Note 6 - Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

NOTE

6.

  STOCKHOLDERS’ EQUITY

Equity Financing

On

June 14, 2017,

the Company completed a concurrent public offering of common stock and private placement of stock purchase warrants to investors, issuing (i)

2,646,091

shares of common stock in the public offering at

$6.875

per share and (ii) stock purchase warrants to purchase

2,646,091

shares of common stock at an exercise price of

$7.50

per share in the private placement, generating total gross proceeds of approximately

$18.2

million. The warrants, exercisable beginning

six

months and

one

day after issuance, have a

10

-year term and are liability classified due to the holders’ right to require the Company to repurchase the warrants for cash upon certain deferred fundamental transactions.

Stock Options

Following is a summary of option activities for the

nine

months ended

September 30, 2018:

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Outstanding, December 31, 2017		1,166,709		$	18.54		7.8	$	90,097
Granted		85,000		$	3.46
Exercised, cancelled or forfeited		(45,000	)	$	6.55
Outstanding, September 30, 2018		1,206,709		$	17.93		7.2	$	66,675
Exercisable, September 30, 2018		1,009,459		$	20.39		6.8	$	-

On

September 13, 2018,

the Company’s shareholders approved the

2018

Incentive Plan (the

“2018

Plan”). The

2018

Plan provides that the Company

may

grant equity interests to employees, consultants and members of the Board of Directors in the form of incentive and nonqualified stock options, restricted stock and restricted stock units, stock appreciation rights and various other forms of stock-based awards.

1,250,000

shares are authorized to be issued pursuant to the

2018

Plan. As of

September 30, 2018,

no

awards have been granted under the

2018

Plan.

Prior to the approval of the

2018

Plan, the Company granted options to employees, directors, advisors, and consultants from

two

former plans – the Old PLx Omnibus Stock Option Plan and the Dipexium

2013

Equity Incentive Plan (the “Prior Plans”). Upon the adoption of the

2018

Plan, the Prior Plans were frozen, and

no

new awards can be issued pursuant to the Prior Plans. The Company is

no

longer authorized to grant awards under these

two

plans. On

April 19, 2017,

the Company completed the Merger with Dipexium and Dipexium had

191,963

fully vested options outstanding as of the date of the Merger that continue to be exercisable.

The Company granted

85,000

options during the

nine

months ended

September 30, 2018

with an aggregate fair value of 

$207,537

calculated using the Black-Scholes model on the grant date. Variables used in the Black-Scholes model include: (

1

) discount rate of

2.6%

to

2.8%,

(

2

) expected life of

6.0

years, (

3

) expected volatility of

76%

to

82%,

and (

4

)

zero

expected dividends.

As of

September 30, 2018,

the Company had

$0.6

million in unamortized expense related to unvested options which is expected to be expensed over a weighted average of

2.1

years.

During the

three

months ended

September 30, 2018

and

2017,

the Company recorded

$247,536

and

$942,040,

respectively, in total compensation expense related to the stock options and stock bonuses. During the

nine

months ended

September 30, 2018

and

2017,

the Company recorded

$765,136

and

$1,348,310,

respectively, in total compensation expense related to the stock options and stock bonuses. Substantially all share-based compensation expense is classified as general and administrative expenses in the accompanying unaudited consolidated statements of operations.