Annual report pursuant to Section 13 and 15(d)

Note 16 - Equity Instruments

v3.19.1
Note 16 - Equity Instruments
 12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
1
6
.
Equity Instruments
 
 
a.
Common Stock Issued:
During
September 2018,
the Company entered into a Stock Purchase Agreement with an investor, pursuant to which the Company issued to the investor in a private placement (the “Private Placement”)
18,320,610
shares (the “Securities”) of the Company’s common stock, par value
$0.001
per share (the “Common Stock”), at a purchase price of
$3.0
million (the “Purchase Price”). The Company plans to use the proceeds from the Private Placement for general working capital purposes, including, without limitation, research and development, and other operating expenses.
 
During
November 2018,
the Company issued
18,500,000
shares of common stock to Dr. Goldberg in connection with the
August 2018
Agreement. Of those shares,
5,000,000
are being held in escrow pursuant to the Agreement. See Note
15.
 
During the years ended
December 31, 2018
and
2017,
we issued
1,118,760
and
710,353
shares of our common stock valued at
$317,000
and
$369,000,
respectively, to our employees as payments in lieu of cash for their
2017,
2016
and
2015
bonuses.
 
During the years ended
December 31, 2018
and
2017,
we issued
94,684
and
105,308
shares of our common stock as matching contributions to our
401
(k) Plan which were valued at
$36,000
and
$54,000,
respectively.
 
During the year ended
December 31, 2017,
we issued
16,406
shares of our common stock valued at
$10,500
to certain members of our Board of Directors as payment in lieu of cash for their retainer fees. We did
not
make any such stock payments to our directors during the year ended
December 31, 2018.
 
b.
Stock Warrants:
At
December 31, 2018,
there are
16.4
million warrants outstanding to purchase our common stock. The warrants are exercisable at prices ranging from
$0.01
to
$2.50
per share with a weighted average exercise price per share of
$1.15.
The warrants have remaining outstanding terms ranging from
0.7
to
16.6
years.
 
The following table summarizes information about our outstanding warrants at
December 31, 2018:
 
   
Exercise
Price
    
Number of
Warrants
  
Expiration Date
  
Series HH
    
2.49
      
301,205
  
June 2023
  
Series KK
    
1.918
      
391,032
  
March 2021
  
Series LL
    
0.01
      
4,365,280
  
August 2035
  
Series MM
    
2.50
      
150,000
  
September 2019
  
Series MM
    
2.50
      
150,000
  
October 2019
  
Series NN
    
1.50
      
11,000,000
  
March 2022
  
Total warrants
   $
1.15
 *    
16,357,517
  
 
  
 
*
Weighted average exercise price.
 
In addition, at
December 31, 2018,
there are
300
warrants outstanding to purchase MT Common Stock. The warrants are exercisable at
$2,000
per share.
 
In
January 2017,
Dr. Goldberg, then the Company’s President and CEO, exercised
5,411,850
of his Series LL warrants in exchange for
5,411,850
shares of our common stock, resulting in proceeds to the Company of
$54,119.
 
In
March 2017,
in connection with the Asset Sale, the Company granted to each of Cardinal Health
414
and UCSD, a
five
-year Series NN warrant to purchase up to
10
million shares and
1
million shares, respectively, of the Company’s common stock at an exercise price of
$1.50
per share, each of which warrant is subject to anti-dilution and other customary terms and conditions. The fair value of the Series NN warrants was calculated using the Black-Scholes model using our
five
-year historical weekly volatility of
77.0%
and a risk-free rate equal to the
five
-year treasury constant maturity rate of
2.0%.
The Series NN warrants granted to Cardinal Health
414
had an estimated fair value of
$3.3
million, which was recorded as a reduction of the gain on sale in the consolidated statement of operations for the year ended
December 31, 2017.
The Series NN warrants granted to UCSD had an estimated fair value of
$334,000,
which was recorded as an intangible asset related to the UCSD license in the consolidated balance sheet during the year ended
December 30, 2017.
 
 
c.
Common Stock Reserved:
As of
December 31, 2018,
we have reserved
19,515,686
shares of authorized common stock for the exercise of all outstanding stock options and warrants. An additional
5,000,000
shares of common stock have been reserved for issuance to Dr. Goldberg related to the
August 2018
Agreement. See Note
15.