XML 23 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Stockholders' Equity
9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]  
Stockholders' Equity
Stockholders’ Equity
 
Common Stock
 
During the nine months ended September 30, 2016, the Company issued a total of 861,539 shares of Common Stock. The Company received gross proceeds of approximately $2.4 million from the sale of 421,810 shares of its common stock at a weighted average price of $5.61 under the agreement with Cantor Fitzgerald & Co. (“Agent”). In addition, 98,396 shares were issued upon exercise of options for a weighted average price of $3.73, and 341,333 shares were issued upon net exercise of 1,236,875 options at a weighted average exercise price of $3.81.
 
Stock Options
 
Stock-based compensation expense related to Trovagene equity awards have been recognized in operating results as follow:
 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
2016
 
2015
 
2016
 
2015
Included in research and development expense
$
872,792

 
$
342,122

 
$
1,862,069

 
$
1,054,443

Included in cost of revenue
42,639

 
7,518

 
99,164

 
22,468

Included in selling and marketing expense
476,865

 
225,892

 
1,493,744

 
480,006

Included in general and administrative expense
437,075

 
348,127

 
2,487,415

 
1,201,929

Total stock-based compensation expense
$
1,829,371

 
$
923,659

 
$
5,942,392

 
$
2,758,846


 
The unrecognized compensation cost related to non-vested stock options outstanding at September 30, 2016 and 2015, net of expected forfeitures, was $10,416,565 and $10,308,131, respectively, both to be recognized over a weighted-average remaining vesting period of approximately three years. The weighted average remaining contractual term of outstanding options as of September 30, 2016 was approximately eight years.

The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions during the following periods indicated:
 
 
Nine Months Ended
September 30,
 
2016
 
2015
Risk-free interest rate
1.48
%
 
1.77
%
Dividend yield
0
%
 
0
%
Expected volatility
103
%
 
76
%
Expected term
5.5 years

 
6.1 years


 
A summary of stock option activity and changes in stock options outstanding is presented below:
 
 
Total Options
 
Weighted Average
Exercise Price
Per Share
 
Intrinsic
Value
Balance outstanding, December 31, 2015
6,948,630

 
$
5.45

 
$
5,903,466

Granted
3,234,750

 
5.02

 
 

Exercised
(1,335,271
)
 
3.81

 
 

Canceled / Forfeited
(2,690,146
)
 
5.44

 
 

Expired
(106,777
)
 
11.14

 
 

Balance outstanding, September 30, 2016
6,051,186

 
5.49

 
1,724,990

Exercisable at September 30, 2016
2,287,028

 
5.13

 
1,325,134


 
During the nine months ended September 30, 2016, the Company had issued 996,000 options to its executive officers and non-employee directors that were over the authorized number of shares available in the Trovagene 2014 Equity Incentive Plan (2014 EIP) and were subject to shareholder approval. As per ASC Topic 815-40, the options were accounted for as liabilities and recorded at fair value with the changes in fair value being recorded in the Company’s condensed consolidated statements of operations. Stockholder approval was obtained on May 17, 2016 to increase the number of authorized shares in the 2014 EIP from 5,000,000 to 7,500,000. Accordingly, the options were remeasured as of the date of stockholder approval with the change recorded in stock based compensation expense and the $217,333 liability was reclassified to additional paid in capital. As of September 30, 2016 there were 2,346,478 shares available for issuance under the 2014 EIP.



Restricted Stock Units

Under guidance provided by ASC Topic 718 “Compensation—Stock Compensation” for share-based payments, the fair value of our restricted stock units is based on the grant date fair value of our common stock. All restricted stock units were granted with no purchase price. Vesting of the restricted stock units is generally subject to service conditions, while vesting of certain units are based on attainment of specific performance objectives. The weighted-average grant date fair value of the restricted stock units was $4.06 per share during the nine months ended September 30, 2016. There were no restricted stock units granted during the year ended December 31, 2015.

A summary of the restricted stock unit activity is presented below:
 
Number of Shares
 
Weighted Average
Grant Date Fair Value
Per Share
Non-vested restricted stock units outstanding, December 31, 2015

 
$

Granted
402,000

 
4.06

Forfeited
(10,000
)
 
3.99

Non-vested restricted stock units outstanding, September 30, 2016
392,000

 
4.06


None of the restricted stock units vested during the nine months ended September 30, 2016. At September 30, 2016, total unrecognized compensation cost related to non-vested restricted stock units was $537,134, which is expected to be recognized over a weighted-average period of three months.

Warrants
 
A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below:
 
 
Total Warrants
 
Weighted Average
Exercise Price
Per Share
 
Weighted Average
Remaining Contractual
Term
Balance outstanding, December 31, 2015
5,533,242

 
$
3.86

 
2.50
Granted
30,992

 
4.84

 
 
Expired
(50,000
)
 
8.00

 
 
Balance outstanding, September 30, 2016
5,514,234

 
3.82

 
1.85