Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Common Stock

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Note 8 - Common Stock
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
8.
Common Stock
 
On
June 8, 2018,
the Company issued
100,000
restricted shares of its common stock at a value of
$2.56
a share, or an aggregate value of approximately
$256,000.
 
On
February 12, 2018,
in connection with the closing of the
February 2018
Offering, the Company issued an aggregate of
11,500,000
shares of common stock, including the shares issued in connection with the exercise of the underwriters’ overallotment option, at a public offering price of
$3.00
per share for gross proceeds of approximately
$34,500,000.
The net proceeds to the Company, after deducting underwriting discounts and commissions and other offering expenses, were approximately
$32,213,000.
 
 
Through the
November 2017
ATM Facility, the Company
may
offer and sell, from time-to-time, up to
$25,000,000
aggregate offering price of shares of its common stock. During the
three
and
six
months ended
June 30, 2018,
the Company sold
65,252
shares and
273,529
shares, respectively, of common stock under the
November 2017
ATM Facility for net proceeds of approximately
$172,000
and
$1,183,000.
As of
June 30, 2018,
the Company has sold
332,778
shares of common stock under the
November 2017
ATM Facility for net proceeds of approximately
$1,308,000.
   
Warrants for Common Stock
 
As of
June 30, 2018,
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
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 new term loan in connection with the
2017
Loan Agreement and the remaining unamortized balance of debt issuance costs was recorded to interest expense for the quarter 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.
 
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,
are 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 are amortized to interest expense over the loan term. During the
three
and
six
months ended
June 30, 2018,
the Company recorded
$83,000
and
$160,000,
respectively, of interest expense relating to the debt issuance costs using the effective interest method. 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, 2018,
the unamortized debt discount was
$1,388,000.
 
No
shares issuable pursuant to warrants have been exercised during the
three
and
six
months ended
June 30, 2018
and
2017.
  
No
shares issuable pursuant to warrants have been cancelled during the
three
and
six
months ended
June 30, 2018
and
2017.
  
The stock-based compensation expense related to warrants issued was
zero
for both the
three
and
six
months ended
June 30, 2018
and
2017.