Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholder's Equity

STOCKHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue 10.0 million shares of preferred stock, par value $0.001, of which 1.0 million shares are designated as Series A Junior Participating Preferred Stock, 800 are designated as Series B 8% Cumulative Convertible Preferred Stock, 600 are designated as Series C 6% Cumulative Convertible Preferred Stock and 50,000 have been designated as Series D Junior Participating Cumulative Preferred Stock. No shares of preferred stock were outstanding as of December 31, 2015 or 2014.

Common Stock Offerings

January 2016 Financing

In January 2016, the Company entered into subscription agreements with certain purchasers pursuant to which it agreed to sell an aggregate of 11,363,640 shares of its common stock and warrants to purchase up to an additional 5,681,818 shares of its common stock to the purchasers for an aggregate offering price of $10.0 million, to take place in separate closings. Each share of common stock was sold at a price of $0.88 and included one half of a warrant to purchase a share of common stock. The warrants have an exercise price of $0.88 per share, become exercisable six months and one day after the date of issuance and will expire on the seventh anniversary of the date of issuance. During the first closing in January 2016, the Company sold an aggregate of 2,528,411 shares and warrants to purchase up to 1,264,204 shares of common stock for gross proceeds of $2.2 million. The remaining shares and warrants were sold in a subsequent closing in March 2016 for gross proceeds of $7.8 million following stockholder approval at a special meeting on March 2, 2016.

February 2015 Financing

In February 2015, the Company entered into subscription agreements with certain purchasers pursuant to which it sold an aggregate of 6,043,955 shares of its common stock and issued warrants to purchase up to an additional 3,021,977 shares of its common stock.  Each share of common stock was sold at $1.82 and included one half of a warrant to purchase a share of common stock. The warrants have an exercise price of $1.82 per share, are exercisable beginning six months and one day after the date of issuance and expire on the seventh anniversary of the date of issuance. The total net proceeds from the offering were $10.9 million after deducting expenses of approximately $0.1 million.

In connection with the January 2016 offering, the Company entered into a warrant amendment with the holders of the Company’s warrants to purchase common stock issued in February 2015 to reduce the exercise price of those warrants to $0.88 per share. The warrants become exercisable in July 2016 and will expire in January 2023.

Ascendiant Offering Agreement

During 2014, and 2013, the Company sold an aggregate of 954,922 and 312,450 shares of common stock, respectively, under the Controlled Equity Offering Agreement with Ascendiant Capital Markets, LLC (“Ascendiant”) resulting in offering proceeds of approximately $2.2 million and $0.8 million, respectively. The agreement with Ascendiant was terminated by the Company in August 2014.

Aspire Capital Common Stock Purchase Agreement

In August 2014, the Company and Aspire Capital entered into a Common Stock Purchase Agreement (the “Aspire Purchase Agreement”), which provides that Aspire Capital is committed to purchase, if the Company chooses to sell and at the Company’s discretion (pursuant to obtaining the permission mentioned in the paragraph below), an aggregate of up to $22.0 million of shares of the Company’s common stock over the 24-month term of the Aspire Purchase Agreement. The Aspire Purchase Agreement can be terminated at any time by the Company by delivering notice to Aspire Capital. The shares will be sold at a price equal to the lower of the lowest sales price of the Company’ s common stock on the purchase date or the average of the lowest three closing sales prices for the twelve business days prior to the purchase date. The Aspire Purchase Agreement specifies a price floor of $1.00 per share. In addition, the Aspire Purchase Agreement specifies a maximum number of shares to be sold to Aspire Capital unless the average share price exceeds $1.97. Under the Aspire Purchase Agreement, the Company delivered to Aspire Capital a commitment fee in the form of common stock of 0.3 million shares at a value of $0.4 million, in consideration for Aspire Capital's obligation to purchase up to $22.0 million of the Company’s common stock. To date, the Company has issued approximately 2.6 million additional shares of its common stock to Aspire Capital at a weighted average sales price of $1.46 per share, for aggregate net proceeds of $3.7 million. The Company had $18.2 million remaining under the terms of the Aspire Purchase Agreement. Of the maximum number of shares, approximately 5.0 million shares of common stock remain available for sale to Aspire Capital. As of December 31, 2015, the Company did not have access to any of the reserve due to a stock price of $0.99 per share.

Prior to the Company’s January 2016 financing, its ability to issue equity under the committed equity financing facility with Aspire Capital was subject to the written consent from one of the purchasers in the February 2015 financing. Pursuant to the terms of the Company’s January 2016 financing, the Company is no longer required to obtain such consent.

Warrants

A summary of warrant activity during the year ended December 31, 2015 is as follows:

	Common Shares Issuable upon Exercise		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)
Outstanding at December 31, 2014	6,859,682		$	3.83	2.7
Issued	3,174,417		$	1.81	6.3
Exercised	—		$	—	—
Cancelled	(1,196,748	)	2.38		—
Outstanding as of December 31, 2015	8,837,351		$	3.30	3.6
Exercisable as of December 31, 2015	8,837,351		$	3.30	3.6

In connection with the February 2015 financing, the Company issued warrants (the “February Warrants”) to purchase up to 3,021,977 shares of its common stock at an exercise price of $1.82 per share. The initial $5.1 million fair value of the warrants on the transaction date was determined using the Black-Scholes option pricing model and was recorded as the initial carrying value of the common stock warrant liability. The fair value of these warrants is remeasured at each financial reporting period with any changes in fair value recognized as a change in fair value of warrant liability in the accompanying consolidated statements of operations. As of December 31, 2015, the fair value of the warrants was $1.8 million. Pursuant to the January 2016 financing, the exercise price of the February Warrants was reduced to $0.88 per share, become exercisable in July 2016 and have an expiration date of February 2022.

In connection with the funding of the second term loan under the Credit Facility during the third quarter of 2015, the Company issued warrants to the Lenders to purchase up to an aggregate of 152,440 shares of common stock at an exercise price of $1.64 per share.

The following table shows the number of outstanding warrants by exercise price and date of expiration as of December 31, 2015:

Shares Issuable Upon Exercise	Exercise Price		Expiration Date
2,469,136	$	5.25	February 2017
3,000,000	$	3.40	May 2018
3,021,977	$	1.82	February 2022
193,798	$	1.29	October 2024
152,440	$	1.64	July 2025
8,837,351