Stock Option Plans, Shares Reserved and Warrants

3 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Plans, Shares Reserved and Warrants

Note 10: Stock Option Plans, Shares Reserved and Warrants

On January 1, 2019, pursuant to the 2009 Equity Incentive Plan the number of shares reserved for the issuance of stock awards increased by 2,364,568 shares. 

On January 30, 2019, the Company granted options to purchase 90,000 shares of common stock to the non-employee directors of the Company under the 2009 Plan with an exercise price of $3.09 per share. The options will vest over a period of one year. These options were valued using the Black-Scholes option pricing model, the expected volatility was approximately 56%, the term was six years, the dividend rate was 0.0 % and the risk-free interest rate was approximately 2.6%, which resulted in a calculated fair value of approximately $152,000.

On January 30, 2019, the Company awarded Restricted Stock Units (“RSUs”) covering 2,349,350 shares of common stock to the officers and employees of the Company under the 2009 Plan; as of the date of grant, the market price of the common stock was $3.09 per share. These RSUs vest in equal amounts each quarter on the determined date over a period of three years from grant date provided that the recipient has continued to provide services to the Company, or earlier upon the occurrence of certain events including a Change in Control of the Company (as defined in the 2009 Plan), or earlier upon the recipient’s separation from service to the Company by reason of death or disability (as defined in the 2009 Plan). The calculated fair value of the RSUs was approximately $7,259,000.

On January 30, 2019, the Company awarded RSUs covering 36,985 shares of common stock to an employee of the Company under the 2009 Plan; as of the date of grant, the market price of the common stock was $3.09 per share. These RSUs were vested in full at grant date. The calculated fair value of the RSUs was approximately $114,000.

The following table summarizes the outstanding stock option activity for the three months ended March 31, 2019:

	2009 Equity Incentive Plan			Weighted Average Exercise Price		Weighted Average Remaining |Contract Life
Outstanding Options as of December 31, 2018		9,298,101		$	4.40		7.92 years
Options Granted		90,000			3.09		9.84 years
Options Exercised		—			—		—
Options Canceled/Expired		(442,223	)		3.31		—
Outstanding Options as of March 31, 2019		8,945,878		$	4.43		6.81 years
Exercisable Options at March 31, 2019		6,653,303		$	4.84		6.18 years

The aggregate intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, multiplied by the number of in-the-money options) of the 8,945,878 and 9,298,101 stock options outstanding at March 31, 2019 and December 31, 2018, respectively, was approximately $0. The aggregate intrinsic value of 6,653,303 and 6,130,337 stock options exercisable at March 31, 2019 and December 31, 2018, was approximately $0. 

The following table summarizes warrants outstanding at March 31, 2019 and December 31, 2018:  

March 31, 2019	Warrant Shares		Exercise Price Per Share		Date Issued	Expiration Date
Old Adamis Warrants		58,824	$	8.50	November 15, 2007	November 15, 2019
Preferred Stock Series A-1Warrants		1,183,432	$	4.10	January 26, 2016	January 26, 2021
Preferred Stock Series A-2 Warrants		192,414	$	2.90	July 11, 2016	July 11, 2021
2016 Common Stock, Private Placement		700,000	$	2.98	August 3, 2016	August 3, 2021
Total Warrants		2,134,670

December 31, 2018	Warrant Shares		Exercise Price Per Share		Date Issued	Expiration Date
Old Adamis Warrants		58,824	$	8.50	November 15, 2007	November 15, 2019
Underwriter Warrants		4,217	$	7.44	January 16, 2014	January 16, 2019
Preferred Stock Series A-1 Warrants		1,183,432	$	4.10	January 26, 2016	January 26, 2021
Preferred Stock Series A-2 Warrants		192,414	$	2.90	July 11, 2016	July 11, 2021
2016 Common Stock, Private Placement		700,000	$	2.98	August 3, 2016	August 3, 2021
Total Warrants		2,138,887

The following table summarizes the RSUs outstanding at March 31, 2019 and December 31, 2018:  

March 31, 2019	RSU Shares			Price Per Share at Grant Date		Date of Grant
Non-Employee Board of Directors		350,000	(1)	$	8.46	May 25, 2016
Company Executives		950,000	(1)	$	3.50	March 1, 2017
Company Executives		228,141	(2)	$	2.83	February 21, 2018
Company Executives and Employees		2,349,350	(3)	$	3.09	January 30, 2019
Total RSUs		3,877,491

(1) The RSUs will fully vest on the seventh anniversary of the date of grant if the recipient has provided continuous service or upon change of control or upon death or disability.

(2) The RSUs vest ratably annually over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability. 

(3) The RSUs vest ratably quarterly over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability.

December 31, 2018	RSU Shares			Price Per Share at Grant Date		Date of Grant
Non-Employee Board of Directors		350,000	(1)	$	8.46	May 25, 2016
Company Executives		950,000	(1)	$	3.50	March 1, 2017
Company Executives		342,212	(2)	$	2.83	February 21, 2018
Total RSUs		1,642,212

(1) The RSUs will fully vest on the seventh anniversary of the date of grant if the recipient has provided continuous service or upon change of control or upon death or disability.

(2) The RSUs vest ratably annually over a period of three years if the recipient has provided continuous service or upon change of control or upon death or disability. 

Expense related to RSUs for the three months ended March 31, 2019 and 2018 was approximately $802,000 and $258,000, respectively. 

At March 31, 2019, the Company has reserved shares of common stock for issuance upon exercise of outstanding options, warrants including all of the warrants in the table above and restricted stock units, as follows:

Warrants	2,134,670
Restricted Stock Units ("RSUs")	3,877,491
2009 Equity Incentive Plan	8,945,878
Total Shares Reserved	14,958,039