Note 10 - Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

10.

          STOCKHOLDERS’ EQUITY

Common Stock Dividend Restrictions

As of

December 

31,

2019,

there are

no

restrictions on common stock dividends. Also, at

December 

31,

2019

and

2018,

retained earnings were

not

restricted upon involuntary liquidation.

Common Stock Issuances

(Dollars in thousands)
Date of issuance	Type of issuance	Expense/ Prepaid/ Cash	Stock issuance recipient	Reason for issuance	Total no. of shares		Grant date fair value or net proceeds recorded at issuance
January, April, July, and October 2019	Vested restricted common stock	Expense	Four board members	Director compensation		164,713	$	162
May 2019	Common stock	Expense	Employee	Approved bonus		18,837		17
Total 2019 issuances						183,550	$	179	(1)
January, April, July and October 2018	Vested restricted common stock	Expense	Four board members	Director compensation		72,157	$	175
January and July 2018	Common stock	Expense	Three Employees	Approved bonuses		68,118		183	(2)
July and December 2018	Common stock	Expense	Related Party, James McKenzie	Pursuant to royalty agreement		5,755		14	(2)
Total 2018 issuances						146,030	$	372	(3)(4)
January, April, August and October 2017	Vested restricted common stock	Expense	Four board members	Director compensation		49,980	$	200
January, February and June 2017	Common stock	Expense	Three Employees	Approved bonuses		28,634		182	(5)
January and December 2017	Common stock	Expense	Related party, James McKenzie	Pursuant to royalty agreement		3,293		16	(5)
January and February 2017	Common stock	Expense	Two Employees	Cashless stock option exercises		245		—	(6)
May 2017	Common stock	Prepaid expense/expense	Third-party consultant	Strategic investor marketing services		15,000		57	(7)
October 2017	Common stock	Cash	Various third-party shareholders	Equity raise		7,392,856		18,905
Total 2017 issuances						7,490,008	$	19,360	(8)

( 1 ) Total excludes $36 thousand of 2019 stock compensation and $3 thousand of 2018 stock compensation related to royalties that were recorded as expense but not issued and outstanding as of December 31, 2019.

( 2 ) Includes bonus and royalty of $170 thousand that was accrued and expensed in 2017.

( 3 ) Total excludes $3 thousand of stock compensation related to royalties that were recorded as expense but not issued and outstanding as of December 31, 2018.

( 4 ) Excludes $24 thousand of stock compensation for stock issued in 2017 that was amortized from prepaid expense in 2018.

( 5 ) Includes bonuses and royalty of $176 thousand that were accrued and expensed in 2016.

( 6 ) The Company received $0 for the issuance in the cashless option exercises.

( 7 ) Amount includes $24 thousand that was included in prepaid expense at December 31, 2017.

( 8 ) Does not include stock expense of $170 thousand included in accrued liabilities at December 31, 2017 for unissued stock.

S-

3

registration

The Company filed an S-

3

registration statement on

March 14, 2017

containing a prospectus that was effective

March 29, 2017.

With this filing, CUI Global

may

from time to time issue various types of securities, including common stock, preferred stock, debt securities and/or warrants, up to an aggregate amount of

$100

million.

On

October 23, 2017,

the Company closed on an underwritten public offering of

7,392,856

shares at a public offering price of

$2.80

per share, including

964,285

shares sold at the public offering price pursuant to the underwriter's exercise in full of its option to purchase additional shares to cover over-allotments. The net proceeds to CUI Global (after deducting underwriting discount and other expenses payable by the Company) were approximately

$18.9

million. The Company has used the net proceeds from the offering primarily for general corporate purposes, which includes operating expenses, working capital to improve and promote its commercially available products, advance product candidates, to expand international presence and commercialization.

Employee Stock Options

All options issued are presented at post reverse quantities.

