Stockholders' Equity | 7. Equity (Deficit) Stock-based compensation expense is based on the estimated grant date fair value of the portion of stock-based payment awards that are ultimately expected to vest during the period. The grant date fair value of stock-based awards to employees and directors is calculated using the Black-Scholes-Merton valuation model. Forfeitures of stock-based payment awards are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The estimated average forfeiture rate for the three months ended June 30, 2016 and 2015, was approximately 11.89% and 7.54%, respectively, based on historical data. Valuation and Expense Information: The weighted-average fair value of stock-based compensation is based on the Black-Scholes-Merton valuation model. Forfeitures are estimated and it is assumed no dividends will be declared. The estimated fair value of stock-based compensation awards to employees is amortized using the accrual method over the vesting period of the options. The fair value calculations are based on the following assumptions: Six Months Ended Six Months Ended Risk free interest rate 0.04% - 3.19% 0.04% - 3.73% Expected life (years) 2.82 - 7.00 3.26 - 6.88 Expected volatility 112.75% - 198.90% 93.63% - 198.38% Expected dividends None None There were no stock options granted, and no stock options exercised during the three and six months ended June 30, 2016. The Company granted 29 stock options during the three and six months ended June 30, 2015 at a weighted average exercise price of $28.13 per share. There were no stock options exercised during the three and six months ended June 30, 2015. The following table summarizes the allocation of stock-based compensation expense related to stock option grants for the three and six months ended June 30: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Research and development $ 15 $ 47 $ 34 $ 113 Sales and marketing $ 2 $ 34 $ 15 $ 86 General and administrative $ 19 $ 65 $ 43 $ 145 Director options $ 6 $ 12 $ 14 $ 27 Total stock-based compensation expense $ 42 $ 158 $ 106 $ 371 A summary of option activity under the Company's plans for the six months ended June 30, 2016 and 2015 is as follows: Options 2016 2015 Shares Weighted Price Per Share Weighted Life (Years) Aggregate Value Shares Weighted Price Per Share Weighted Life (Years) Aggregate Value Outstanding at January 1, 82 $ 45.35 $ - 57 $ 56.13 $ - Granted - $ - $ - 29 $ 28.13 $ - Exercised - $ - $ - - $ - $ - Forfeited or expired (8) $ 42.16 $ - (1) $ 37.50 $ - Outstanding at June 30 74 $ 45.71 3.65 $ - 85 $ 46.75 4.59 $ - Vested and expected to vest at June 30 72 $ 46.22 3.10 $ - 83 $ 37.50 3.24 $ - Exercisable at June 30 58 $ 51.10 3.10 $ - 52 $ 56.00 3.56 $ - The following table summarizes significant ranges of outstanding and exercisable options as of June 30, 2016: Range of Exercise Prices Options Outstanding Options Exercisable Number Weighted Weighted Number Weighted $25.00 - $625.00 74 3.65 $ 45.71 58 $ 51.10 A summary of the status of the Company's non-vested shares as of June 30, 2016 is as follows: Non-vested Shares Shares Weighted Non-vested at January 1, 2016 25 $28.61 Forfeited (3) $28.80 Vested (6) $46.22 Non-vested at June 30, 2016 16 $26.42 As of June 30, 2016, there was a total of $107 of unrecognized compensation expense related to non-vested stock-based compensation arrangements granted under the plans. The unrecognized compensation expense is expected to be realized over a weighted average period of 1.7 years. Sale of Common Stock and Conversion of Preferred Stock, Short-term Debt and Deferred Compensation On May 19, 2016, the Company closed an underwritten public offering of 690 shares of common stock at a public offering price of $1.74 per share. In addition, the Company sold 345 warrants, at a public offering price of $0.01 per warrant, to purchase shares of Common Stock. The warrants expire on May 18, 2021 and have an exercise price of $2.175 per share. The Company raised gross cash proceeds of $1,204 before deducting underwriting discounts and commissions and other offering expenses of $780. As a result of the consummation of the offering, each series of the Company's outstanding preferred stock, including accrued and unpaid dividends through May 19, 2016, were converted into shares of common stock. As a result of the Amendments to the Certificates of Designations to all classes of Preferred Stock and pursuant to the terms thereof, the conversion price of the Company's Preferred Stock was reduced. The following table summarizes the change in conversion price, the number of shares outstanding as of the conversion date and the number of Common Stock issued upon conversion of the Preferred Stock. Class of Preferred Stock Old Adjusted Shares Common Series A-1 $ 175.00 $ 19.44 976 50 Series B $ 54.13 $ 12.96 14,042 1,083 Series C $ 28.13 $ 9.71 5,702 587 Series D-1 $ 28.13 $ 7.24 8,386 1,159 Series D-2 $ 62.50 $ 8.58 6,625 773 Total 35,731 3,652 The Company intends to use the net proceeds from the offering for working capital and general corporate purposes. In conjunction with the sale of Common Stock, $1,188 of Short-term debt including accrued interest of $120 was converted into 683 shares of the Company's Common Stock. The Company issued 854 warrants with the conversion of the Short-term debt. The Company ascribed a relative fair value of $586 to the warrants using the Black-Scholes-Merton valuation model, which was charged to additional paid-in capital during the quarter ended June 30, 2016. In addition to the conversion of the Short-term debt, approximately $498 of deferred compensation including accrued interest of $59 was converted into 286 shares of the Company's Common Stock. The Company issued 352 warrants with the conversion of the deferred compensation. The Company ascribed a relative fair value of $244 to the warrants using the Black-Scholes-Merton valuation model, which was charged to additional paid- in capital during the quarter ended June 30, 2016. The conversion price of the Short-term debt and deferred compensation was $1.74 per share. The warrants expire on May 18, 2021 and have an exercise price of $2.175. Information with respect to in-kind dividends issued on the Company's Preferred stock for the three and six-month periods ended June 30, 2016 and June 30, 2015 is as follows: Dividends Beneficial Conversion Feature Related to dividends Three Months Ended June 30, Six Months Ended June 30, Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 2016 2015 2016 2015 Series A-1 $ 10 $ 17 $ 29 $ 35 $ - $ - $ 3 $ - Series B 182 313 519 615 - - 73 - Series C 74 127 211 250 - - 39 13 Series D-1 108 179 309 324 - - 78 16 Series D-2 85 149 245 292 - - 52 - Total $ 459 $ 785 $ 1,313 $ 1,516 $ - $ - $ 245 $ 29 Warrants A summary of the warrant activity for the six months ended June 30 is as follows: June 30, 2016 June 30, 2015 Shares Weighted Shares Weighted Outstanding at beginning of period 205 $ 35.51 171 $ 36.13 Issued 1,551 $ 2.18 22 $ 28.13 Expired - $ - (13) $ 62.50 Outstanding at end of period 1,756 $ 5.27 180 $ 34.63 Exercisable at end of period 1,756 $ 5.27 180 $ 34.63 A summary of the status of the warrants outstanding and exercisable as of June 30, 2016 is as follows: Number of Warrants Weighted Average Weighted Average 14 0.01 $0.30 105 0.03 $2.06 32 0.01 $0.51 54 0.06 $0.48 1,551 4.38 $1.92 1,756 4.48 $1.85 |