Quarterly report pursuant to Section 13 or 15(d)

Note 9 - Stockholders' Deficit

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Note 9 - Stockholders' Deficit
3 Months Ended
Mar. 31, 2017
Equity [Abstract]  
Stockholders' Deficit

Note 9. Stockholders’ Deficit

 

Common Stock

 

For the three months ended March 31, 2017, the Company had the following transactions related to its common stock including restricted stock awards (in thousands, except share and per share data):

Transaction Type   Quantity (Shares)  

Valuation

($)

 

Range of

Value per Share

Stock issued to employees, executives and directors     350,000     $ 686     $ 1.96  
Total     350,000     $ 686     $ 1.96  

 

For the three months ended March 31, 2016, the Company issued common stock including restricted stock awards, as follows (in thousands, except share and per share data):

Transaction Type  

Quantity

(Shares)

 

Valuation

($)

  Range of Value per Share
Stock issued to employees, executives and directors     145,245     $ 289       $       1.89-2.21  
Total     145,245     $ 289       $       1.89-2.21  

 

The fair value of all stock issuances above is based upon the quoted closing trading price on the date of issuance.

 

Common stock outstanding as of December 31, 2016 and 2015 includes shares legally outstanding even if subject to future vesting.

 

Warrants

 

In November 2016, the Company issued a warrant to purchase 1,289,378 shares of its common stock to the parent company of Capstone Nutrition, the Company’s former product manufacturer, pursuant to a settlement agreement. The exercise price of this warrant was $1.83 per share, with a contractual term of four years. The Company has valued this warrant by utilizing the Black Scholes model at approximately $1.8 million with the following assumptions: contractual life of four years, risk free interest rate of 1.27%, dividend yield of 0%, and expected volatility of 118.4%.

 

In July 2014, the Company issued a warrant to purchase 100,000 shares of its common stock related to an endorsement agreement. The exercise price of this warrant was $11.90 per share, with a contractual term of five years. This warrant fully vested during 2016. The Company used the Black-Scholes model to determine the estimated fair value of the warrants, with the following assumptions: contractual life of five years, risk free interest rate of 1.7%, dividend yield of 0%, and expected volatility of 55%.

 

Treasury Stock

 

During the three months ended March 31, 2017 and the year ended December 31, 2016, the Company did not repurchase any shares of its common stock and held 875,621 shares in treasury as of March 31, 2017 and December 31, 2016.