Annual report pursuant to Section 13 and 15(d)

Note 15 - Equity Instruments

v3.20.1
Note 15 - Equity Instruments
 12 Months Ended
Dec. 31, 2019
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
1
5
.
Equity Instruments
 
 
a.
Common Stock Issued:
  In
March 2019,
the Company entered into a Stock Purchase Agreement with an existing investor, John K. Scott, Jr. (the “Investor”), pursuant to which the Company was to issue to the Investor in a private placement (the “Private Placement”) up to
$3.0
million in shares of Common Stock.  The Private Placement was to occur in multiple tranches. The initial closing occurred on
March 22, 2019,
at which the Investor purchased
$50,000
worth of Common Stock at a price of
$2.80
per share, which was the closing price of a share of Common Stock reported on the NYSE American market for the business day immediately before the initial closing date. The remainder of the Common Stock was to be purchased by the Investor from time to time, on such date or dates to be determined by the Company and the Investor, which date was
not
to be later than
June 15, 2019. 
No
additional shares were purchased by the Investor prior to the
June 15, 2019
expiration of the Stock Purchase Agreement, however he did participate in the
June 2019
underwritten public offering
 
In
December 2019,
the Company executed a Stock Purchase Agreement with the investors named therein. Pursuant to the Stock Purchase Agreement, the investors agreed to purchase approximately
2.1
million shares of the Company’s Common Stock in a private placement for aggregate gross proceeds to the Company of approximately
$1.9
million. Of this amount, approximately
$1.1
million was received during
2019,
resulting in approximately
$812,000
of stock subscriptions receivable as of
December 31, 2019.
The remaining
$812,000
of proceeds were received and the related Common Stock was issued in
January 2020.
In accordance with current accounting guidance, the
$812,000
of stock subscriptions receivable was included in prepaid and other current assets in the consolidated balance sheet at
December 31, 2019.
 
In
June 2019,
the Company completed an underwritten public offering of
8,000,000
Shares of our Common Stock pursuant to an Underwriting Agreement between the Company and the Underwriter at a price to the public of
$0.75
per share. Of the
8,000,000
total Shares,
4,000,000
shares were placed with the Investor at a price of
$0.75
per share. Pursuant to the Underwriting Agreement, the Underwriter purchased the remaining
4,000,000
Shares from the Company at a price of
$0.69375
per share. Under the terms of the Underwriting Agreement, the Company granted the Underwriter an option (the “Underwriter Option”), exercisable for
30
days, to purchase up to an additional
1,200,000
shares of Common Stock at a price per share of
$0.69375.
The Underwriter Option was
not
exercised. The Company paid the Underwriter (a) a commission equal to
7.5%
of the gross proceeds from the Shares sold to the Underwriter, (b) a management fee equal to
1.0%
of the gross proceeds raised in the offering, (c)
$50,000
for non-accountable expenses, (d)
$100,000
for fees and expenses of legal counsel to the Underwriter and other out-of-pocket expenses, and (e)
$10,000
for clearing expenses. After underwriting discounts, commissions, fees and expenses paid to the Underwriter, the Company received net proceeds from the offering of
$5,555,000.
The Company paid an additional
$127,000
for legal and professional services related to this offering, which further reduced the net proceeds from the offering.
 
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, 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
925,000
shares of Common Stock to Dr. Goldberg in connection with the Goldberg Agreement. Of those shares,
250,000
are being held in escrow pursuant to the Goldberg Agreement. See Note
14.
 
During the year ended
December 31, 2018,
we issued
55,938
shares of our Common Stock valued at
$317,000
to our employees as payments in lieu of cash for their
2017
bonuses.
No
such stock bonus payments were made during the year ended
December 31, 2019.
 
During the years ended
December 31, 2019
and
2018,
we issued
8,128
and
4,734
shares of Common Stock as matching contributions to our
401
(k) Plan which were valued at
$20,000
and
$36,000,
respectively.
 
 
b.
Stock Warrants:
Pursuant to the Underwriting Agreement related to the
June 2019
public offering, the Company issued to the Underwriter Series OO Warrants to purchase
600,000
shares of Common Stock, representing
7.5%
of the aggregate number of shares of Common Stock sold in the offering. The Series OO Warrants are exercisable at any time and from time to time, in whole or in part, following the date of issuance and ending
five
years from the date of the execution of the Underwriting Agreement, at a price per share equal to
$0.9375
(
125%
of the offering price to the public per share). The Series OO Warrants had an estimated fair value of
$261,000
at the date of issuance, which was recorded in additional paid-in capital as a reduction of the gross proceeds raised in the public offering. The assumptions used to calculate fair value of the Series OO Warrants included volatility of
88.6%,
a risk-free rate of
1.8%
and expected dividends of
$0.
 
At
December 31, 2019,
there are
1.4
million warrants outstanding to purchase Common Stock. The warrants are exercisable at prices ranging from
$0.20
to
$49.80
per share with a weighted average exercise price per share of
$13.26.
The warrants have remaining outstanding terms ranging from
1.2
to
15.6
years.
 
The following table summarizes information about our outstanding warrants at
December 31, 2019.
 
   
Exercise
Price
    
Number of
Warrants
  
Expiration Date
Series HH
   $
49.80
      
15,060
  
6/25/2023
Series KK
    
38.36
      
19,550
  
3/4/2021
Series LL
    
0.20
      
218,264
  
8/20/2035
Series NN
    
30.00
      
550,000
  
3/3/2022
Series OO
    
0.9375
      
600,000
  
6/13/2024
Total warrants
   $
13.26
   *    
1,402,874
  
 
 
*
Weighted average exercise price.
 
In addition, at
December 31, 2019,
there are
300
warrants outstanding to purchase MT Common Stock. The warrants are exercisable at
$2,000
per share and expire in
March 2020.
 
 
c.
Common Stock Reserved:
As of
December 31, 2019,
we have reserved
1,641,344
shares of authorized Common Stock for the exercise of all outstanding stock options and warrants, and
902,162
shares for the issuance of Common Stock pursuant to the
December 2019
Stock Purchase Agreement. An additional
250,000
shares of Common Stock have been reserved for issuance to Dr. Goldberg related to the Goldberg Agreement. See Note
14.