Quarterly report pursuant to Section 13 or 15(d)

Stock Options and Warrants (Tables)

v3.10.0.1
Stock Options and Warrants (Tables)
9 Months Ended
Sep. 30, 2018
Stock Options and Warrants [Abstract]  
Schedule of stock-based award activity
                Weighted        
          Weighted     Average        
          Average     Remaining     Aggregate  
          Exercise     Contractual     Intrinsic  
    Options     Price     Life     Value  
Balance, December 31, 2017     668,607     $ 6.21       7.38     $  
Forfeited or granted during 2018     (77,826 )     15.18              
Balance, September 30, 2018     590,781     $ 5.03       6.53     $  
Exercisable on September 30, 2018     453,947     $ 5.73       5.97     $  
Schedule of information about stock options outstanding and exercisable
    Options Outstanding     Options Exercisable  
          Weighted                    
          Average     Weighted           Weighted  
    Number     Remaining     Average     Number     Average  
    of     Contractual     Exercise     of     Exercise  
Exercise Prices   Shares     Life     Price     Shares     Price  
          (In years)                    
$0–$10.00     514,008       7.05     $ 3.34       377,563     $ 3.57  
$10.01–$15.00     26,300       5.24     $ 12.50       25,911     $ 12.50  
$15.01–$20.00     41,845       1.58     $ 17.50       41,845     $ 17.50  
$20.01–$25.00     8,628       3.80     $ 22.61       8,628     $ 22.61  
      590,781       6.53     $ 5.03       453,947     $ 5.73  
Schedule of stock-based compensation expense
   

Three Months Ended

September 30,

   

Nine Months Ended

September 30,

 
    2018     2017     2018     2017  
Research and development   $ 46,000     $ 65,000     $ 143,000     $ 368,000  
General and administrative     40,000       70,000       191,000       421,000  
    $ 86,000     $ 135,000     $ 334,000     $ 789,000  
Schedule of warrants outstanding activity

          Weighted  
    Number     Average  
    of     Exercise  
    Shares     Price  
Balance outstanding at December 31, 2017     6,084,603     $ 3.38  
Expired     (36,723 )     28.48  
Issued for 2018 Senior Notes     355,551       1.50  
Issued for June 2018 Senior Notes     878,889       0.30  
Balance outstanding at September 30, 2018     7,282,320     $ 2.79  
Schedule of warrants outstanding
   

Issue

Date

 

Expiry

Date

 

Number of

Warrants

   

Exercise

Price

per Share

 
2013 Services Warrants—November   Nov-13   Nov-18     2,400       50.00  
2014 Services Warrants—April(1)   Apr-14   Apr-19     13,657       39.00  
2014 Services Warrants—September(2)   Aug-14   Aug-19     16,000       25.00  
2014 Services Warrants—November(3)   Nov-14   Nov-18     6,500       25.00  
2014 Settlement Warrants—December(4)   Dec-14   Dec-19     38,464       25.00  
2015 Senior Notes Warrants(5)(13)   Apr/May-15   Apr/May-20     219,785       3.00  
2015 Services Warrants—May(6)   May-15   May-20     5,514       12.50  
2015 LOC Guarantee Warrants—November(7)   Nov-15   Nov-20     74,000       3.00  
2015 Debt Amendment Warrants—December(8)(14)   Dec-15   Dec-20     50,000       3.00  
2015 PIPE Warrants—December(9)   Dec-15   Dec-20     312,500       4.00  
2016 Debt Amendment Warrants—February(10)(14)   Feb-16   Feb-21     50,000       3.00  
2016 Debt Amendment Warrants—March(11)(14)   Mar-16   Mar-21     500,000       3.00  
2016 Convertible Unsecured Notes Warrants (12)   Sep–Dec-16   Sep–Dec-21     312,499       3.00  
2016 Senior Notes Warrants   Dec-16   Dec-21     3,720,839       3.00  
2017 Convertible Unsecured Notes Warrants (12)   Jan-17   Jan-22     62,500       3.00  
2017 Backstop Warrants   Apr-17   Apr-22     41,000       3.00  
2017 Senior Notes Warrants   Sep/Nov/Dec-17   Sep/Nov/Dec-22     622,222       1.50  
2018 Senior Notes Warrants   Jan/Mar-18   Jan/Mar-23     355,551       1.50  
June 2018 Senior Notes Warrants   Jun-18   Jun-23     878,889       0.30  
Warrants outstanding and exercisable at September 30, 2018             7,282,320     $ 2.79  

