Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ equity:

Common Stock

In connection with the Company’s Annual Meetings of Stockholders during 2019 and 2020, the Company’s stockholders approved, among other matters, amendments to the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock in 2019 from 125,000,000 to 175,000,000, and in 2020 from 175,000,000 to 235,000,000.

On November 4, 2020, the Board of Directors authorized the repurchase of up to $25 million of the Company's shares of Common Stock. The timing and amount of any shares purchased on the open market will be determined based on the Company's evaluation of market conditions, share price and other factors. The Company utilized existing cash on hand to fund the share repurchase program.

During the year ended December 31, 2021, a cumulative total of 3,202,690 shares, priced at $3.69 for a value of $11.8 million were repurchased and recorded as Treasury Stock in the consolidated balance sheet.

Preferred Stock and Series A Preferred

The Company had authorized 5,000,000 “blank check” shares of $.001 par value convertible preferred stock. In the event of the Company’s liquidation, dissolution or winding up, holders of the Series A Preferred will receive a payment equal to $0.001 per share of Series A Preferred before any proceeds are distributed to the holders of common stock. After the payment of this preferential amount, and subject to the rights of holders of any class or series of capital stock hereafter created specifically ranking by its terms senior to the Series A Preferred, the holders of Series A Preferred will participate ratably in the distribution of any remaining assets with the common stock and any other class or series of our capital stock hereafter created that participates with the common stock in such distributions.

During the year ended December 31, 2020, 2,093,155 shares of Series A were converted on a one-for-one basis into shares of Common Stock, which no shares of Series A Preferred remained outstanding as of that date. At December 31, 2021, 2,285,700 shares of “blank check” preferred stock remain authorized but undesignated. There were no conversions of Series A Preferred during the year ended December 31, 2019.

Series B Preferred stock financing

In May of 2018, the Company closed on the sale of an aggregate of 5,000 shares of the Company’s authorized preferred stock that the Board of Directors of the Company has designated as Series B Non-Voting Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”) at a purchase price of $10,000 per share.

Each share of Series B Preferred Stock is convertible into a number of shares of the Company’s common stock at a conversion price of $1.80 per share (subject to adjustment for stock splits and stock dividends as provided in the Certificate of Designation). At the time of closing the then outstanding shares of Series B Preferred Stock were convertible into an aggregate 27,777,778 shares of Common Stock. The Series B Preferred Stock does not contain any price-based anti-dilution protection. The Series B Preferred Stock is convertible at any time at the option of the holder, subject to certain limitations related to beneficial ownership.

The Company has the right to deliver a notice to the holders of the Series B Preferred Stock to require conversion of the Series B Preferred Stock into Common Stock. Following an initial forced conversion of the Series B Preferred Stock, every ninety (90) days thereafter, the Company has the right to require the forced conversion of the still outstanding shares of Series B Preferred Stock, subject to certain limitations related to beneficial ownership.

There were no conversions of Series B Preferred Stock during the year ended December 31, 2021. As of December 31, 2021, 443 shares of Series B Preferred Stock are outstanding.

Public Offering

On April 15, 2019 the Company completed an underwritten public offering by the Company and a selling stockholder of 12,000,000 shares of common stock at a public offering price of $5.00 per share. The gross proceeds from the Company’s portion of the offering (10,000,000 shares), before deducting the underwriter discounts and commission and other offering expenses, was $50.0 million. The net proceeds were $47.6 million. The gross proceeds to the selling stockholder were approximately $19.0 million, which includes shares sold pursuant to the underwriters’ exercise of their option to purchase an additional 1,800,000 shares of common stock at the public offering price.

Stock options

During the 2019 Annual Meeting of Stockholders, shareholders approved an amendment to the Company’s 2011 Equity Incentive Plan (the "2011 EIP"), to increase the number of shares of common stock authorized for issuance under the plan by 7,100,000 shares from 11,050,000 to 18,150,000.

Additionally, during the 2019 Annual Meeting of Stockholders, shareholders approved the Company’s 2019 Stock Option and Incentive Plan (the “2019 Plan”), which reserves 14,000,000 shares of stock for issuance under the 2019 Plan.

An additional 2,677,041 shares of Common Stock underlying options previously granted under the 2011 EIP, remain outstanding and exercisable as of December 31, 2021. The 2011 EIP expired in July 2019 and no new securities may be issued thereunder.

