Stockholders’ Equity

Common Stock

May 18, 2018,

the Company completed a public offering

6,475,001

Units and

2,691,666

Pre-Funded Units for a purchase price of

$0.60

per unit, resulting in aggregate gross proceeds of approximately

$5,500,000,

net proceeds of

$4,819,000

after deducting the offering expenses of

$681,000.

Each Unit consists of

one

share of the Company’s Common Stock, and

one

common warrant to purchase

one

share of Common Stock, and each Pre-Funded Unit consists of

one

pre-funded warrant to purchase

one

share of Common Stock and

one

common warrant to purchase

one

share of Common Stock. The common warrants included in the Units and Pre-Funded Units were immediately exercisable at a price of

$0.60

per share of Common Stock, subject to adjustment in certain circumstances, and will expire

five

years from the date of issuance.

As of

June 30, 2018,

all

2,691,666

Pre-Funded units issued in the

May 2018

public offering had been exercised.

March 28, 2018,

the Company sold

609,636

shares of common stock at a price of

$2.27

per share. The net proceeds to the Company from the sale and issuance of the shares, after deducting the offering expenses borne by the Company of approximately

$171,000,

were

$1,213,000.

Additionally, the investors received unregistered warrants in a simultaneous private placement to purchase up to

304,818

shares of common stock. The warrants have an exercise price of

$2.68

per share and shall be exercisable commencing

six

months following the issuance date and have a term of

5.5

years and were accounted for as equity by the Company.

Stock Based Compensation

The Company recorded stock-based compensation of

$163,000

and

$300,000

for the

three

and

six

months ended

June 30, 2018,

and

$181,000

and

$428,000

for the

three

and

six

months ended

June 30, 2017,

respectively.

The following is a summary of option activity for the Company’s stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value

Outstanding at December 31, 2017		1,156,027		$	3.92

Granted		93,500		$	2.63
Forfeited		(21,875	)	$	3.26
Expired		(27,182	)	$	4.67

Outstanding at June 30, 2018		1,200,470		$	3.81		8.4		--

Vested and expected to vest at June 30, 2018		960,726		$	4.02		8.1		--

Exercisable at June 30, 2018		303,348		$	6.26		5.5		--

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock. There were

options exercised during the

six

months ended

June 30, 2018.

The fair value of the Company’s stock options granted for the

six

months ended

June 30, 2018

was estimated using the following weighted-average assumptions:

Expected life (years)	5.6
Risk-free interest rate	2.7	%
Expected volatility	98	%
Dividend yield	0	%

Common Stock Restricted Units

The following is a summary of restricted stock activity during the

six

months ended

June 30, 2018:

			Weighted Average
	Number of Shares		Grant Date Fair Value
Balance at December 31, 2017		416	$	17.60
Granted		--		--
Vested		416		17.60
Forfeited		--		--
Outstanding at June 30, 2018		--		--

Warrants

A summary of warrant activity for the

six

months ended

June 30, 2018

follows:

	Number of Shares		Weighted-Average Exercise Price Per Share
Balance at December 31, 2017		4,828,723	$	9.37
Warrants granted		9,471,485		0.67
Warrants canceled		--		--
Warrants exercised		--		--

Outstanding at June 30, 2018		14,300,208	$	3.61

Exercisable at June 30, 2018		13,296,861	$	3.40

June 30, 2018,

the total intrinsic value of warrants outstanding and exercisable was

$0.