On

May 16, 2008

the Company’s board of directors adopted the

2008

Equity Incentive Plan (the ‘‘Equity Incentive Plan’’) and authorized 

1,500,000

 shares of Common Stock to fund the Plan. At the

2008

Annual Meeting of Shareholders held on

September 15, 2008,

the Equity Incentive Plan was approved by the Company shareholders. At the

2009

Annual Meeting of Shareholders held on

September 29, 2009,

the shareholders approved an amendment to the

2008

Equity Incentive Plan to increase the number of common shares issuable under the plan from 

1,500,000

 to 

3,000,000.

 All of these shares have been registered under Form S-

8.

The

2008

Equity Incentive Plan is intended to: (a) provide incentive to employees of the Company and its affiliates to stimulate their efforts toward the continued success of the Company and to operate and manage the business in a manner that will provide for the long-term growth and profitability of the Company; (b) encourage stock ownership by employees, directors and independent contractors by providing them with a means to acquire a proprietary interest in the Company by acquiring shares of stock or to receive compensation, which is based upon appreciation in the value of Stock; and (c) provide a means of obtaining and rewarding employees, directors, independent contractors and advisors.

The

2008

Equity Incentive Plan provides for the issuance of incentive stock options (ISOs) and Non-Statutory Options (NSOs) to employees, directors and independent contractors of the Company. The Board shall determine the exercise price per share in the case of an ISO at the time an option is granted and such price shall be

not

less than the fair market value or 

110%

of fair market value in the case of a

ten

percent or greater stockholder. In the case of an NSO, the exercise price shall

not

be less than the fair market value of

one

share of stock on the date the option is granted. Unless otherwise determined by the Board, ISOs and NSOs granted under both plans have a maximum duration of 

ten

 years.

On

January 5, 2009

the Company board of directors received and approved a written report and recommendations of the Compensation Committee, which included a detailed executive equity compensation report and market analysis and the recommendations of Compensia, Inc., a management consulting firm that provides executive compensation advisory services to compensation committees and senior management of knowledge-based companies. The Compensation Committee used the report and analysis as a basis for its formal written recommendation to the board. Pursuant to a

January 8, 2009

board resolution the 

2009

Equity Incentive Plan (Executive), a Non-Qualified Stock Option Plan, was created and funded with 

4,200,000

 shares of

$0.001

 par value common stock. The Compensation Committee was appointed as the Plan Administrator to manage the plan. On

October 11, 2010,

CUI Global authorized an additional 

3,060,382

 options under the

2009

Equity Incentive Plan (Executive). On

September 21, 2012,

CUI Global authorized an additional 

330,000

 options under the

2009

Equity Incentive Plan (Executive).

The

2009

Equity Incentive Plan (Executive) provides for the issuance of Incentive Non Statutory Options to attract, retain and motivate executive and management employees and directors and to encourage these individuals to acquire an equity interest in the Company, to make monetary payments to certain management employees and directors based upon the value of the Company’s stock and to provide these individuals with an incentive to maximize the success of the Company and further the interest of the shareholders. The Administrator of the plan is authorized to determine the exercise price per share at the time the option is granted, but the exercise price shall

not

be less than the fair market value on the date the option is granted. Stock options granted under the

2009

Plan have a maximum duration of 

ten

 years.

A summary of the options issued to employees and directors and changes during the year are presented below:

	For the Year Ended December 31, 2019
	Number of Options			Weighted Average Exercise Price ($)		Weighted Average Remaining Contract Life (years)		Aggregate Intrinsic Value ($ '000)
Balance at beginning of year		923,898		$	6.32		3.64	$	—
Expired		(74,263	)		7.22
Balance at end of year		849,635		$	6.24		2.95		—
Exercisable		849,635		$	6.24		2.95		—

As of

December 

31,

2019,

2018,

and

2017

all issued and outstanding stock options were fully vested. There were

no

options granted during

2019,

2018

or

2017.

As of

December 31, 2019,

there are

no

remaining shares available to grant under these equity incentive plans.