Stockholders' Equity / (Deficit)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Stockholders' Equity / (Deficit)

Note 12- Stockholders’ Equity / (Deficit)

Authorized Share Capital

The Company amended its articles of incorporation on January 9, 2019 to increase the authorized share capital to 400 million shares of common stock.

Series X Convertible Preferred Shares

The Company had 0 and 1,000,000 shares, par value $0.0001, of series X Convertible Preferred Shares, issued and outstanding at March 31, 2019 and December 31, 2018, respectively. Series X Convertible Preferred shares have the rights to receive dividends or any distributions on a “as-converted basis’ and also each series X Convertible Preferred stockholder held the right to 1 vote relative to each stockholder of common stock, on a “as-converted basis”. Each series X Convertible Preferred share is convertible into 15 shares of common stock. On February 28, 2019, the 1,000,000 series X Preferred Shares automatically converted into 15,000,000 shares of Common Stock.

Common Stock

In March 2019, the Company raised $1.1 million in a private placement transaction by issuing 93,910 shares of its common stock for $11.28 per share to a Hong Kong-based family office group. The Company contemporaneously issued warrants to purchase an additional 200,000 shares of common stock to the investor in this transaction. The warrants feature an exercise price of $11.31 per share, and may be exercised at any time prior to March 31, 2020. The warrants were determined to be equity instruments and are therefore classified within stockholders’ equity in accordance with ASC 815.

The Company raised an additional $0.7 million through issuances of an aggregate of 284,188 shares of its common stock in a private placement transactions during the three months ended March 31, 2019 to several other investors.

During the three months ended March 31, 2019, the Company issued 18,935 shares of its common stock, at a fair value of approximately $0.1 million or $6.90 per share, to settle a lease dispute.

Stock Options

The Company has adopted the 2014 Equity Incentive Stock Plan (the “Plan”). The Plan provides for the issuance of up to 166,667 incentive stock options and nonqualified stock options to the Company’s employees, officers, directors, and certain consultants. The Plan is administered by the Company’s Board, and has a term of 10 years.

The Company has valued the options at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the options’ term, exercise price, current stock price, risk-free interest rate estimated over the expected term and estimated volatility of our stock over the expected term of the options. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options as calculated using the simplified method. The estimated volatility was determined based on the historical volatility of our common stock.

The Company did not grant stock options during the three months ended March 31, 2019.

A summary of option activity under the Company’s employee stock option plan for the three months ended March 31, 2019 is presented below:

	Number of  Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2018		16,667	$	28.20	$	-		9.1
Outstanding as of March 31, 2019		16,667	$	28.20	$	-		8.8
Options exercisable as of March 31, 2019		16,667	$	28.20	$	-		8.8

There was no stock-based compensation expense recognized during the three months ended March 31, 2019. Stock-based compensation expense recognized for the three months ended March 31, 2018 was approximately $0.5 million associated with stock based payment awards issued to non-employee service providers.

As of March 31, 2019, there was no unrecognized stock-based compensation expense.

Warrants

A summary of the Company’s outstanding warrants as of March 31, 2019 are presented below:

	Number of Warrants		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2018		7	$	24,000	$	-		2.9
Issued		200,000		11.31		-		1.0
Outstanding as of March 31, 2019		200,007	$	12.15	$	-		1.0
Warrants exercisable as of March 31, 2019		200,007	$	12.15	$	-		1.0