   

(1) The 2014 Services Warrants—April were issued for fees incurred in conjunction with the issuance of convertible notes in 2014. The warrants were valued on the issuance date at $11.50 per share in conjunction with the valuation approach used for the initial valuation of the warrants issued in connection with the convertible notes issued in 2014.
   
(2) The 2014 Services Warrants—September were issued to a consultant in exchange for advisory services with no readily available fair value. The warrants were originally issued at an exercise price of $39.00 per share and had a one-time price reset provision to the exercise price of the warrants issued to investors in the convertible notes offering in April 2014 if the exercise price of such convertible notes warrants changed prior to September 30, 2014. On September 22, 2014, the exercise price was changed to $25.00 per share. There are no further exercise price changes for this warrant series. The warrants were valued using the Black-Scholes option pricing model at $131,000 on the issuance date with an additional $6,000 recorded to expense on September 22, 2014 to reflect the change in fair value resulting from the exercise price change.

   

(3) On November 26, 2014, the Company issued warrants to purchase up to 6,500 shares of common stock with an exercise price of $25.00 per share for compensation for investor relations services provided. The warrants were valued using the Black-Scholes option pricing model at $43,000 on the issuance date.

  

(4) On December 1, 2014, the Company issued warrants to purchase up to 19,232 shares of common stock with an exercise price of $39.00 per share and on December 15, 2014 issued warrants to purchase up to 19,232 shares of common stock with an exercise price of $25.00 per share to settle potential legal disputes resulting from claims made by the investors in the November 2013 private equity placement. The warrants issued on December 1, 2014 were issued concurrent with the issuance of 8,462 shares of the Company’s common stock in partial settlement of the potential legal disputes arising from claims by two investors. The Company settled all remaining potential legal disputes with all of the remaining investors in the November 2013 private placement on December 15, 2014 by issuing the second tranche of warrants and setting the exercise price of each warrant series issued at $25.00 with no further reset provisions. The combined issuance of the warrants and expense resulting from any price changes were valued using the Black-Scholes option pricing model at $246,000 and expensed to general and administrative expense.
   
(5) On April 23, 2015, the Company issued warrants to purchase up to 136,267 shares of common stock and on May 7, 2015, the Company issued warrants to purchase up to 83,518 shares of common stock, each with an exercise price of $12.50 per share in conjunction with the issuance of the 2015 Senior Notes. The warrants were valued using the Black-Scholes option pricing model at $2,139,000 on the issuance date. On August 24, 2016, the exercise price of the warrants was reduced to $4.00 per share. Concurrent with the issuance of the 2016 Senior Notes, the exercise price of the warrants was further reduced to $3.00 per share.
   
(6) On May 1, 2015, the Company issued warrants to purchase up to 5,514 shares of common stock with an exercise price of $12.50 per share in conjunction with placement agent services for the Company’s May 2015 private equity placement. The warrants were valued using the Black-Scholes option pricing model at $56,000 on the issuance date.

 

(7) On November 2, 2015, the Company issued warrants to purchase up to 74,000 shares of common stock with an exercise price of $15.00 per share in conjunction with the Letter of Credit described in Note 15. The warrants were valued using the Black-Scholes option pricing model at $246,000 on the issuance date. The warrants are exercisable beginning on November 1, 2016. On April 2017, the exercise price was reduced to $3.00 per share as a term of an amendment to the backstop security.

 

(8) On December 30, 2015, the Company issued warrants to purchase up to 50,000 shares of common stock with an initial exercise price of $12.50 per share in conjunction with an amendment of the 2015 Senior Notes in December 2015. On September 30, 2016, concurrent with the issuance of the March 2016 Warrants, the exercise price was reduced to $5.00 per share. On August 24, 2016, the exercise price of the warrants was reduced to $4.00 per share. Concurrent with the issuance of the 2016 Senior Notes, the exercise price of the warrants was further reduced to $3.00 per share.
   
