Quarterly report pursuant to Section 13 or 15(d)

Note 7 - Common Stock

v3.7.0.1
Note 7 - Common Stock
6 Months Ended
Jun. 30, 2017
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
7.
         Common Stock
 
On
May 19, 2017,
the Company issued
35,000
restricted shares of its common stock at a value of
$7.42
a share, or an aggregate value of approximately
$260,000.
 
On
March 22, 2017,
in connection with the closing of the
March 2017
Offering, we issued an aggregate of
8,625,000
shares of common stock, including the exercise of the underwriters’ overallotment option, at a public offering price of
$4.00
per share for gross proceeds of approximately
$34,500,000.
The net proceeds to the Company, after the deduction of underwriting discounts, commissions and other offering expenses, were approximately
$31,440,000.
 
On
June 17, 2016,
in connection with the closing of the
June 2016
Offering, we issued an aggregate of
3,105,000
shares of common stock, including the exercise of the underwriters’ overallotment option, at a public offering price of
$5.00
per share for gross proceeds of approximately
$15,525,000.
The net proceeds to the Company, after the deduction of underwriting discounts, commissions and other offering expenses, were approximately
$13,886,000.
 
Warrants for Common Stock
 
As of
June 30, 2017,
outstanding warrants to purchase shares of common stock were as follows: 
 
 
   
 
   
 
 
 
 
 
 
Number of
 
 
   
 
   
 
 
 
 
 
 
Shares
 
 
   
 
   
 
 
 
 
 
 
Outstanding
 
 
   
Exercisable
   
Expiration
 
Exercise
 
 
Under
 
Issuance Date
   
for
   
Date
 
Price
 
 
Warrants
 
                             
September 2014
   
Common Shares
   
September 23, 2019
  $
4.24
     
86,831
 
October 2014
   
Common Shares
   
October 13, 2019
  $
4.24
     
29,000
 
November 2014
   
Common Shares
   
November 12, 2019
  $
4.24
     
12,500
 
February 2015
   
Common Shares
   
February 17, 2025
  $
4.00
     
75,697
 
March 2015
   
Common Shares
   
March 26, 2025
  $
2.72
     
1,454
 
May 2015
   
Common Shares
   
May 12, 2025
  $
4.24
     
36,229
 
May 2015
   
Common Shares
   
May 17, 2020
  $
4.24
     
21,585
 
December 2015
   
Common Shares
   
December 16, 2025
  $
5.60
     
26,875
 
April 2016
   
Common Shares
   
April 1, 2026
  $
6.08
     
25,000
 
May 2016
   
Common Shares
   
May 11, 2021
  $
7.74
     
5,000
 
June 2016
   
Common Shares
   
June 20, 2026
  $
4.98
     
100,402
 
May 2017
   
Common Shares
   
May 25, 2027
  $
9.50
     
222,049
 
     
 
   
 
   
 
     
642,622
 
 
In connection with the Loan and Security Agreement entered into on
September 30, 2014,
as amended on
February 19, 2015,
May 14, 2015,
November 30, 2015
and
March 18, 2016 (
collectively, the
“2014
Loan Agreement”), with Pacific Western Bank (as successor in interest by merger to Square
1
Bank), the Company issued a warrant to purchase a total of
58,962
shares of common stock at an exercise price of
$4.24
per share. The fair value of the warrant was recorded as debt issuance costs, presented in the condensed consolidated balance sheets as a deduction from the carrying amount of the note payable, and was being amortized to interest expense over the loan term. The outstanding indebtedness was repaid in
June 2016
from the proceeds of the new term loan in connection with the
2016
Loan Agreement and the remaining unamortized balance of debt issuance costs was recorded to interest expense for the quarter ended
June 30, 2016.
During the
three
and
six
months ended
June 30, 2016,
the Company recorded
$342,000
and
$387,000,
respectively, of interest expense relating to the debt issuance costs. The warrant was exercised in
August 2016.
 
In connection with the
2016
Loan Agreement, the Company issued a warrant to purchase a total of
100,402
shares of common stock at an exercise price of
$4.98
per share. The Company determined the fair value of the warrant on the date of issuance to be
$350,000.
The fair value along with legal fees totaling
$90,000,
was recorded as debt issuance costs and was amortized to interest expense over the loan term. The debt issuance costs were presented in the condensed consolidated balance sheet as a deduction from the carrying amount of the note payable. The outstanding indebtedness was repaid in
May 2017
from the proceeds of the term loan made in connection with the
2017
Loan Agreement and the remaining unamortized balance of debt issuance costs was recorded to interest expense for the
three
months ended
June 30, 2017.
During the
three
and
six
months ended
June 30, 2017,
the Company recorded
$336,000
and
$371,000
respectively, of interest expense relating to the debt issuance costs. During the
three
and
six
months ended
June 30, 2016,
the Company recorded
no
interest expense relating to the debt issuance costs because it was immaterial for the financial reporting period. As of
June 30, 2017,
the unamortized debt discount related to the
2016
Loan Agreement was zero.
 
In connection with the
2017
Loan Agreement, the Company issued warrants to purchase a total of
222,049,
shares of common stock at an exercise price of
$9.50
per share. The warrants have a contractual life of
ten
years and are exercisable immediately in whole or in part. The Company determined the fair value of the warrants on the date of issuance to be
$940,000
using the Black-Scholes option pricing model. Assumptions used were dividend yield of
0%,
volatility of
55.1%,
risk free interest rate of
2.25%
and a contractual life of
ten
years. The fair value of the warrants along with financing and legal fees totaling
$786,000,
is recorded as debt issuance costs and presented in the condensed consolidated balance sheets as a deduction from the carrying amount of the note payable. The debt issuance costs will be amortized to interest expense over the loan term. During the
three
and
six
months ended
June 30, 2017,
the Company recorded
$38,000
of interest expense relating to the debt issuance costs using the effective interest method. As of
June 30, 2017,
the unamortized debt discount was
$1,688,000.
 
A total of
4,701
and
6,250
shares, issuable pursuant to warrants issued in connection with a private offering on
September 30, 2014,
were issued in connection with the exercise of warrants during the
six
months ended
June 30, 2017
and
2016,
respectively.
 
No
shares issuable pursuant to warrants have been cancelled during the
six
months ended
June 30, 2017.
A total of
1,094
shares issuable pursuant to warrants issued to
two
vendors in
October 2014
were cancelled during the
six
months ended
June 30, 2016
as the milestones related to these shares were
not
achieved.   
 
The stock-based compensation expense related to warrants issued was
zero
and
$20,000
for the
three
months ended
June 30, 2017
and
2016,
respectively. The stock-based compensation expense related to warrants issued was
zero
and
$118,000
for the
six
months ended
June 30, 2017
and
2016,
respectively.