Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Stockholders' Equity

Stockholders' Equity

Note11. Shareholders’ Equity

Preferred Stock

As of December 31, 2018 and 2017, there were 2,000,000 shares of preferred stock authorized and no shares of preferred stock issued or outstanding.

Common Stock

During the year ended December 31, 2017 we received cash proceeds of $123,603 in exchange for shares of the Company’s common stock issued upon the exercise of options.  No income tax benefits were recognized during 2017 related to stock option activity as we have a full valuation allowance recorded against its deferred tax assets. However, tax benefits (expense) for the excess of the value of the shares issued over the price paid of $1,209,000 was created in 2017.  The cumulative excess tax benefit will be credited directly to shareholders' equity when realized.

On March 7, 2017, 50,000 shares of the Company’s common stock were issued to a consultant for the performance of certain business development services for the Company at a fair value of approximately $297,500 or $5.95 per share.  We expensed $68,653 and $228,847 in 2018 and 2017, respectively.

On August 7, 2018, 333,200 shares of restricted stock were forfeited. Forfeitures of restricted stock were related to a settlement agreement between the Company and its former CEO, CFO, and two former Directors. (see Note 14.)

On October 15, 2018, the Company raised $21.9 million, net of issuance costs, in capital from the offering and sale of 5,541,562 shares of common stock at a price of $3.97 per share, along with warrants to purchase up to an additional 2,770,781 shares of common stock at a price of $4.96 per share.

During the year ended December 31, 2018, 267,500 vested employee stock options were exercised for net cash proceeds of $67,548 at a weighted average exercise price of $3.09 per share. The Company withheld 210,132 of these common shares at a cost of $759,028, or a weighted average cost of $3.61 per share, to cover the employee withholding taxes and other expenses related to these exercises.