  | 1.42 |  |  |  | 4.04 |  |  |  | - |  |  |  | 65,849 |  |  |  | 1.42 |  |  |  | 4.04 |  |  |  | - |
4.09 | - | 4.17 |  |  | 355,625 |  |  |  | 4.41 |  |  |  | 4.12 |  |  |  | - |  |  |  | 355,625 |  |  |  | 4.41 |  |  |  | 4.12 |  |  |  | - |
4.18 | - | 4.38 |  |  | 370,000 |  |  |  | 3.93 |  |  |  | 4.30 |  |  |  | - |  |  |  | 370,000 |  |  |  | 3.93 |  |  |  | 4.30 |  |  |  | - |
4.39 | - | 5.39 |  |  | 141,550 |  |  |  | 5.56 |  |  |  | 4.99 |  |  |  | - |  |  |  | 126,550 |  |  |  | 5.22 |  |  |  | 5.04 |  |  |  | - |
5.40 | - | 5.54 |  |  | 174,875 |  |  |  | 5.18 |  |  |  | 5.51 |  |  |  | - |  |  |  | 174,875 |  |  |  | 5.18 |  |  |  | 5.51 |  |  |  | - |
5.55 | - | 5.75 |  |  | 145,000 |  |  |  | 5.65 |  |  |  | 5.58 |  |  |  | - |  |  |  | 137,500 |  |  |  | 5.49 |  |  |  | 5.57 |  |  |  | - |
$1.78 | - | 5.78 |  |  | 2,266,122 |  |  |  | 5.95 |  |  | $ | 3.93 |  |  | $ | 257 |  |  |  | 1,649,299 |  |  |  | 4.70 |  |  | $ | 4.28 |  |  | $ | 50 |
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on the Company’s closing stock price of $3.05 as of December 31, 2019, which would have been received by the option holders had all option holders exercised their options as of that date. The aggregate intrinsic value of options exercised for the year ended December 31, 2019 was not material. The aggregated intrinsic value of options exercised for the year ended December 31, 2018 was approximately $2.6 million. The total number of in-the-money options that were exercisable as of December 31, 2019 was 189,069. For the year ended December 31, 2019, the total compensation costs related to unvested awards not yet recognized is $3.7 million and the weighted average period over which it is expected to be recognized is approximately 2 years. Valuation and Expense Information under Stock-Based-Payment Accounting Stock-based compensation expense related to stock options, restricted stock units, Market Condition RSU’s and the employee stock purchase plan for the years ended December 31, 2019 and 2018 was allocated as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018
|  | (in thousands)
Cost of product revenues |  | $ | 43 |  |  | $ | 64 |
Sales and marketing |  |  | 119 |  |  |  | 431 |
General and administrative |  |  | 2,710 |  |  |  | 2,232 |
Research and development |  |  | 162 |  |  |  | 167 |
Discontinued operations |  |  | - |  |  |  | 150 |
Total stock-based compensation |  | $ | 3,034 |  |  | $ | 3,044 |
The Company did not capitalize any stock-based compensation. The weighted-average estimated fair value per share of stock options granted during 2019 and 2018 was $1.40 and $1.83, respectively, using the Black Scholes option-pricing model with the following weighted-average assumptions:
|  | 2019 |  | 2018
Volatility |  |  | 48.11 | % |  |  | 43.28 | %
Risk-free interest rate |  |  | 2.12 | % |  |  | 2.84 | %
Expected holding period (in years) |  |  | 4.7 |  |  |  | 4.8 |
Dividend Yield |  |  | - | % |  |  | - | %
The weighted average fair value of the 2019 Market Condition RSUs during the year ended December 31, 2019 was $1.98. The weighted average fair value of the 2018 Market Condition RSUs granted during the year ended December 31, 2018 was $4.19. The following assumptions were used to estimate the fair value, using a Monte-Carlo valuation simulation, of the Market Condition RSUs granted during the year ended December 31, 2018:
|  | 2019 |  | 2018
Volatility |  |  | 58.96 | % |  |  | 44.02 | %
Risk-free interest rate |  |  | 1.99 | % |  |  | 2.27 | %
Correlation coefficient |  |  | 23.59 | % |  |  | 0.07 | %
Dividend yield |  |  | - | % |  |  | - | %
The Company used historical volatility to calculate the expected volatility as of December 31, 2019. Historical volatility was determined by calculating the mean reversion of the daily adjusted closing stock price. The risk-free interest rate assumption is based upon observed U.S. Treasury bill interest rates (risk-free) appropriate for the term of the Company’s stock options. The expected holding period of stock options represents the period of time options are expected to be outstanding and were based on historical experience. The vesting period ranges from one to four years and the contractual life is ten years.

X
- References No definition available. + Details
Name: | us-gaap_DisclosureTextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_ShareholdersEquityAndShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration