Stockholders' Equity

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

6. Stockholders' Equity

Preferred Stock

The Company had designated separate series of its capital stock as of March 31, 2015 and December 31, 2014 as summarized below:

	Number of Shares Issued and Outstanding as of
	March 31, 2015		December 31, 2014		Par Value		Conversion Ratio
Series "A"		-		-	$	0.0001	N/A
Series "C"		1		1		0.0001	1:1
Series “D"		4,725		4,725		0.0001	10:1
Series “D-1"		834		834		0.0001	10:1
Series “F-1"		-		-		0.0001	1:1
Series “H"		439,043		439,043		0.0001	10:1
Series “I”		35,541		35,541		0.0001	20:1
Series “J”		-		-		0.0001	1:1

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Warrants

A summary of warrant activity for the three months ended March 31, 2015 is presented below:

	Warrants		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2014		769,803	$	13.70	$	-		4.03
Issued		-		-		-
Cancelled		-		-		-
Outstanding as of March 31, 2015		769,803	$	13.70	$	-		3.79

All warrants outstanding are exercisable as of December 31, 2014 and March 31, 2015.

Stock Options

On April 3, 2014, pursuant to and subject to the available number of shares reserved under the 2014 Plan, the Company issued 500,000 non-qualified options with a term of five years and an exercise price of $2.86 to Anthony Haynes, the director and Chief Executive Officer of the Company. 50% of the options vested immediately, and the remaining 50% vesting upon the Company’s receipt of gross proceeds of at least $30 million by April 3, 2015 from an offering of its securities (the “Performance Condition”).  Since the Performance Condition was not satisfied by April 3, 2015, 250,000 options were forfeited.  As a result, the Company reversed $0.4 million of option expense related to this grant during the first quarter of 2015.

A summary of option activity under the Company’s employee stock option plan for the three months ended March 31, 2015 is presented below:

	Number of Shares		Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2014		5,243,877	$	4.97	$	-		6.0
Employee options granted		-		-		-		-
Outstanding as of March 31, 2015		5,243,877	$	4.97	$	-		5.8
Options vested and expected to vest		5,243,877	$	4.97	$	-		5.8
Options vested and exercisable		4,943,752	$	5.09	$	-		5.8

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A summary of option activity under the Company’s non-employee stock option plan for the three months ended March 31, 2015 is presented below:

	Number of Shares	Weighted Average Exercise Price		Total Intrinsic Value		Weighted Average Remaining Contractual Life (in years)
Outstanding as of December 31, 2014	55,000	$	5.16	$	-		6.4
Non-employee options granted	-		-		-		-
Outstanding as of March 31, 2015	55,000	$	5.16	$	-		6.2
Options vested and expected to vest	55,000	$	5.16	$	-		6.2
Options vested and exercisable	55,000	$	5.16	$	-		6.2

Stock-based compensation associated with the amortization of stock option expense was approximately $0.1 million and $3.4 million for the three months ended March 31, 2015 and 2014, respectively.  Unamortized compensation cost for these awards amounted to $0.01 million at March 31, 2015, and will be amortized over 0.1 years.

Restricted Stock Awards

On January 5, 2015, the Company issued 2,500 shares of fully vested common shares to an employee.

A summary of the restricted stock award activity for the three months ended March 31, 2015 is as follows:

	Number of Units			Weighted Average Grant Day Fair Value
Nonvested at December 31, 2014		7,500		$	2.63
Vested		(5,000	)		3.01
Nonvested at March 31, 2015		2,500		$	1.35

Stock-based Compensation

Stock-based compensation for the three months ended March 31, 2015 and 2014 was comprised of the following (in thousands):

	For the Three Months Ended March 31,
	2015		2014
Employee restricted stock awards	$	11	$	2
Employee stock option awards		76		3,394
Total compensation expense	$	87	$	3,396