|6 Months Ended|
Jun. 30, 2019
The Company is authorized to issue 105,000,000 shares of which 5,000,000 shares of preferred stock are authorized and 100,000,000 shares of common stock are authorized.
The Company is authorized to issue up to 5,000,000 shares of preferred stock. Its certificate of incorporation authorizes the board to issue these shares in one or more series, to determine the designations and the powers, preferences and relative, participating, optional or other special rights and the qualifications, limitations and restrictions thereof, including the dividend rights, conversion or exchange rights, voting rights (including the number of votes per share), redemption rights and terms, liquidation preferences, sinking fund provisions and the number of shares constituting the series. As of June 30, 2019, there was no preferred stock issued.
Lincoln Park Transaction
On October 4, 2018, the Company entered into a purchase agreement (the "Purchase Agreement") and a registration rights agreement (the "Registration Rights Agreement") with Lincoln Park Capital Fund, LLC ("Lincoln Park"). Pursuant to the terms of the Purchase Agreement, Lincoln Park has agreed to purchase from us up to $20.0 million of our common stock (subject to certain limitations) from time to time during the term of the Purchase Agreement. Pursuant to the terms of the Registration Rights Agreement, we filed with the SEC a registration statement to register for resale under the Securities Act the shares that have been or may be issued to Lincoln Park under the Purchase Agreement. Pursuant to the terms of the Purchase Agreement, at the time we signed the Purchase Agreement and the Registration Rights Agreement, we issued 243,013 shares of common stock to Lincoln Park as consideration for its commitment to purchase shares of our common stock under the Purchase Agreement and may issue an additional 121,507 commitment shares pro-rata when and if Lincoln Park purchases (at the Company's discretion) the $20.0 million aggregate commitment. The commitment shares were valued at $337,788, recorded as an addition to equity for the issuance of common stock and treated as a reduction to equity as a cost of capital to be raised under the Purchase Agreement. During the three months ended December 31, 2018, the Company issued 1,399,153 shares to Lincoln Park which included 10,918 commitment shares for $1.8 million. During the first quarter of 2019, the Company issued 605,367 shares, which included 5,367 commitment shares for $0.9 million. No shares were issued to Lincoln Park during the second quarter of 2019.
At Market Issuance Sales Agreements ("ATM")
During September 2017, the Company entered into an At Market Issuance Sales Agreement (the “ATM Agreement”) with Roth Capital Partners, LLC ("Roth") and National Securities Corporation ("National") (collectively, the “Agents”). Pursuant to the terms of the ATM Agreement, the Company was permitted to sell from time to time through the Agents shares of the Company’s common stock with an aggregate sales price of up to $13 million. The Company agreed to pay a commission to the Agents of 3.0% of the gross proceeds of the sale of the shares sold under the Agreement and to reimburse the Agents for certain expenses. The Company also provided the Agents with customary indemnification rights. During the six months ended June 30, 2019, the Company did not sell any shares under this ATM Agreement. In June 2019, the Company canceled the ATM Agreement.
Subsequent to canceling the ATM Agreement with Roth and National, the Company entered into an At Market Issuance Sales Agreement (the “Opco Agreement”) with Oppenheimer & Co. Inc. (the “Agent”) on July 23, 2019. Pursuant to the terms of the Opco Agreement, the Company may sell from time to time through the Agent shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), with an aggregate sales price of up to $15 million (the “Shares”). Any sales of Shares pursuant to the Opco Agreement will be made under the Company’s effective “shelf” registration statement (the “Registration Statement”) on Form S-3 (File No. 333-219434), which became effective on August 21, 2017 and the related prospectus supplement and the accompanying prospectus, as filed with the Securities and Exchange Commission (the “SEC”). Under the Opco Agreement, the Company may sell Shares through the Agent by any method that is deemed an “at the market offering” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). Sales of the Shares, if any, may be made at market prices prevailing at the time of sale, subject to such other terms as may be agreed upon at the time of sale, including a minimum sales price that may be stipulated by the Company’s Board of Directors or a duly authorized committee thereof. The Company or the Agent, under certain circumstances and upon notice to the other, may suspend the offering of the Shares under the Agreement. The offering of the Shares pursuant to the Agreement will terminate upon the sale of Shares in an aggregate offering amount equal to $15 million, or sooner if either the Company or the Agent terminate the Agreement pursuant to its terms. The Company will pay a commission to the Agent of 3.0% of the gross proceeds
of the sale of the Shares sold under the Agreement and reimburse the Agent for certain expenses. The Company has also provided the Agent with customary indemnification rights. The Company has not sold any shares under the Opco Agreement.
Adoption of 2015 Stock Plan
In 2015, the Board of Directors of the Company approved the Company’s 2015 Stock Plan, which was amended in 2017 and 2018. The expiration date of the plan is December 5, 2025 and the total number of underlying shares of the Company’s common stock available for grant to employees, directors and consultants under the plan is currently 4,500,000 shares. The awards under the 2015 Stock Plan can be in the form of stock options, stock awards, stock unit awards or stock appreciation rights.
The following is a summary of option activities for the six months ended June 30, 2019:
During March 2019, 25,000 stock options were exercised at $0.20 per share with the Company receiving $5,000 in gross proceeds.
