Annual report pursuant to Section 13 and 15(d)

Warrants

v3.6.0.2
Warrants
12 Months Ended
Dec. 31, 2016
Warrants and Rights Note Disclosure [Abstract]  
Warrants
Warrants
Prior to 2015, we issued certain warrants containing an exercise price adjustment (identified as Financing and Series B Pref. Stock under the heading “derivative” in the table below). For these warrants, in the event new equity instruments were issued at a price lower than the exercise price of the warrant, the exercise price would be adjusted to the new equity instruments issued (price adjustment feature). These warrants were initially recorded as a warrant liability, with any subsequent change in their fair value recognized in earnings until the warrants were exercised, amended or expired. At December 31, 2015, 60,200 of these warrants were outstanding. At December 31, 2016, all of these warrants had either been exercised or expired. During 2016, we issued warrants containing a contingent net cash settlement feature (identified as 2016 Offerings under the heading “derivative” in the table below). These warrants are recorded as a warrant liability, and all subsequent changes in their fair value are recognized in earnings until they are exercised, amended or expired.
A significant number of our warrants are held by Mr. Pappajohn, the Chairman of our Board of Directors and stockholder. See Note 19 for additional details on these warrants.

On April 1, 2015, 19,138 warrants expired unexercised.

On November 12, 2015, the Company issued 3,000,000 warrants in conjunction with the 2015 Offering and an additional 450,000 warrants pursuant to the underwriter’s partial exercise of the over-allotment option. The warrants have an exercise price of $5.00 per share and will expire November 12, 2020. See Note 11. We have evaluated the terms and conditions of warrants issued with the 2015 Offering and determined the warrants should be included in equity and are not required to be reported as a liability.

On November 12, 2015, the exercise price of 75,215 warrants were adjusted from $10.00 per common share to $4.00 per common share due to 2015 Offering and the exercise price adjustment feature in certain warrants.

On November 18, 2015, 14,665 warrants expired unexercised and the Company received $1,400 from a warrant holder who exercised warrants to purchase 350 shares of common stock at $4.00 per share.

On December 9, 2015, 120,000 warrants held by Mr. Pappajohn expired unexercised.

On February 21, 2016 and March 23, 2016, 200 and 70,000 warrants expired unexercised, respectively.

On May 25, 2016, we issued 1,357,301 warrants to purchase shares of our common stock as part of our May Offering. Subject to certain ownership limitations, the warrants will be initially exercisable commencing six months from the issuance date at an exercise price equal to $2.25 per share of common stock. The warrants are exercisable for five years from the initial exercise date. These warrants contain a contingent net cash settlement feature and are part of the 2016 Offerings derivative warrants in the table below.

On June 30, 2016, 86,533 warrants held by Mr. Pappajohn expired unexercised.

On September 14, 2016, we issued 1,512,500 warrants to purchase shares of our common stock as part of our September Offering. Subject to certain ownership limitations, the warrants will be initially exercisable commencing six months from the issuance date at an exercise price equal to $2.25 per share of common stock. The warrants are exercisable for five years from the initial exercise date. These warrants also contain a contingent net cash settlement feature and are part of the 2016 Offerings derivative warrants in the table below.

On December 1, 2016 and December 21, 2016, 37,000 and 75,294 warrants held by Mr. Pappajohn expired unexercised, respectively.


The following table summarizes the warrant activity for the years ending December 31, 2016 and 2015 (in thousands, except exercise price): 

Issued With / For
 
Exercise
Price
 
 
Warrants
Outstanding
January 1,
2015
 
2015
Warrants
Issued
 
2015 Offering Adjustments (B)
 
2015
Warrants
Expired
 
Warrants
Outstanding
December 31,
2015
 
2016
Warrants
Issued
 
2016
Warrants
Expired
 
Warrants
Outstanding
December 31,
2016
Non-Derivative Warrants:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financing
 
$
10.00

 
 
243

 

 

 

 
243

 

 

 
243

Financing
 
15.00

 
 
436

 

 

 

 
436

 

 
(75
)
 
361

Debt Guarantee
 
15.00

 
 
353

 

 

 
(120
)
 
233

 

 
(124
)
 
109

Consulting
 
10.00

 
 
29

 

 

 
(19
)
 
10

 

 
(10
)
 

2015 Offering
 
5.00

 
 

 
3,450

 

 

 
3,450

 

 

 
3,450

 
 
$
6.42

D
 
1,061

 
3,450

 

 
(139
)
 
4,372

 

 
(209
)
 
4,163

Derivative Warrants:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financing
 
4.00

A
 

 

 
60

 

 
60

 

 
(60
)
 

Financing
 
10.00

A
 
60

 

 
(60
)
 

 

 

 

 

Series B Pref. Stock
 
4.00

A
 

 

 
15

 
(15
)
 

 

 

 

Series B Pref. Stock
 
10.00

A
 
15

 

 
(15
)
 

 

 

 

 

2016 Offerings
 
2.25

C
 

 

 

 

 

 
2,870

 

 
2,870

 
 
$
2.25

D
 
75

 

 

 
(15
)
 
60

 
2,870

 
(60
)
 
2,870

 
 
$
4.72

D
 
1,136

 
3,450

 

 
(154
)
 
4,432

 
2,870

 
(269
)
 
7,033

________________________
A
These warrants are subject to fair value accounting and contain an exercise price adjustment feature. See Note 14.
B
On November 12, 2015 the Company completed the 2015 Offering and the exercise price of certain derivative warrants were adjusted to $4.00.
C
These warrants are subject to fair value accounting and contain a contingent net cash settlement feature. See Note 14.
D
Weighted average exercise prices are as of December 31, 2016.