(9) On December 31, 2015, the Company issued warrants to purchase up to 312,500 shares of common stock with an initial exercise price of $5.00 per share in conjunction with the December private equity placement (the “December PIPE”). The warrants initially provided that if, prior to the earlier of September 30, 2016 or thirty days after the date on which the December PIPE shares and underlying warrants are registered for resale, the Company issued common share derivative securities at a price per share less than $5.00 per share, the Company was obligated to reduce the exercise price of the December PIPE warrants to a price per share equal to the newly issued shares or derivative common stock securities. This price protection clause expired on September 30, 2016. On August 24, 2016, the exercise price of the warrants was reduced to $4.00 per share.

    

(10) On February 2, 2016, the Company issued warrants to purchase up to 50,000 shares of common stock with an initial exercise price of $12.50 per share in conjunction with an amendment of the 2015 Senior Notes in December 2015. The warrants were valued using the Black-Scholes option pricing model at $148,000 on the issuance date and were recorded as a derivative liability and additional debt discount. The warrants provided that, in the event that the Company issued additional common stock derivative securities at a price per share less than the exercise price, the Company was obligated to reduce the exercise price of the February 2016 Warrants to a price per share equal to the newly issued shares or derivative common stock securities. On March 31, 2016, concurrent with the issuance of the additional debt amendment warrants, the exercise price was reduced to $5.00 per share. This price protection clause expired on September 30, 2016. On August 24, 2016, the exercise price of the warrants was reduced to $4.00 per share.  Concurrent with the issuance of the 2016 Senior Notes, the exercise price of the warrants was further reduced to $3.00 per share.
   
(11) On March 31, 2016, the Company issued warrants to purchase up to 500,000 shares of common stock with an initial exercise price of $5.00 per share in conjunction with an amendment of the 2015 Senior Notes in December 2015. The warrants were valued using the Black-Scholes option pricing model at $1,497,000 on the issuance date and were recorded as a derivative liability and additional debt discount. The warrants provided that, in the event that the Company issued additional common stock derivative securities at a price per share less than the exercise price, the Company was obligated to reduce the exercise price of the March 2016 Warrants to a price per share equal to the newly issued shares or derivative common stock securities. This price protection clause expired on September 30, 2016. On August 24, 2016, the exercise price of the warrants was reduced to $4.00 per share. Concurrent with the issuance of the 2016 Senior Notes, the exercise price of the warrants was further reduced to $3.00 per share.
   
(12) On September 1, 2016, the Company issued warrants to purchase up to 124,999 shares of common stock with an initial exercise price of $4.00 per share in conjunction with Unsecured Convertible Notes as described in Note 8 above. The warrants were valued using the Black-Scholes option pricing model at $271,000 on the issuance date and were recorded as additional debt discount. Between November 1, 2016 and December 31, 2016, the Company issued additional warrants to purchase up to 187,500 shares of common stock, as described above. The additional warrants were valued using the Black-Scholes option pricing model at $305,000 and were recorded as additional debt discount. Concurrent with the issuance of the 2016 Senior Notes, the exercise price of the warrants issued on November 1, 2016 was reduced to $3.00 per share. The warrants issued on December 1, 2016, December 31, 2016, and January 30, 2017 were issued with an initial exercise price of $3.00 per share.  On January 30, 2017 the Company issued warrants to purchase up to 62,500 shares of common stock with an exercise price of $3.00 per share
   
(13) Warrant exercise price was reduced from $12.50 to $4.00 per share on August 24, 2016 and further reduced to $3.00 per share concurrent with the issuance of the 2016 Senior Notes.
   
(14) Warrant exercise price was reduced from $5.00 to $4.00 per share on August 24, 2016 and further reduced to $3.00 per share concurrent with the issuance of the 2016 Senior Notes. On August 24, 2016, the warrant agreement was amended to remove all provisions that had previously required derivative liability accounting treatment.