Quarterly report pursuant to Section 13 or 15(d)

Warrants And Options

v3.19.2
Warrants And Options
6 Months Ended
Jun. 30, 2019
Warrants And Options  
Note 8 - Warrants and Options

a) Warrants

 

The following table summarizes the changes in warrants outstanding of the Company during the six-month period ended June 30, 2019:

 

 

Number of

 

Weighted Average

 

Warrants

 

Exercise Price ($)

 

Outstanding at December 31, 2018

 

6,107,617

 

2.88

 

Granted

 

-

 

-

 

Exercised

 

(4,145,280

)

 

2.81

 

Expired

 

(133,750

)

 

2.20

 

Outstanding at June 30, 2019

 

1,828,587

 

2.98

 

Exercisable at June 30, 2019

 

1,703,587

 

3.02

 

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. As a result of this amendment $196,957 was recorded in other expenses.

 

On March 8, 2019, Cotterford Company Limited partially exercised its warrant and purchased 1,724,138 shares of our common stock at $2.90 per share resulting in gross proceeds to the Company of $5.0 million.

 

On May 3, 2019, Cotterford Company Limited partially exercised its warrant and purchased 1,666,667 shares of our common stock at $3.00 per share resulting in gross proceeds of $5.0 million to the Company. As of June 30, 2019, the warrant remained exercisable through August 10, 2019 for the remaining balance of 1,609,195 shares of common stock at a price of $3.00 per share.

 

During 2019, warrants to purchase an aggregate of 4,145,280 shares of our common stock were exercised (including the exercises by Cotterford Company Limited referenced above) for gross cash proceeds to the Company of approximately of $11.7 million. Refer to Note 7 for the details of these exercises.

 

Below is a table summarizing the warrants issued and outstanding as of June 30, 2019, which have an aggregate weighted average remaining contractual life of 0.42 years.

 

 

Weighted

 

Average

 

Remaining

 

Proceeds to

 

Number

 

Number

 

Exercise

 

Contractual

 

Company if

 

Outstanding

 

Exercisable

 

Price ($)

 

Life (Years)

 

Exercised ($)

 

29,392

 

29,392

 

2.40

 

0.50

 

70,541

 

150,000

 

25,000

 

2.47

 

3.19

 

370,500

 

1,609,195

 

1,609,195

 

3.00

 

0.11

 

4,827,585

 

40,000

 

40,000

 

4.53

 

1.38

 

181,200

 

1,828,587

 

1,703,587

 

5,449,826

 

Warrant expense of $4,127 and $4,326 was recorded in the six months ended June 30, 2019 and June 30, 2018, respectively. Total remaining unrecognized compensation cost related to non-vested warrants is approximately $12,759 and is expected to be recognized over a period of 1.5 years. As of June 30, 2019, the total intrinsic value of warrants was $347,537.

 

b) Options

 

The following table summarizes the changes in options outstanding of the Company during the six-month period ended June 30, 2019:

 

 

Number of

 

Weighted Average

 

Options

 

Exercise Price ($)

 

Outstanding at December 31, 2018

 

3,498,801

 

4.00

 

Granted

 

730,000

 

3.25

 

Exercised

 

-

 

-

 

Expired/Cancelled

 

(34,167

)

 

3.34

 

Outstanding at June 30, 2019

 

4,194,634

 

3.88

 

Exercisable at June 30, 2019

 

3,469,634

 

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 June 30, 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 3.47 years. As of June 30, 2019, a total of 1,099,000 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

 

0.70

 

41,750

 

322,500

 

322,500

 

2.50

 

1.14

 

806,250

 

322,500

 

322,500

 

3.00

 

1.14

 

967,500

 

700,000

 

-

 

3.25

 

5.62

 

2,275,000

 

17,767

 

17,767

 

3.35

 

1.70

 

59,520

 

20,000

 

20,000

 

3.80

 

1.88

 

76,000

 

1,907,000

 

1,882,000

 

4.00

 

3.53

 

7,628,000

 

17,767

 

17,767

 

4.35

 

2.70

 

77,286

 

50,000

 

50,000

 

4.80

 

3.51

 

240,000

 

819,334

 

819,334

 

5.00

 

2.48

 

4,096,670

 

4,194,634

 

3,469,634

 

16,267,976

 

Stock option expense of $715,838 and $1,388,295 was recorded in the six months ended June 30, 2019 and June 30, 2018, respectively. Total remaining unrecognized compensation cost related to non-vested stock options is approximately $940,273 and is expected to be recognized over a period of 0.62 years. As of June 30, 2019, the total intrinsic value of stock options was $265,585.