Note 10 – Stockholders’ Equity

Capital Stock

Our authorized capital stock consists of 120,000,000 shares consisting of 79,999,997 shares of common stock, $0.01 par value per share, two (2) shares of preferred stock, $0.01 par value per share (which have been redeemed in accordance with their terms and may not be reissued), one (1) share of special stock, $0.01 par value per share, and 40,000,000 shares of a new class of blank-check preferred stock, $0.01 par value per share. As of March 31, 2020 and December 31, 2019, there were 38,239,621 shares and 37,612,465 shares of common stock issued, respectively, and 32,237,528 shares and 31,881,961 shares of common stock outstanding, respectively, with the difference being held in treasury stock.

Warrants

In December 2019, we entered into a Warrant Agreement (the “Warrant Agreement”) with the lender under our Corporate Credit Facility (see Note 5 – Loans Payable and Secured Line of Credit – Corporate Credit Facility) (the “Warrant Holder”) pursuant to which we issued ten-year warrants (the “Warrants”) to the Warrant Holder to purchase up to 7,179,000 shares of our common stock. The Warrants are exercisable immediately and have an exercise price of $6.50 per share (the “Exercise Price”), payable in cash or pursuant to a cashless exercise. The Warrant Agreement provides that we will not issue shares of common stock upon exercise of the Warrants if either (1) the Warrant Holder, together with its affiliates, would beneficially hold 5% or more of the shares of common stock outstanding immediately after giving effect to such exercise, or (2) such exercise would result in the issuance of more than 19.9% of the shares of issued and outstanding common stock as of the date of the Warrant Agreement, prior to giving effect to the issuance of the Warrants, and such issuance would require shareholder approval under the NYSE American LLC listing requirements.

The Warrant Agreement provides for certain adjustments to the Exercise Price and/or the number of shares of common stock issuable upon exercise pursuant to customary anti-dilution provisions. Upon a change of control of the Company, the Warrants will be automatically converted into the right to receive the difference between the consideration the Warrant Holder would have received if it exercised the Warrants immediately prior to the change of control and the aggregate Exercise Price, payable at the election of the Warrant Holder in the consideration payable in the change of control or, if such consideration is other than cash, in cash. The Warrants, which were initially valued at approximately $1.8 million at December 31, 2019, are accounted for under the liability method. These Warrants were valued at approximately $0.6 million at March 31, 2020. The $1.2 million change in fair value of the Warrants was recorded as an unrealized gain in the condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2020.

In connection with the issuance of the Warrants, we also entered into a registration rights agreement with the Warrant Holder, pursuant to which we agreed to register for resale the shares of common stock issuable upon exercise of the Warrants (the “Registration Rights Agreement”), and a letter agreement with the Warrant Holder (the “Letter Agreement”) pursuant to which we agreed to provide (i) certain information rights, (ii) the right to appoint one member of the board of directors of the Company, or in lieu thereof a board observer, and (iii) certain preemptive rights for a period of five years following the exercise of any of the Warrants so long as the Warrant Holder continues to hold shares of common stock. With respect to the board appointment right, the Letter Agreement includes a similar right as the Corporate Credit Facility described in Note 5 - Loans Payable and Secured Line of Credit, so long as the Warrant Holder together with its affiliates beneficially holds at least 5% of the outstanding common stock of the Company, assuming the exercise of all outstanding Warrants; provided that the Warrant Holder does not have such appointment right at any time a Designee or observer may be appointed pursuant to the terms of the Corporate Credit Facility.

At-The-Market Equity Offering Program

In December 2016, we entered into a sales agreement with a broker with respect to an "at-the-market" equity offering program for the sale of up to an aggregate of $12.0 million of our common stock. We have not issued any shares through this program since January 2017 and the sales agreement with our broker expired in June 2019 in accordance with its terms.

Share Repurchase Program

The following table shows the stock repurchase activity by the Company or any “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Exchange Act, by month for the three months ended March 31, 2020:


					Total number of	Approximate Dollar
	Total				Shares Purchased	Value of Shares that
	Number of		Average		As Part of Publicly	May Yet Be Purchased
	Shares		Price Paid		Announced Plans or	Under the Plans or
Period	Purchased		per Share		Programs	Programs

1/1/20 - 1/31/20	1,500		$	3.27	—	$	4,851,330

2/1/20 - 2/29/20	—		$	—	—	$	4,851,330

3/1/20 - 3/31/20	72,214		$	1.71	66,214	$	4,736,220

Quarter ending March 31, 2020 (1)	73,714	(2)	$	1.74	66,214	$	4,736,220	(3)

(1) In December 2019, our Board of Directors approved a share repurchase program under which we can purchase up to $5.0 million of shares of our common stock. Repurchases under the share repurchase program may be made through open market or privately negotiated transactions at times and on such terms and in such amounts as management deems appropriate, subject to market conditions, regulatory requirements and other factors. The share repurchase program is subject to the terms of our Corporate Credit Facility and does not obligate the Company to repurchase any particular amount of common stock, and may be suspended or discontinued at any time without notice.

(2) Includes an aggregate of (i) 7,500 shares purchased by affiliated purchasers of the Company and (ii) 66,214 shares purchased by the Company in the open market under its share repurchase program, 11,279 of which were purchased by the Company in March 2020 and settled in April 2020, which shares are included in net shares outstanding at March 31, 2020.

(3) Since inception of the share repurchase program through March 31, 2020, the Company has repurchased 115,608 shares of common stock for approximately $264,000, or an average price per share of $2.28. As of March 31, 2020, approximately $4.7 million of shares remained available for purchase under the share repurchase program, subject to the terms of our Corporate Credit Facility.

Preferred Stock

We are authorized to issue two shares of preferred stock (one share each of Series A and Series B preferred stock, each of which was automatically redeemed in 2016 and may not be reissued), one share of special stock and 40,000,000 shares of blank-check preferred stock. The share of special stock was issued and sold to Third Avenue Trust, on behalf of Third Avenue Real Estate Value Fund (“Third Avenue”), and enables Third Avenue or its affiliated designee to elect one member of the Board of Directors.