Options may be awarded during the ten-year term of the 2019 Plan to Company employees, directors, consultants and other affiliates.

During the years ended December 31, 2021, 2020 and 2019, Company employees, directors and affiliates exercised approximately 160,000, 1,400,000 and 800,000 stock options, respectively, with net proceeds to the Company of approximately $0.5 million, $3.4 million and $2.3 million, respectively. The intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was approximately $0.1 million, $3.5 million and $1.9 million, respectively.

Stock option activity for the year ended December 31, 2021 is as follows:

	Number of Shares	Weighted Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding at January 1, 2021	7,060,966	$	4.55	$	2,831
Granted in 2021:
Officers and Directors	1,678,425	$	3.88
Employees	2,145,494	4.12
Exercised	(160,023)	2.90
Forfeitures	(1,112,101)	4.54
Outstanding at December 31, 2021	9,612,761	$	4.37	$	520

Options outstanding at December 31, 2021 are as follows:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Aggregate Intrinsic Value
$1.00 – 5.00	7,367,252	8.15	$	3.82
$5.01 – 10.00	2,194,085	7.56	$	5.95
$10.01 – 15.00	29,924	3.14	$	13.09
$15.01 – 20.00	21,500	2.75	$	16.47
	9,612,761				$	520

Options exercisable at December 31, 2021 are as follows:

Range of Exercise Prices	Number Outstanding	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price		Aggregate Intrinsic Value
$1.00 – 5.00	3,201,210	7.02	$	3.61
$5.01 – 10.00	1,252,843	7.1	$	6.06
$10.01 – 15.00	29,924	3.14	$	13.09
$15.01 – 20.00	21,500	2.75	$	16.47
	4,505,477				$	479

The weighted average grant date fair value of options granted during the years ended December 31, 2021, 2020 and 2019 was $4.01, $5.13 and $4.29, respectively. There were no options granted during the years ended December 31, 2021, 2020 or 2019 whose exercise price was lower than the estimated market price of the stock at the grant date.

Nonvested stock options as of December 31, 2021, and changes during the year then ended, are as follows:

Nonvested Shares	Shares	Weighted Average Grant Date Fair Value		Intrinsic Value
Nonvested at January 1, 2021	4,045,200
Granted	3,823,919
Vested	(1,811,558)
Forfeited	(950,277)
Nonvested at December 31, 2021	5,107,284	$	4.32	$	41

As of December 31, 2021, there was approximately $8.3 million of unrecognized compensation cost related to unvested share-based compensation awards granted. These costs will be expensed over the next three years.

Stock-based compensation

During the year ended December 31, 2021, a total of 3,823,919 options to purchase Common Stock, with an aggregate fair market value of approximately $15.3 million, were granted to Company employees and directors. The options granted have a term of 10 years from the grant date and vest ratably between a one and three-year period. The fair value of each option is amortized as compensation expense evenly through the vesting period.

Restricted stock units

During the year ended December 31, 2021, 337,628 RSUs were issued under the 2019 Plan to members of the Company’s executive officers, board of directors and certain employees, with a fair market value of approximately $1.3 million, which vest in equal installments from one to three years. The fair value of restricted units is determined using quoted market prices of the Common Stock and the number of shares expected to vest.

Restricted stock activity during the year ended December 31, 2021 was as follows:

	Number of Restricted Shares	Weighted Average Fair Market Value Per RSU
Outstanding at January 1, 2021	940,759	$	3.71
Granted:
Officers and Directors	301,821	$	3.88
Employees	35,807	$	3.84
Vested	(542,825)	$	3.79
Forfeitures	(101,215)	$	4.25
Outstanding at December 31, 2021	634,347	$	4.09

Warrants:

The Company has granted warrants to purchase shares of Common Stock. Warrants may be granted to affiliates in connection with certain agreements.

As of December 31, 2021, a cumulative total of 2,051,033 warrants to affiliates, with exercise prices ranging from $2.38 to $3.42, remain exercisable and outstanding. The warrants were valued using the Black-Scholes Model, with a cumulative fair value of approximately $4.5 million. There were no warrants granted or exercised during the years ended December 2021, 2020 or 2019.