Quarterly report pursuant to Section 13 or 15(d)

Note 10 - Stockholders' Deficit

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Note 10 - Stockholders' Deficit
6 Months Ended
Jun. 30, 2017
Equity [Abstract]  
Stockholders' Deficit

Common Stock

 

During the six months ended June 30, 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     370,162     $ 730     $ 1.97  
Total     370,162     $ 730     $ 1.97  

 

During the six months ended June 30, 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     179,140     $ 1,142          
Stock issued related to sale of subsidiary     200,000       640       3.20  
Cancellation of executive restricted stock     (333,000 )           12.50  
Total     46,140     $ 1,782          

 

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 June 30, 2017 and December 31, 2016 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, equal to approximately 7.5% of the Company’s fully diluted equity of its common stock to the parent company of Capstone Nutrition, the Company’s former product manufacturer, pursuant to a settlement agreement, which under certain circumstances is subject to the adjustment. 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 six months ended June 30, 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 June 30, 2017 and December 31, 2016.