Stockholders Equity (Deficit)

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity (Deficit)

Note 13. Stockholders’ Equity (Deficit)

Common Stock

The Company amended its certificate of incorporation on May 11, 2015, to decrease the number of authorized shares from 600,000,000 to 200,000,000 shares. The 200,000,000 authorized shares of common stock have a par value of $0.001 per share. As of December 31, 2015, 6,845,638 shares were issued. As of December 31, 2014, 334,003 of the 600,000,000 shares were issued.

Each share of common stock is entitled to one vote. All shares of common stock rank equally as to voting and all other matters that the holders are entitled to vote on.  The shares of common stock have no preemptive or conversion rights, no redemption or sinking fund provisions, no liability for further call or assessment, and are not entitled to cumulative voting rights.  

Treasury Stock

Shares of common stock repurchased by the Company are recorded as treasury stock and result in an increase of stockholders’ equity (deficit) on the balance sheets. Reacquired common shares may be retired by resolution of the Board of Directors and resume the status of authorized and unissued common shares. There was no new treasury stock activity for the years ended December 31, 2015 and 2014.

Preferred Stock

Pursuant to the Company’s certificate of incorporation the Company has been authorized to issue 10,000,000 shares of preferred stock, each having a par value of $0.001. The preferred stock may be issued from time to time in one or more series with the authorization of the Company’s Board of Directors. The Board of Directors has the ability to determine voting power for each series issued, as well as designation, preferences, and relative, participating, optional or other rights and such qualifications, limitations or restrictions thereof.  

Stock-based Compensation

The Company initially established the 2001 Stock Option Plan (the “2001 Plan”), which included incentive and nonqualified stock options and restricted stock to be granted to directors, officers, employees, consultants and others. The 2001 plan terminated and no further awards were granted under the 2001 Plan upon the effective date of the Company’s 2011 Equity Incentive Plan (the “2011 Plan).

In February 2014, pursuant to the Series E Agreement, the amount of shares reserved under the 2011 Plan was increased to 20% of the total outstanding shares of the Company calculated on a fully diluted basis. The shares reserved under the 2011 Plan were required to be kept at that percentage with each subsequent equity financing. No new equity awards may be granted under the 2011 Plan.

On May 11, 2015, 940,112 shares were reserved for issuance under the Company’s 2014 Equity Incentive Plan (the “2014 Plan”), including 14,006 shares from the 2011 Plan. As of December 31, 2015, there were 756,332 shares available for issuance under the 2014 Plan.

As of December 31, 2015, options to purchase 736,645 shares of common stock were outstanding, including 410,649 options that were fully vested. The remaining options vest over 2.9 years.

The Company issued 27,500 RSUs in the year ended December 31, 2015 at a weighted average grant date fair value of $5.45. The RSUs vest 100% on March 31, 2016.  As of December 31, 2015, there is $62,562 of unrecognized compensation expense related to the RSUs, which will be recognized over the weighted average remaining service period of three months. There is an additional $788,875 of unrecognized compensation expense of related to unvested stock options, which the Company expects to recognize over a weighted-average period of approximately 2.9 years.

The exercise price of options and restricted stock granted is generally equal to the estimated fair value of the Company’s common stock on the date of grant, as determined by the Company’s Board of Directors. All options granted have a ten-year term. The vesting period of options and restricted stock grants is established by the Board of Directors but typically ranges between three and four years.

A summary of the Plans’ stock option activity is as follows:

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate IntrinsicValue
Balance at January 1, 2014		349,046		$	3.14	7.5
Granted		314,685			4.01
Exercised		(9,909	)		2.17			$	—
Forfeited		(54,739	)		2.15
Expired		(3,506	)		2.98
Balance at December 31, 2014		595,577			3.71		7.8	$	—
Granted		171,408			6.11
Exercised		(13,960	)		2.50			$	86,070
Forfeited		(16,380	)		8.57
Balance at December 31, 2015		736,645			4.18		7.5	$	947,794
Vested and expected to vest at December 31, 2015		687,488			4.01		7.3	$	723,894
Exercisable at December 31, 2014		294,851			3.42		6.5	$	—
Exercisable at December 31, 2015		410,649			3.55		6.3	$	641,115

Stock Purchase Plan

In December 2015, the Board of Directors adopted a Stock Purchase Plan (the “Purchase Plan”) which allows directors, any individual deemed by the Board of Directors to be an officer for purposes of Section 16 of the Exchange Act, and anyone designated by the Board of Directors as eligible to participate in the Purchase Plan to purchase shares of the Company’s common stock from the Company at fair market value. The aggregate number of shares of common stock that may be issued under the Purchase Plan shall not exceed 250,000 shares of common stock, and a maximum of 7,500 shares of common stock may be purchased by any one participant on any one purchase date. The Board of Directors or an authorized committee must review and approve each individual request to purchase common stock under the Purchase Plan. Cash received from the sale of common stock by the Company to eligible participants for the year ended December 31, 2015 was $20,000 which resulted in the sale of 4,184 shares of the Company’s common stock at fair market value.      

2014 Employee Stock Purchase Plan

In April 2015, the Company’s stockholders approved the 2014 Employee Stock Purchase Plan (“ESPP”), which became effective in May 2015. Initially, the ESPP authorizes the issuance of up to 110,820 shares of common stock pursuant to purchase rights granted to the Company’s employees or to employees of any of the Company’s designated affiliates.  The number of shares of common stock reserved for issuance automatically increases on January 1 of each calendar year, from January 1, 2016 to January 1, 2024 by the least of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, (2) 195,000 shares, or (3) a number determined by the Company’s board of directors that is less than (1) and (2). The ESPP enables participants to contribute up to 15% of such participant’s eligible compensation during a defined  period (not to exceed 27 months) to purchase common stock of the Company. The purchase price of common stock under the ESPP will be the lesser of: (i) 85% of the fair market value of the Company’s common stock at the applicable purchase date. As of December 31, 2015, no shares of common stock were issued and 110,820 shares of common stock were reserved for future issuance under the ESPP.