Stockholders' Equity | 9 Months Ended |
Sep. 30, 2014 |
Equity [Abstract] | ' |
Stockholders' Equity | ' |
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NOTE 11. STOCKHOLDERS’ EQUITY |
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For the three and nine months ended September 30, 2014, the Company recorded expense of $221,000 and $412,000, respectively, related to restricted stock awards to the Company’s directors. For the three and nine months ended September 30, 2013, the Company recorded expense of $238,000 related to restricted stock awards and $0 and $20,000, respectively, related to stock options issued to the Company’s directors. |
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On June 12, 2014, the Board approved the formation of a Scientific Advisory Board (the “SAB”) and issued restricted stock awards to each of the five members of the SAB as part of their compensation package. For the three and nine months ended September 30, 2014, the Company recorded expense of $26,000 and $31,000, respectively, related to restricted stock awards to the Company’s SAB. |
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On January 2, 2013, Jeremy Cage was appointed Chief Executive Officer and the Company issued 500,000 shares of restricted stock to Mr. Cage as part of his compensation package. On March 22, 2013, the Company issued 192,308 shares of restricted stock to Brad Knight as part of his compensation package. For the three and nine months ended September 30, 2013, the Company recorded expense of $49,000 and $119,000, respectively, related to the restricted stock awards issued to Messrs. Cage and Knight. |
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Warrants for the Purchase of Common Stock |
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On January 13, 2011, the Company issued a warrant (the “THD Warrant”) to The Home Depot, Inc. (“The Home Depot”) pursuant to which The Home Depot may purchase up to 5.0 million shares of Common Stock at an exercise price of $2.00 per share, subject to certain vesting conditions. The THD Warrant was issued in connection with the Company’s Strategic Purchasing Agreement with The Home Depot, which it entered into on July 23, 2010 and pursuant to which it supplies The Home Depot with LED retrofit lamps and fixtures. The THD Warrant provided that 1.0 million shares of Common Stock would be eligible for vesting following each year ending December 31, 2011 through December 31, 2015, subject to The Home Depot having gross product orders from the Company, in dollar terms, that are at least 20% more than the gross product orders in the immediately preceding year. For the shares underlying the THD Warrant to be eligible for vesting following the years ending December 31, 2014 and 2015, The Home Depot would be required to extend the Strategic Purchasing Agreement for additional one-year periods beyond its initial term of three years. On August 12, 2013, the Company and The Home Depot entered into Amendment No. 1 to the Strategic Purchasing Agreement which, among other things, extended the term of the agreement for an additional three years. As of May 25, 2012, as a result of the Series H and I Preferred Offering, the exercise price of the THD Warrants adjusted, pursuant to the terms of such warrant, from $2.00 to $1.95 per share of Common Stock. The number of shares of Common Stock into which the THD Warrant was exercisable also adjusted, pursuant to the terms of the warrant, from 5,000,000 to 5,123,715 shares. As of August 28, 2014, as a result of Follow-On Series J Offering, the exercise price of the THD Warrant adjusted, pursuant to the terms of the warrant, from $1.95 to $1.37 per share of Common Stock. The number of shares of Common Stock into which the THD Warrant was exercisable also adjusted, pursuant to the terms of the warrant, from 5,123,715 to 7,321,347 shares. Each vested portion of the THD Warrant will expire on the third anniversary following the vesting of such portion. |
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As of September 30, 2014, the following warrants for the purchase of Common Stock were outstanding: |
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Warrant Holder | | Reason for Issuance | | Number of | | | Exercise | | | Expiration Date |
Common Shares | Price |
Investors in rights offering | | Series D Warrants | | | 825,634 | | | $ | 3.83 to | | | March 3, 2022 through April 19, |
$ | 3.85 | | 2022 |
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The Home Depot | | Purchasing agreement | | | 7,321,347 | | | $ | 1.37 | | | December 31, 2014 through |
2018 |
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RW LSG Management Holdings LLC | | Riverwood Warrants | | | 12,664,760 | | | | Variable | | | 25-May-22 |
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Certain other investors | | Riverwood Warrants | | | 5,427,751 | | | | Variable | | | 25-May-22 |
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Cleantech Europe II (A) LP | | September 2012 Warrants | | | 3,406,041 | | | $ | 0.72 | | | 25-Sep-22 |
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Cleantech Europe II (B) LP | | September 2012 Warrants | | | 593,959 | | | $ | 0.72 | | | 25-Sep-22 |
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Portman Limited | | September 2012 Warrants | | | 4,000,000 | | | $ | 0.72 | | | 25-Sep-22 |
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Aquillian Investments LLC | | Private Placement Series H | | | 830,508 | | | $ | 1.18 | | | 25-Sep-17 |
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Pegasus | | Pegasus Warrant | | | 10,000,000 | | | | Variable | | | 25-May-22 |
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Investors in Series J Follow-On Offering | | Series J Warrants | | | 120,508,750 | | | $ | 0.001 | | | January 3, 2019 through |
August 27, 2019 |
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Medley | | Medley Warrants | | | 10,000,000 | | | $ | 0.95 | | | 19-Feb-24 |
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Pegasus | | Pegasus Guaranty Warrants | | | 10,000,000 | | | $ | 0.5 | | | 19-Feb-24 |
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| | | | | 185,578,750 | | | | | | | |
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As of September 30, 2014, the warrants issued in connection with the Company’s previously redeemed Series D Convertible Preferred Stock, the warrants held by Aquillian Investments LLC, the Series J Warrants, the Medley Warrants and the Pegasus Guaranty Warrants and a portion of the THD Warrants were fully vested and exercisable. The September 2012 Warrants will become exercisable on October 9, 2015. Per the vesting terms discussed above, no shares issuable pursuant to the THD Warrant vested for the year ended December 31, 2013 and 1,494,269 shares issuable pursuant to the THD Warrant vested during both the years ended December 31, 2012 and 2011, for total warrants vested of 2,928,538, when the product purchases for these periods satisfied the prescribed vesting conditions, and 2,928,538 shares remain subject to vesting in accordance with similar product purchasing terms. Pursuant to the terms of the Riverwood Warrants and the Pegasus Warrant, these warrants were not exercisable as of September 30, 2014 because the aggregate fair market value of the Company’s outstanding shares of Common Stock (as determined in accordance with the terms of the Riverwood Warrants and the Pegasus Warrant) was less than the Company’s estimation of the required total equity value threshold of approximately $570 million (subject to adjustment in accordance with the terms of the Riverwood Warrants and the Pegasus Warrant). |
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The fair value of the THD Warrant is determined using the Monte Carlo valuation method and will be adjusted at each reporting date until they have been earned for each year and these adjustments will be recorded as a reduction in the related revenue (sales incentive) from The Home Depot. As of September 30, 2014 and 2013, the Company determined that a portion of the THD Warrant was expected to vest during the period based on purchases made by The Home Depot during the nine months ended September 30, 2014 and 2013 and, accordingly, recorded a reduction in revenue of $38,000 and a reduction in revenue of $100,000 for the three and nine months ended September 30, 2014, respectively, and reductions in revenue of $9,000 and $23,000 for the three and nine months ended September 30, 2013, respectively. The change in fair value of the previously vested portion of the THD Warrant was an increase of $2,000 for the three and nine months ended September 30, 2014, and was included in the (increase) decrease in fair value of liabilities under derivative contracts in the consolidated statement of operations and comprehensive loss. |