The fair value of the option grants has been estimated, with the following weighted-average assumptions:
Stock-based compensation for the three and six months ended June 30, 2019 and 2018, are as follows (in thousands):
There were 45,000 options granted during the six months ended June 30, 2019. Options granted during 2019 have an aggregated fair value of $0.04 million that was calculated using the Black-Scholes option-pricing model. As of June 30, 2019, total compensation cost not yet recognized was $2.6 million and the weighted average period over which this amount is expected to be recognized is 2.28 years.
The fair value of each stock option is estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the above paragraph and table. The expected term of the options was computed using the "plain vanilla" method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin 107 because the
Company does not have sufficient data regarding employee exercise behavior to estimate the expected term. The volatility was determined by referring to the average historical volatility of a peer group of public companies combined with the Company's due to the lack of sufficient historical data of its stock price. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
In 2017, the Company entered into a consulting agreement for its investor relations operations. The consulting agreement initially covered a period of months from the commencement date of July 29, 2017, was extended in April 2018 until March 31, 2019. Pursuant to the original consulting agreement, in exchange for the consulting services, the Company issued two warrants (collectively, the “Warrants”) to purchase 100,000 and 50,000 shares of common stock at exercise prices of $2.41 and $3.00 per share. Each of the Warrants vested over a 12-month period in equal monthly installments starting July 29, 2017, provided that the consultant was providing services to the Company pursuant to the consulting agreement on each vesting date. The Warrants became initially exercisable on August 8, 2017 and expire years from the initial exercise date. The Company recorded stock compensation expense for the non-employee consulting agreement of $0.00 million and $0.04 million for the three months ended June 30, 2019 and 2018, respectively, and $0.002 million and $0.1 million during the six months ended June 30, 2019 and 2018, respectively. In connection with the first extension of the consulting agreement, the Company issued the consultant a 3-year warrant to purchase 100,000 shares of common stock at an exercise price of $3.00 per share vesting in four quarterly installments. In addition, the Company paid $20,000 to the consultant per quarter pursuant to the first amendment to the consulting agreement.
On July 8, 2019, the Company amended the existing consulting agreement for additional cash payments, with a right to cease cash payments by issuing the consultant a fully vested -year warrant to purchase 150,000 shares of Company common stock, subject to NASDAQ listing of additional shares approval. The consultant is an accredited investor. The Company believes the issuance would be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act regarding transactions not involving a public offering. On August 8, 2019, the Company elected to issue such warrant with an exercise price of $1.64.
$9 million Registered Direct Offering
In February 2018, the Company entered into a Securities Purchase Agreement with certain institutional investors for the sale of 4,290,000 shares of MBI's common stock, at a purchase price of $2.10 per share. Concurrently with the sale of the common stock, pursuant to the Purchase Agreement, the Company also sold warrants to purchase 2,145,000 shares of common stock. The Company sold the common stock and warrants for aggregate gross proceeds of approximately $9.0 million. The net proceeds from the transactions was approximately $8.2 million after deducting certain fees due to the placement agent and transaction expenses. Subject to certain beneficial ownership limitations, the warrants became exercisable on the -month anniversary of the issuance date at an exercise price equal to $2.80 per share of common stock, subject to adjustments as provided under the terms of the warrants. The warrants are exercisable for years from the initial exercise date. The closing of the sales of these securities under the Purchase Agreement occurred on February 21, 2018.
$2.3 million Registered Direct Offering
In June 2018, the Company entered into a definitive agreement with institutional investors for a registered direct offering of securities with gross proceeds of approximately $2.3 million. In connection with the offering, the Company issued 1,092,636 registered shares of common stock at a purchase price of $2.105 per share. Concurrently in a private placement, for each share of common stock purchased by an investor, such investor received from the Company an unregistered warrant to purchase 0.65 of a share of common stock. The warrants have an exercise price of $2.02 per share, became exercisable six months from the date of issuance, and will expire five years from the initial exercise date. Roth Capital Partners LLC served as sole placement agent for the offering.
$5.25 million Registered Direct Offering
In March 2019, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Oppenheimer & Co. Inc. (the "Underwriter") relating to an underwritten offering (the "Offering") of 5,250,000 units (each a "Unit"), each unit consisting of (i) one share of the Company's common stock, and (ii) 0.5 of a warrant to purchase one share of common stock (each a "Warrant"). The public offering price of the Units was $1.00 per Unit, and the Underwriter agreed to purchase the Units from the Company pursuant to the Underwriting Agreement at a price of $0.93 per Unit. The Warrants included in the Units are immediately exercisable at a price of $1.10 per share, subject to adjustments in certain circumstances,
and will expire five years from the date of issuance. The net proceeds from the transaction was approximately $4.7 million after deducting the underwriting discount and estimated offering expenses payable by the Company.
$15 million Registered Direct Offering
In April 2019, the Company entered into subscription agreements (each a "Subscription Agreement") with certain institutional investors (the "Investors") for the sale by the Company of 9,375,000 units (each a "Unit"), each Unit consisting of (i) one share of the Company's common stock, and (ii) 0.5 of a warrant to purchase one share of common stock (each a "Warrant"). The public offering price of the Units was $1.60 per Unit. The Warrants included in the Units will be immediately exercisable at a price of $1.75 per share and will expire five years from the date of issuance. The net proceeds from the transaction was approximately $14.0 million after deducting the placement agent fees and estimated offering expenses payable by the Company.
The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef