NOTE 9 - STOCKHOLDERS’ EQUITY

SHELF REGISTRATION

In April 2018, we filed a universal shelf registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”) to provide access to additional capital, if needed. Pursuant to the shelf registration statement, we may from time to time offer to sell in one or more offerings shares of our common stock or other securities having an aggregate value of up to $175,000 (which includes approximately $60,000 of unsold securities that were previously registered on our currently effective registration statements). The shelf registration statement relating to these securities became effective on April 16, 2018. As of December 31, 2019, there is $133,438 remaining available under the shelf registration statement.

In June 2018, we completed an underwritten public offering in which we sold an aggregate of 2,375,000 shares of our common stock at a public offering price of $17.50 per share. We realized net proceeds of approximately $38,900 after deducting underwriting discounts and estimated offering expenses.

SHARE REPURCHASE PROGRAM

Pursuant to our stock repurchase plan, we may repurchase up to 450,000 shares of our common stock. We have repurchased a total of 384,000 shares for approximately $5,000 over the life of the plan. Management will periodically assess repurchasing additional shares, depending on our cash position, market conditions, financial covenants and other factors. While the program remains in place, we did not repurchase any shares during 2019 or 2018.

STOCK AND STOCK OPTION PLANS

We have one active equity plan, the 2018 Incentive Award Plan (the “2018 Plan”). The 2018 Plan, approved by our shareholders, is intended to replace our 2009 Equity Incentive Plan, as amended (the “2009 Plan”), however, the terms and conditions of the 2009 Plan will continue to govern any outstanding awards granted thereunder.

Employees and consultants of the Company, its subsidiaries and affiliates, as well as members of our board, are eligible to receive awards under the 2018 Plan. The 2018 Plan provides for the grant of stock options, including incentive stock options (“ISOs”) and nonqualified stock options (“NQSOs”), stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance bonus awards, performance stock unit awards, other stock or cash-based awards and dividend equivalents to eligible individuals. We generally grant stock options with exercise prices equal to the fair market value at the time of grant. The options generally vest over three to four years and are exercisable for a period of five to ten years beginning with the date of grant.

The number of shares available for issuance under the 2018 Plan is equal to the sum of (i) 750,000 shares, (ii) any shares subject to issued and outstanding awards under the 2009 Plan as of the effective date of the 2018 Plan that expire, are cancelled or otherwise terminate following the effective date of the 2019 Plan. In May 2019, our shareholders approved an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance by 600,000 shares. We have 1,756,000 options and RSUs granted and outstanding pursuant to the 2019 Plan as of December 31, 2019.

In December 2019, we offered to exchange certain outstanding options to purchase shares of our common stock previously granted under the 2009 Plan and the 2018 Plan that have an exercise price per share higher than the greater of $8.50 or the closing trading price of our common stock on the offer expiration date (“eligible options”) for new RSUs to be granted under the 2018 Plan. The offer exchange program was approved by our board of directors and by our shareholders earlier in 2019. Under the offer exchange program, every 2.5 shares underlying an eligible option would be exchanged for one new RSU. Upon expiration of the exchange offer in January 2020, we granted 187,000 RSUs in exchange for the cancellation of options to purchase 467,500 shares that were tendered by employees who participated in the offer exchange program.

We use the Black-Scholes option valuation model to value employee stock awards. We estimate stock price volatility based upon our historical volatility. Estimated option life and forfeiture rate assumptions are derived from historical data. For stock-based compensation awards with graded vesting, we recognize compensation expense using the straight-line amortization method.

Total compensation expense recognized in the Consolidated Statements of Comprehensive Loss for stock based awards was $1,990 and $1,565 for 2019 and 2018, respectively.

The following table summarizes the weighted average assumptions used to develop their fair value for the year ending December 31, 2019 and 2018:



	2019			2018
Grant date fair value	$	2.65		$	6.41
Risk-free interest rate	1.25		%	2.81		%
Expected volatility	44		%	45		%
Expected life in years	3.50			4.00
Dividend yield	—			—

As of December 31, 2019, we reserved shares of common stock for future issuance as follows:



Options and RSUs outstanding	1,756,000
Shares available for future grant	387,000
Shares reserved	2,143,000

The following table summarizes activity related to options during the year ended December 31, 2019.



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding at the beginning of the year	1,494,000		$	10.99
Granted	721,000		6.50
Exercised	(143,000	)	5.65
Canceled	(387,000	)	10.17
Outstanding at the end of the year	1,685,000		$	9.71	3.1	$	1,336
Vested and expected to vest	1,424,000		$	9.83	3.0	$	1,052
Exercisable	769,000		$	10.43	2.2	$	350

The total intrinsic value of options exercised during the years ended December 31, 2019 and 2018 was $356 and $276, respectively. As of December 31, 2019, total compensation cost not yet recognized related to nonvested share options was $2,180, which is expected to be recognized over a weighted average period of 2.2 years.

The following table summarizes activity related to RSUs during the year ended December 31, 2019.



	Shares		Weighted Average Grant-Date Fair Value
Outstanding at the beginning of the year	145,000		$	13.73
Granted	29,000		6.88
Released	(61,000	)	13.01
Forfeited	(42,000	)	13.85
Outstanding at the end of the year	71,000		$	11.52

The total fair value of RSUs vested during the years ended December 31, 2019 and 2018 was $430 and $22, respectively. As of December 31, 2019, total compensation cost not yet recognized related to nonvested share options was $540, which is expected to be recognized over a weighted average period of 1.8 years.