Stockholders' Equity

12 Months Ended

Dec. 31, 2016

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

During the year ended December 31, 2014, the Company issued a total of 13,011 shares of common stock upon the net exercise of warrants at a weighted-average exercise price of $3.00.

During the year ended December 31, 2015, the Company issued a total of 10,821,808 shares of common stock. The Company received gross proceeds of approximately $63.2 million from the sale of 9,711,110 shares of its common stock through underwritten public offerings in February 2015 and July 2015. The Company also received gross proceeds of approximately $2.8 million from the sale of 285,421 shares of its common stock at a weighted-average price of $9.66 under the agreement with the Agent. In addition, 265,166 shares were issued upon exercise of options for a weighted-average price of $3.25, 282,975 shares were issued upon exercise of warrants for a weighted-average price of $4.91, and 277,136 shares were issued upon net exercise of 449,403 warrants at a weighted-average exercise price of $3.05.

During the year ended December 31, 2016, the Company issued a total of 959,190 shares of common stock. The Company received gross proceeds of approximately $2.4 million from the sale of 421,810 shares of its common stock at a weighted-average price of $5.61 under the agreement with the Agent. In addition, 98,396 shares were issued upon exercise of options for a weighted-average price of $3.73, 341,333 shares were issued upon net exercise of 1,236,875 options at a weighted average exercise price of $3.81, 2,651 shares were issued upon net exercise of 8,333 warrants at a weighted-average exercise price of $3.00, and 95,000 shares were issued upon vesting of restricted stock units.

Warrants

A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications, is presented below:

	Number of Warrants		Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Term
Balance outstanding, December 31, 2013	6,233,483		$	3.87	4.5
Granted	85,470		$	3.51
Exercised	(36,666	)	$	3.00
Expired	(16,667	)	$	10.80
Balance outstanding, December 31, 2014	6,265,620		$	3.85	3.6
Exercised	(732,378	)	$	3.77
Balance outstanding, December 31, 2015	5,533,242		$	3.86	2.5
Granted	30,992		$	4.84
Exercised	(8,333	)	$	3.00
Expired	(50,000	)	$	8.00
Balance outstanding, December 31, 2016	5,505,901		$	3.83	1.6

The Company issued warrants to purchase 85,470 shares of common stock at an exercise price of $3.51 per share during the year ended December 31, 2014. The warrants were issued in connection with a $15.0 million debt agreement. The estimated fair value of the warrants was determined on the date of grant using the Black-Scholes option valuation model using the following assumptions: a risk-free interest rate of 2.53%, dividend yield of 0%, expected volatility of 73.8% and expected term of ten years. The resulting fair value of $235,857 was recorded as a debt discount and was amortized to interest expense over the term of the loan using the effective interest method. In July 2016, the debt was refinanced in accordance with the fifth amendment to the debt agreement. The unamortized debt discount was amortized to interest expense over the new term of the loan using the effective interest method.

The Company issued warrants to purchase 30,992 shares of common stock at an exercise price of $4.84 per share during the year ended December 31, 2016. The warrants were issued in connection with the fifth amendment to the debt agreement. The estimated fair value of the warrants was determined on the date of grant using the Black-Scholes option valuation model using the following assumptions: a risk-free interest rate of 1.59%, dividend yield of 0%, expected volatility of 130.66% and expected term of ten years. The resulting fair value of $148,885 was recorded as a debt discount and was amortized to interest expense over the new term of the loan using the effective interest method.

Series A Convertible Preferred Stock

The material terms of the Series A Convertible Preferred Stock consist of:

1) Dividends. Holders of the Company’s Series A Convertible Preferred Stock are entitled to receive cumulative dividends at the rate per share of 4% per annum, payable quarterly on March 31, June 30, September 30 and December 31, beginning with September 30, 2005. Dividends are payable, at the Company’s sole election, in cash or shares of common stock. As of December 31, 2016, 2015, and 2014, the Company had $292,535, $268,295, and $244,055, respectively in accrued cumulative unpaid preferred stock dividends, included in accrued liabilities in the Company’s consolidated balance sheets, and $24,240, $24,240, and $23,015 of accrued dividends was recorded during the years ended December 31, 2016, 2015, and 2014, respectively.

2) Voting Rights. Shares of the Series A Convertible Preferred Stock have no voting rights. However, so long as any shares of Series A Convertible Preferred Stock are outstanding, the Company may not, without the affirmative vote of the holders of the shares of Series A Convertible Preferred Stock then outstanding, (a) adversely change the powers, preferences or rights given to the Series A Convertible Preferred Stock, (b) authorize or create any class of stock senior or equal to the Series A Convertible Preferred Stock, (c) amend its certificate of incorporation or other charter documents, so as to affect adversely any rights of the holders of Series A Convertible Preferred Stock or (d) increase the authorized number of shares of Series A Convertible Preferred Stock.

3) Liquidation. Upon any liquidation, dissolution or winding-up of the Company, the holders of the Series A Convertible Preferred Stock are entitled to receive an amount equal to the Stated Value per share, which is currently $10 per share plus any accrued and unpaid dividends.

4) Conversion Rights. Each share of Series A Convertible Preferred Stock is convertible at the option of the holder into that number of shares of common stock determined by dividing the Stated Value, currently $10 per share, by the conversion price, originally $2.15 per share.

5) Subsequent Equity Sales. The conversion price is subject to adjustment for dilutive issuances for a period of 12 months beginning upon registration of the common stock underlying the Series A Convertible Preferred Stock. The relevant registration statement became effective on March 17, 2006 and during the following twelve month period the conversion price was adjusted to $9.60 per share.

6) Automatic Conversion. If the price of the Company’s common stock equals $25.80 per share for 20 consecutive trading days, and an average of 8,333 shares of common stock per day are traded during the 20 trading days, the Company will have the right to deliver a notice to the holders of the Series A Convertible Preferred Stock, requesting the holders to convert any portion of the shares of Series A Convertible Preferred Stock into shares of common stock at the applicable conversion price. As of the date of these financial statements, such conditions have not been met.

As of each of December 31, 2016, 2015, and 2014, there were 60,600 shares of Series A Convertible Preferred Stock outstanding.