Stock Authorization And Issuance

12 Months Ended

Dec. 31, 2016

Stock Authorization And Issuance [Abstract]

Stock Authorization And Issuance

11. STOCK AUTHORIZATION AND ISSUANCE 

Preferred Stock

We have 15,000,000 shares of preferred stock authorized for issuance at the direction of the board of directors.  On November 17, 2005, our board of directors designated 100,000 shares of authorized preferred stock as the Series E Preferred Stock in conjunction with its adoption of a Shareholder Protection Rights Agreement (Note 12).  As of December 31, 2016, we had no outstanding preferred stock. 

Common Stock

On March 29, 2016, we effected a one-for-ten reverse stock split of our common stock, and our common stock began trading on the NASDAQ capital market on a post-split basis at the open of business on March 30, 2016. As a result of the reverse stock split, every ten shares of our common stock was combined into one share of our common stock.  No fractional shares of our common stock were issued in connection with the reverse stock split.  Any fractional shares created as a result of the reverse stock split were rounded up to the next largest whole number.  The par value and other terms of our common stock were not affected by the reverse stock split.  However, the number of shares of common stock that we are authorized to issue was proportionately reduced from 150,000,000 shares to 15,000,000.

On August 17, 2016, we amended our articles of incorporation to increase the number of authorized shares of common stock from 15,000,000 to 20,000,000 shares.  This amendment was approved by our shareholders on August 12, 2016.

Common Stock Warrants

As of December 31, 2016, we had outstanding warrants for the purchase of up to 420,000 shares of our common stock.  The estimated grant date fair value of these warrants of $826,006 is included in shareholders’ (deficit) equity in our consolidated balance sheets.  The outstanding warrants have an average exercise price of $2.21 per share and a weighted average remaining life of approximately four years.  Cash received from warrant exercises for the years ended December 31, 2016, 2015, and 2014, was $422,500,  $0, and $546,084, respectively. 

Stock and Warrant Issuances

The following table presents a summary of completed equity offerings for the years ended December 31, 2016, 2015, and 2014 (in thousands, except for per share amounts):

Date	Transaction	# of Common Shares/ Units Sold (in 000’s)	Price per Share/Unit	# of Warrants Issued (in 000’s)	Average Exercise Price per Warrant	Net Proceeds (in 000’s) (1)		Offering as % of Out-standing Common Stock (2)
July 7, 2016	Offering sold to an in individual investor (3)	1,091	$2.75	-	-	$	2,860	8.50%
January 25, 2016	Offering sold to an in individual investor	455	$2.20	-	-	$	990	4.00%
December 23, 2015	Offering to a limited number of institutional and other investors (4)	1,086	$1.90	n/a	n/a	$	2,040	9.90%
December 23, 2015	Offering to a member of our Board	21	$2.40	n/a	n/a	$	50	0.20%
January 15, 2015, as modified in July 2016	Sale of warrants (5)	n/a	n/a	200	$3.25	$	1,300	n/a
March 13, 2014	Offering to two institutional investors	267	$45.00	n/a	n/a	$	11,900	2.80%

⁽¹⁾ After deduction of applicable underwriters’ discounts, placement agent fees, and other offering costs.

⁽²⁾ Calculated on an after-issued basis. 

⁽³⁾ We filed a registration statement in July 2016 to register the resale of common stock issued in this offering.  The registration statement was declared effective on August 2, 2016 (File No. 333-212670).  Warrants issued to BKI in connection with a litigation funding arrangement were registered under this same registration statement (see Note 8).

⁽⁴⁾ We filed a registration statement in January  2016 to register the resale of common stock issued in this offering. Theregistration statement became effective on January 19, 2016 (File No. 333-208958). 

⁽⁵⁾ We sold three warrants to an investor on January 15, 2015, each for the purchase of 188,406 shares of common stock at exercise prices of $15,  $25 and $35, respectively.  In July 2016, we exchanged these warrants for one new warrant entitling the investor to acquire up to 200,000 shares of our common stock at an exercise price of $3.25 per share.  The warrant expires in June 2018. As a result of this warrant exchange, the number of shares of our common stock subject to warrants decreased by 365,218 shares and we recognized incremental compensation cost of approximately $103,000 which is included in share-based compensation expense in the accompanying consolidated statement of comprehensive loss. We filed a post-effective amendment to the previously filed S-3 registration statement (File No. 333-202802) covering the resale of the shares issuable upon exercise of the warrants.  This post-effective amendment was declared effective on August 3, 2016.

On November 14, 2016, we filed a Shelf for the offering of various securities, up to $15 million, over a period of up to three years.  The Shelf, which was declared effective November 30, 2016, is intended to provide flexibility for our future capital needs and may be used to fund working capital, capital expenditures, vendor purchases, and other capital needs.  On December 30, 2016 we entered into an ATM with FBR for the sale of up to $10 million of our common stock registered under the Shelf. 

As of March 10, 2017, we have sold an aggregate of 4.1 million shares of common stock under the ATM at an average price of $2.46 per share for aggregate gross proceeds of approximately $10 million, thus concluding our ATM.   In February 2017, we also received gross proceeds of approximately $170,000 from the sale of 80,510 unregistered shares of our common stock to one of our directors.

Stock for Services

On September 1, 2016, we issued 45,000 shares of unregistered common stock to an outside consultant in exchange for a $120,000 prepaid retainer for executive consulting and advisory services.  On April 12, 2016, we issued 200,000 shares of unregistered common stock to an outside consultant in exchange for a $310,000 prepaid retainer for consulting services. We have no registration obligation with respect to these shares.

In January 2015, we issued 25,000 shares of unregistered common stock to our securities counsel, Graubard Miller in exchange for a $250,000 prepaid retainer for legal services.  The shares issued to Graubard Miller were registered on a S-3 registration statement (File number 333-202802) that was declared effective May 4, 2015.