SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2016

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 20: SUBSEQUENT EVENTS 

On January 1, 2017, the number of shares reserved for the issuance of stock awards covered by the 2009 Equity Incentive Plan (Note 18) increased to an aggregate of 9,666,377, after adding 1,099,577 shares.

On January 19, 2017, the Company issued 18,157 shares of common stock to an institutional investor in exchange for the cancellation of warrants to acquire 181,575 shares of common stock. 

On February 7, 2017, the Company granted options to purchase 1,458,000 shares of common stock to the officers and employees of the Company under the 2009 Equity Incentive Plan with an exercise price of $3.15 per share. The options were granted based on a guideline and not for performance during the year ended December 31, 2016 and will vest over a period of three years. These options were valued using the Black-Scholes option pricing model, the expected volatility was approximately 58% and the risk-free interest rate was approximately 2.17%, which resulted in a calculated fair value of $2,551,500. The Board of Directors also approved a total of $465,393 in cash bonus to the Company’s officers and employees with respect to performance during the period ended December 31, 2016. The amount of bonus was paid in February 2017 but was accrued and expensed during the period ended December 31, 2016.

On February 13, 2017, the Company granted options to purchase 398,750 shares of common stock to the employees of the Company under the 2009 Equity Incentive Plan with an exercise price of $3.35 per share. The options were granted based on a guideline and not for performance during the year ended December 31, 2016 and will vest over a period of three years. These options were valued using the Black-Scholes option pricing model, the expected volatility was approximately 58% and the risk-free interest rate was approximately 2.24%, which resulted in a calculated fair value of $744,221.

On February 28, 2017, the Company granted a stock option to purchase 210,000 shares of common stock to a newly hired officer of the Company under the 2009 Equity Incentive Plan with exercise price of $3.45 per share. The options will vest with respect to the one-third (1/3) of the option shares on the date that is one year after the grant date of the option and one thirty-sixth (1/36) of the option shares thereafter on each subsequent monthly anniversary of the vesting commencement date, so that the option is exercisable in full over a period of three years. The option was valued using the Black-Scholes option pricing; the expected volatility was approximately 58%, the term was six years, the dividend rate was 0.0% and the risk-free interest rate was approximately 2.19%. The calculated fair value of the options was $403,200. 

On March 1, 2017, the Company awarded Restricted Stock Units ("RSUs") covering 950,000 shares of common stock to certain officers of the Company under the 2009 Plan; as of the date of grant, the market price of the common stock was $3.50 per share. These RSUs vest on the seventh anniversary from grant date provided that the recipient has continued to provide services to the Company, or earlier upon the occurrence of certain events including a change of control of the Company. The calculated fair value of the RSUs was $3,325,000. 

 In March 2017, 625,013 shares of Series A-2 Convertible Preferred were converted into shares of common stock at a 1:1 ratio, with 0 shares of Series A-2 Preferred Shares remaining outstanding.

In March 2017, the maturity date of the Adamis Working Capital Line of  $2.0 million was amended to March 1, 2018.