Stockholders Deficit

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Stockholders' Deficit

Note 11. Stockholders’ Deficit

Cantor Fitzgerald & Co. Market Offering

In April 2017, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent (“Cantor Fitzgerald”), pursuant to which the Company may offer and sell, from time to time, through Cantor Fitzgerald, shares of the Company’s common stock, par value $0.001 per share, by any method deemed to be an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “ATM Offering”). In April 2017, the Company also filed a prospectus supplement (File No. 333-216977) with the SEC relating to the offer and sale of up to $20,000,000 of common stock in the ATM Offering. In June 2017, the Company filed an amendment to the prospectus supplement with the SEC to increase the amount of common stock that may be offered and sold in the ATM Offering under the Sales Agreement to $40,000,000 in the aggregate, inclusive of the common stock previously sold in the ATM Offering prior to the date of the amendment.

As of June 30, 2017, the Company has sold 3,184,972 shares of common stock under the ATM Offering at then-market prices for total gross proceeds of approximately $15.4 million. After sales commissions and $0.2 million of other offering expenses paid and payable by the Company in connection with the ATM Offering, the Company’s aggregate net proceeds through June 30, 2017 were approximately $14.7 million. These costs have been recorded as a reduction of proceeds received in arriving at the amount recorded in additional paid-in capital as of June 30, 2017.

Treasury Stock

In January 2017, the Company’s board of directors approved the retirement of the 1,396 shares of the Company’s common stock previously held in treasury, and returned them to the status of authorized and unissued shares of the Company’s common stock.

Stock-based Compensation

As of June 30, 2017, there were 89,968 shares available for issuance under the Company’s 2014 Equity Incentive Plan (the “Plan”) and options to purchase 1,436,978 shares of common stock were outstanding, including 714,443 options that were fully vested. As of June 30, 2017, there was total unrecognized compensation expense of $1,010,315 related to unvested stock options, which the Company expects to recognize over a weighted-average period of approximately 1.93 years.

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

	Number of Shares			Weighted- Average Exercise Price Per Share		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Balance at December 31, 2016		1,161,705		$	3.35	7.7		$	36,887
Granted		349,000		2.04
Exercised		(40,809	)	2.69				$	152,071
Forfeited		(30,057	)		3.23
Expired/Cancelled		(2,861	)		9.03
Balance at June 30, 2017		1,436,978		$	3.03		7.8	$	538,789
Exercisable at June 30, 2017		714,443		$	3.40	6.5		$	214,339

As of June 30, 2017, there were 208,999 restricted stock units (“RSUs”) outstanding, including 10,000 vested and unissued RSUs and 198,999 unvested RSUs. Unrecognized compensation expense related to the remaining unvested RSUs was $173,737 at June 30, 2017, which the Company expects to recognize over a weighted-average remaining service period of 0.6 years.

A summary of the Plan’s RSU activity is as follows:

	Restricted Stock Units (RSU)			Weighted- Average Grant Date Fair Value Per Share
Balance at December 31, 2016		355,499		$	2.41
Granted		10,000			1.75
Exercised		(154,000	)		2.44
Forfeited		(2,500	)		2.46
Balance at June 30, 2017		208,999		$	2.36

Stock-based compensation expense recorded in the condensed statements of operations for the three and six months ended June 30, 2017 and 2016 was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Selling, general and administrative	$	294,591	$	112,043	$	574,174	$	233,593
Research and development		93,103		30,056		181,464		67,790
Cost of revenue		30,243		9,989		58,945		20,753
	$	417,937	$	152,088	$	814,583	$	322,136