Stockholders' Equity - Common and Preferred Shares

3 Months Ended

Mar. 31, 2015

Equity [Abstract]

Stockholders' Equity - Common and Preferred Shares

2. Stockholders’ Equity — Common and Preferred Shares

Registered Offering of Common Stock and Private Placement of Warrants

March 2015 Registered Offering

On March 25, 2015, the Company closed a financing with institutional investors in which it raised approximately $10,000,000 in gross proceeds or $9,207,000 in net proceeds, after deducting placement agents’ fees and other offering expenses. Investors purchased shares of the Company’s common stock, at a price per share of $1.7125. For each share of common stock purchased, investors received one warrant to purchase one half of a share of the Company’s common stock. A total of 5,839,420 shares of common stock were issued and warrants for the purchase of 2,919,710 shares of common stock were issued. The warrants are exercisable immediately, expire 5 years from the date of issuance, and have an exercise price of $1.7125 per share. Also, in connection with the offering, the Company issued to its placement agent and related persons warrants to purchase 233,577 shares of the Company’s common stock. The warrants issued to the placement agent and related persons are exercisable immediately after issuance, have an exercise price of $2.13 per share and terminate on March 20, 2020.

The warrants contain limitations that prevent each holder of warrants from acquiring shares upon exercise of the warrants that would cause the number of shares beneficially owned by it and its affiliates to exceed 4.99% of the total number of shares of the Company’s common stock then issued and outstanding, provided that, upon prior notice to the Company, a holder may increase or decrease this limitation provided any increase does not exceed 9.99% of the total number of shares of the Company’s common stock then issued and outstanding. In addition, upon certain changes in control of the Company, each holder of a warrant can elect to receive, subject to certain limitations and assumptions, securities in a successor entity. None of the warrants issued on March 25, 2015 have been exercised during the quarter.

Warrants

The following is a summary of the Company’s outstanding common stock warrants as of March 31, 2015 and December 31, 2014:

					Number of warrants (In thousands)
Warrants Issued in Connection with:	Date of Issuance	Warrant Term	Exercise Price		March 31, 2015		December 31, 2014
Private Placement Series A Warrants	04/16/13	5 years	$	3.40		1,460		1,460
Private Placement Series B Warrants *	04/16/13	2 years	$	3.40		757		757
2013 Private Placement Warrants	09/23/13	5 years	$	2.24		—		—
2013 Private Placement Warrants	09/23/13	5 years	$	2.80		147		147
2014 Public Offering Warrants	02/18/14	5 years	$	2.75		1,872		1,872
2014 Public Offering Warrants	02/18/14	5 years	$	2.56		293		293
2014 Private Placement Warrants	05/28/14	5 years & 3 months	$	2.90		2,700		2,700
2014 Private Placement Warrants	05/28/14	5 years & 3 months	$	3.70		216		216
2015 Private Placement Warrants	03/25/15	5 years	$	1.71		2,920		—
2015 Private Placement Warrants	03/25/15	2 years & 3 months	$	2.13		234		—
Total Warrants Outstanding						10,599		7,445

* The Private Placement Series B warrants expired on April 16, 2015.

Options and restricted stock

The Company’s 2005 Stock Plan, as amended (the “2005 Plan”) provides for the award of options, restricted stock and stock appreciation rights to acquire up to 833,333 shares of the Company’s common stock in the aggregate. Currently, the 2005 Plan allows for awards of up to 200,000 shares that may be granted to any one participant in any fiscal year. For options subject to graded vesting, the Company elected the straight-line method of expensing these awards over the service period.

The following is a summary of the Company’s stock option activity under its 2005 Plan for the three months ended March 31, 2015:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)					(Years)		(In thousands)
Options outstanding at December 31, 2014		672		$	3.63		8.49
Granted		25		$	1.74
Forfeited and expired		(8	)	$	3.28
Options outstanding at March 31, 2015		689		$	3.57		8.30	$	—
Options exercisable at March 31, 2015		272		$	4.50		7.06	$	—
Options vested or expected to vest at March 31, 2015		585		$	3.67		8.15	$	—

As of March 31, 2015 there was approximately $560,000 of unrecognized compensation cost related to stock option awards that is expected to be recognized as expense over a weighted average period of approximately 2.5 years.

The fair values for the stock options granted were estimated at the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions for the three months ended March 31, 2015:

Weighted Average Assumptions
Risk-free interest rate	1.47	%
Expected life (years)	4.00
Expected volatility	94.50	%
Dividend yield	0	%