EQUITY

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

EQUITY

Common and Preferred Stock

The Company is authorized to issue 150.0 million shares of common stock, $0.01 par value, of which 10,408,264 common shares were issued and outstanding as of June 30, 2016. The Company is authorized to issue 10,000,000 shares of Series A Convertible Preferred Stock, $0.01 par value, 1,000 shares of its 10% Cumulative Perpetual Series B Preferred Stock, $0.01 par value, and 500 shares of its Series C Convertible Preferred Stock, par value $0.01, none of which were issued and outstanding as of June 30, 2016.

As of June 30, 2016, 5,357 shares of common stock were subscribed, and zero shares were held in treasury and reserved for cancellation.

Options

As of June 30, 2016, 1,068,677 options to purchase common stock of the Company were issued and outstanding, additional information about which is included in the following table.

Outstanding		Exercise Price		Issuance Date	Expiration Date	Vesting
	34,640	$	0.06	04/03/15	04/03/25	No
	55,424	$	0.06	09/29/15	09/29/25	No
	70,000	$	0.90	04/13/12	04/13/17	No
	50,000	$	0.90	01/16/13	01/16/18	No
	10,000	$	1.00	03/04/13	03/04/18	No
	219,000	$	1.39	05/09/16	05/09/21	Yes
	4,330	$	1.44	09/29/15	09/29/25	No
	40,000	$	2.20	04/11/14	04/11/19	No
	370,000	$	2.30	02/23/15	02/23/20	No
	93,503	$	3.31	02/16/12	02/16/22	No
	27,276	$	4.62	05/13/15	05/13/25	Yes
	4,330	$	5.49	04/08/15	04/08/25	No
	1,732	$	5.81	03/05/15	03/05/25	No
	33,774	$	5.89	03/23/15	03/23/25	Yes
	8,660	$	12.13	09/17/13	09/17/23	Yes
	21,650	$	12.99	09/06/12	09/05/17	No
	7,038	$	12.99	11/14/12	09/27/22	No
	17,320	$	14.43	01/16/13	11/30/22	No
	1,068,677

Warrants

The Company values all warrants using the Black-Scholes option-pricing model.  Critical assumptions for the Black-Scholes option-pricing model include the market value of the stock price at the time of issuance, the risk-free interest rate corresponding to the term of the warrant, the volatility of the Company’s stock price, dividend yield on the common stock, as well as the exercise price and term of the warrant.  The Black Scholes option-pricing model was the best determinable value of the warrants that the Company “knew up front” when issuing the warrants in accordance with Topic 505. Other than as expressly noted below, the warrants are not subject to any form of vesting schedule and, therefore, are exercisable by the holders anytime at their discretion during the life of the warrant.  No discounts were applied to the valuation determined by the Black-Scholes option-pricing model; provided, however, that in determining volatility the Company utilized the lesser of the 90-day volatility as reported by Bloomberg or other such nationally recognized provider of financial markets data and 40.0%.  

As of June 30, 2016, 110,620 warrants to purchase common stock of the Company were issued and outstanding, additional information about which is included in the following table:

Outstanding		Exercise Price		Issuance Date	Expiration Date	Vesting
	17,320	$	12.99	10/01/13	01/01/18	No
	43,300	$	12.99	07/16/13	07/16/18	No
	25,000	$	3.000	11/01/13	11/01/16	No
	25,000	$	2.000	11/01/13	11/01/16	No
	110,620

Private Placements, Other Issuances and Cancellations

The Company periodically issues shares of its common stock, as well as options and warrants to purchase shares of common stock to investors in connection with private placement transactions, and to advisors, consultants and employees for the fair value of services rendered. Absent an arm’s length transaction with an independent third-party, the value of any such issued shares is based on the trading value of the stock at the date on which such transactions or agreements are consummated. The Company expenses the fair value of all such issuances in the period incurred, with the exception of options that are subject to vesting which are expensed ratably on a monthly basis over the life of the vesting period. During the quarter ended June 30, 2016, the Company issued (i) 5,357 shares of common stock subscribed for services rendered by directors that elected to take their board fees in shares of common stock in lieu of cash payment and recorded an expense of $7,500 for the fair value of services rendered, and (ii) 291,000 common stock purchase options in the aggregate subject to three year vesting to certain key employees consistent with past practice for which in recorded a net expense of $12,372.