11.
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Stockholders Equity (continued).
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The Rights trade automatically with the common stock and will not be exercisable until a
person or group has become an acquiring person by acquiring 17.5% or more of the Companys outstanding common stock, or a person or group commences, or publicly announces a tender offer that will result in such a person or group
owning 17.5% or more of the Companys outstanding common stock. Upon announcement that any person or group has become an acquiring person, each Right will entitle all rightholders (other than the acquiring person) to purchase, for the exercise
price of $7.80, a number of shares of the Companys common stock having a market value equal to twice the exercise price. Rightholders would also be entitled to purchase common stock of the acquiring person having a value of twice the exercise
price if, after a person had become an acquiring person, the Company were to enter into certain mergers or other transactions. If any person becomes an acquiring person, the Board of Directors may, at its option and subject to certain limitations,
exchange one share of common stock for each Right.
The Rights have certain anti-takeover effects, in that they would cause substantial
dilution to a person or group that attempts to acquire a significant interest in the Company on terms not approved by the Board of Directors. In the event that the Board of Directors determines a transaction to be in the best interests of the
Company and its stockholders, the Board of Directors may redeem the Rights for $0.001 per share at any time prior to a person or group becoming an acquiring person.
On September 19, 2016, the Board of Directors unanimously approved, and on the same date the Company entered into Amendment No. 1 to
the Stockholders Rights Plan (the Amendment). Under the terms of the Amendment, the outside expiration date of the rights plan has been extended from September 20, 2016 to September 20, 2019. Additionally, as part of the
Amendment, the Board adopted a Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of the Company to increase the number of shares of Series A Junior Participating Preferred Stock of the Company
available for issuance under the Rights Plan from 500,000 shares to 1.5 million shares.
12.
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Stock Compensation Plans.
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For the years ended December 31, 2018 and 2017, the Company recorded stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
Research and development
|
|
$
|
1,079,230
|
|
|
$
|
785,899
|
|
General and administrative
|
|
|
2,471,414
|
|
|
|
1,622,062
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation
|
|
$
|
3,550,644
|
|
|
$
|
2,407,961
|
|
|
|
|
|
|
|
|
|
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The Company may issue stock options, restricted stock, stock appreciation rights and restricted stock units
(collectively, the Awards) to employees, directors, and consultants of the Company under the 2014 and 2018 Stock Incentive Plans (the 2014 Plan and the 2018 Plan or collectively, the Plans). At December 31, 2018, no shares remain
available for future issuance under the 2014 Plan. Under the 2018 Plan, 7,500,000 shares were reserved for issuance and as of December 31, 2018, 3,620,603 shares remain available for future issuance.
Stock Options
The
Company has granted stock options to employees, officers, directors, and consultants generally at exercise prices equal to the market price of the common stock at grant date. Option awards generally vest over a period of 1 to 5 years of continuous
service and have contractual terms from 5 to 7 years. Certain awards provide for accelerated vesting if there is a change in control. The Company issues new shares as shares are required to be delivered upon exercise of outstanding stock options.
During the years ended December 31, 2018 and 2017, options to purchase 186,665 and 780,000 shares of the Companys common stock
were exercised with gross proceeds to the Company of $297,563 and $368,185, respectively. Further, during the year ended December 31, 2018, no options to purchase shares of the Companys common stock were exercised on a
cashless basis. During the year ended December 31, 2017, options to purchase 100,000 shares of the Companys common stock were exercised on a cashless basis, resulting in the issuance of an aggregate of 84,280
shares of the Companys common stock, respectively.
During the years ended December 31, 2018 and 2017 the Company recorded
non-cash
stock-based compensation expense related to stock options totaling $3,535,647 and $2,342,625, respectively.
During the years ended December 31, 2018 and 2017, the Company granted seven-year options to purchase an aggregate of 5,822,500 and
1,550,000 shares, respectively, of the Companys common stock to certain of the Companys officers, employees, directors, and consultants.
F-20