Quarterly report pursuant to Section 13 or 15(d)

Warrants And Options

v3.19.1
Warrants And Options
3 Months Ended
Mar. 31, 2019
Notes to Financial Statements  
Note 8 - Warrants and Options

a)   Warrants

 

The following table summarizes the changes in warrants outstanding of the Company during the three-month period ended March 31, 2019:

 

          Weighted Average  
   

Number of

Warrants

   

Exercise

Price ($)

 
Outstanding at December 31, 2018     6,107,617       2.88  
Granted     -       -  
Exercised     (2,478,613 )     2.68  
Expired     (133,750 )     2.20  
Outstanding at March 31, 2019     3,495,254       2.99  
                 
Exercisable at March 31, 2019     3,370,254       3.01  

  

Effective March 5, 2019, the Company entered into an amendment to an outstanding warrant to purchase up to an aggregate of 5.0 million shares of our common stock, originally issued to Cotterford Company Limited, a significant stockholder, in connection with an equity financing completed on or about August 10, 2018.  The amendment temporarily reduced the exercise price of such warrant from $3.00 per share to $2.90 per share through the close of business on March 8, 2019.  On March 8, 2019, Cotterford Company Limited partially exercised the warrant for 1,724,138 shares of our common stock at $2.90 per share resulting in gross proceeds of $5.0 million.  The warrant remains exercisable through August 10, 2019 for the remaining balance of 3,275,862 shares of common stock at a price of $3.00 per share. As a result of this amendment, $196,957 was recorded in other expenses.

 

During the quarter ended March 31, 2019, 2,478,613 warrants were exercised (including the exercise by Cotterford Company Limited referenced above) for gross cash proceeds to the Company of $6.66 million. Refer to Note 7 for the details of these exercises.

 

Below is a table summarizing the warrants issued and outstanding as of March 31, 2019, which have an aggregate weighted average remaining contractual life of 0.50 years.

  

                  Weighted        
                  Average        
                  Remaining     Proceeds to  
Number     Number     Exercise     Contractual     Company if  
Outstanding     Exercisable     Price ($)     Life (Years)     Exercised ($)  
  29,392       29,392       2.40       0.75       70,541  
  150,000       25,000       2.47       3.43       370,500  
  3,275,862       3,275,862       3.00       0.36       9,827,586  
  40,000       40,000       4.53       1.63       181,200  
  3,495,254       3,370,254                       10,449,827  

  

Warrant expense of $2,127 and $2,199 was recorded in the three-months ended March 31, 2019 and March 31, 2018, respectively. Total remaining unrecognized compensation cost related to unvested warrants is approximately $14,885 and is expected to be recognized over a period of 1.8 years. As of March 31, 2019, the total intrinsic value of warrants was $960,949.

 

b)   Options

 

The following table summarizes the changes in options outstanding of the Company during the three-month period ended March 31, 2019:

 

          Weighted Average  
   

Number of

Options

   

Exercise

Price ($)

 
Outstanding at December 31, 2018     3,498,801       4.00  
Granted     730,000       3.25  
Exercised     -       -  
Expired/Cancelled     -       -  
Outstanding at March 31, 2019     4,228,801       3.87  
                 
Exercisable at March 31, 2019     3,473,801       4.00  

  

Effective February 11, 2019, the Company granted stock options to purchase 730,000 shares of common stock to various Company personnel (including directors, executives, members of management and employees) for services to the Company. These options vest on February 11, 2020 and expire 5 years after the vesting date, with an exercise price of $3.25 per share. The Company has calculated the estimated fair market value of these options at $1,569,816, using the Black-Scholes model and the following assumptions: term 6 years, stock price $3.16, exercise price $3.25, 77.86% volatility, 2.52% risk free rate, and no forfeiture rate.

 

Below is a table summarizing the options issued and outstanding as of March 31, 2019, all of which were issued pursuant to the 2011 Equity Incentive Plan (for option issuances prior to 2016) or the 2015 Stock Incentive Plan (for option issuances commencing in 2016) and which have an aggregate weighted average remaining contractual life of 3.73 years. As of March 31, 2019, a total of 69,000 shares of common stock remained available for future issuance under the 2015 Stock Incentive Plan.

 

                  Weighted        
                  Average        
                  Remaining     Proceeds to  
Number     Number     Exercise     Contractual     Company if  
Outstanding     Exercisable     Price ($)     Life (Years)     Exercised ($)  
  17,766       17,766       2.35       0.95       41,750  
  322,500       322,500       2.50       1.39       806,250  
  322,500       322,500       3.00       1.39       967,500  
  730,000       -       3.25       5.87       2,372,500  
  17,767       17,767       3.35       1.95       59,519  
  20,000       20,000       3.80       2.13       76,000  
  1,911,167       1,886,167       4.00       3.17       7,644,669  
  17,767       17,767       4.35       2.95       77,286  
  50,000       50,000       4.80       3.76       240,000  
  819,334       819,334       5.00       2.73       4,096,670  
                                     
  4,228,801       3,473,801                       16,382,144  

  

Stock option expense of $338,331 and $895,226 was recorded in the three months ended March 31, 2019 and March 31, 2018, respectively. Total remaining unrecognized compensation cost related to non-vested stock options is approximately $1,381,839 and is expected to be recognized over a period of 0.87 years. As of March 31, 2019, the total intrinsic value of stock options was $338,490.